A PROJECT STUDY REPORT ON FUNDEMENTAL ANALYSIS OF

BANING SECTOR

IN
MOTHILAL OSWAL SECURITIES LTD
Submitted In
partial fulfilment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

OF
MAHATHMA GANDHI UNIVERSITY
Submitted by
SARANYA K S
(Reg No: 52180)
Under the Guidance of
Mrs. ANN JOSE
(Assistant professor)

DEPARTMENT OF MANAGEMENT STUDIES

MANGALAM COLLEGE OF ENGINEERING
ETTUMANOOR, KOTTAYAM
2013-2015

CHAPTER 1
INTRODUCTION

INTRODUCTION
Analysis is the examination and evaluation of the relevant information to select the best
course of action from among various alternatives. The methods used to analyze securities
and make investment decisions fall into two very broad categories: fundamental analysis
and technical analysis. Fundamental analysis involves analyzing the characteristics of a
company in order to estimate its value. Technical analysis takes a completely different
approach; it doesn't care one bit about the "value" of a company or a commodity.
Technicians (sometimes called chartists) are only interested in the price movement in the
market.
Technical analysis is a method of evaluating securities by analyzing the statistics
generated by market activity, such as past prices and volume. Technical analysts do not
attempt to measure a security's intrinsic value, but instead use charts and other tools to
identify patterns that can suggest future activity.
Many analysts and investors focus on a single number--net income (or earnings)--to
evaluate performance. When investors attempt to forecast the market value of a firm,
they frequently rely on earnings. Many institutional investors, analysts and regulators
believe earnings are not as relevant as they once were. Due to nonrecurring events,
disparities in measuring risk and management's ability to disguise fundamental earnings
problems, other measures beyond net income can assist in predicting future firm
earnings.

STATEMENT OF THE PROBLEM

Fundemental analysis of banking sector with respect mothilal oswal securities ltd

SIGNIFICANCE OF THE STUDY

Fundamental Analysis involves examining the economic, financial and other qualitative
and quantitative factors related to a security in order to determine its intrinsic value. It
attempts to study everything that can affect the security's value, including
macroeconomic factors (like the overall economy and industry conditions) and
individually specific factors (like the financial condition and management of companies).
Fundamental analysis, which is also known as quantitative analysis, involves delving
into a companys financial statements (such as profit and loss account and balance sheet)

in order to study various financial indicators (such as revenues, earnings, liabilities,

expenses and assets). Such analysis is usually carried out by analysts, brokers and savvy
investors.

OBJECTIVES OF THE STUDY

Primary Objective
To do Fundamental Analysis of five major companies in Banking Sector.
Secondary Objective
To compute the intrinsic values.
To determine the market price of the share is overpriced or under priced on the basis
of intrinsic values.
To analyze economy by using some economic indicators like GDP, inflation rate etc
for the selected period of 5 years.
To analyze the industry for the selected period of 5 years.

SCOPE OF THE STUDY

The scope of the study is limited to only five companies in the Banking sector viz. State Bank
of India, ICICI, Bank of Baroda, Axis Bank and YES Bank.

RESEARCH METHODOLOGY
A research design is the arrangement of conditions for collection and analyse data in a
manner that aims to combine relevance to the research purpose with economy in the
procedure. It provides the source and type of information, approach used for gathering
and analyzing data, time and cost relevant for the research study.
METHOD OF DATA COLLECTION
The data collected are mainly secondary data; collected from secondary sources such as
the internet, websites of selected companies, company balance sheets, annual reports,
press release, etc

PERIOD OF STUDY
The study was conducted for a period of 2 month from 1 May 2015 to 30 June 2015

CHAPTER SCHEME
1st Chapter Contains Introduction, Statement of Problem, Significant of The Study,
Objective of The Study, Scope of The Study, Hypothesis, and Methodology, Period of
The Study, Chapter Scheme, Assumption and Limitation of The Study.
II nd Chapter deals With Review of Literature, Industrial Profile (World Scenario,
Indian Scenario and State Scenario), Company Profile, Theoretical Background,
Recent Studies in the Topic, Review of Research Methodology
III rd Chapter Contains Research Methodology, Research Design, Study Approach
,Technique of Data Collection , Sampling Techniques ,Statistical Tools of Data
Analysis
IVth Chapter Includes Data Analysis and Interpretation ,Objective Wise Data
Analysis ,Hypothesis Testing
Vth Chapter Contains Summery , Observations , Suggestions ,Recommendations,
Scope For Further Study ,Conclusion , Bibliography

LIMITATIONS OF THE STUDY

The intrinsic value of the company is determined by the profit, which the
company earns over a period of time and it is directly related to both internal and
external factors, which are out of ones control.
Two months study is not enough for fundamental analysis.

CHAPTER 2
REVIEW OF LITERATURE

INDUSTRY PROFILE

FINANCIAL SERVICES

The term "financial services" became more prevalent in the United States partly as a result of
the Gramm-Leach-Bliley Act of the late 1990s, which enabled different types of companies
operating in the U.S. financial services industry at that time to merge. Financial services are
the economic services provided by the finance industry, which encompasses a broad range of
organizations that manage money, including credit unions, banks, credit card companies,
insurance companies, accountancy companies, consumer finance companies, stock
brokerages, investment funds and some government sponsored enterprises.
The industry comprises complex networks of organizations, which primarily deal with
management of money and create conditions for investors and corporations to flourish in the
market. The growth of other sectors is closely dependent on this industry as it is a prime
source of liquidity and thereby ensures the overall prosperity and economic stability. This
multi-trillion dollar services industry comprises companies varying a great deal in size and
their offerings as well. The industry grouping is widely branched out to include companies
providing varied services, preventing a simple categorization of this industry.
The financial services industry has witnessed its greatest challenges since the Great
Depression, due to the burstingof the housing bubble and the resulting credit crunch. Within a
period of weeks, venerable institutions have been brought to their knees by dysfunctional
credit markets and the punishing stock market. The U.S. and European governments, as well
as Japan, have pumped liquidity into the system and taken on direct capital investments in
these financial behemoths, in an effort to stabilize credit markets and prevent a global
economic meltdown.

FINANCIAL INSTITUTIONS
In financial economics, a financial institution is an institution that provides
financial services for its clients or members. Probably the greatest important financial service
provided by financial institutions is acting as financial intermediaries. Most financial
institutions are regulated by the government. Broadly speaking, there are three major types of
financial institutions:

Depositary Institutions : Deposit-taking institutions that accept and manage deposits

and make loans, including banks, building societies, credit unions, trust companies,
and mortgage loan companies

Contractual Institutions : Insurance companies and pension funds; and

Investment Institutions: Investment Banks, underwriters, brokerage firms.

FINANCIAL INTERMEDIARY
A financial intermediary is a financial institution that connects surplus and deficit
agents. The classic example of a financial intermediary is a bank that consolidates deposits
and uses the funds to transform them into loans. Through the process of financial
intermediation, certain assets or liabilities are transformed into different assets or liabilities.
As such, financial intermediaries channel funds from people who have extra money or
surplus savings (savers) to those who do not have enough money to carry out a desired
activity (borrowers).

A financial intermediary is typically an institution that facilitates the channeling of

funds between lenders and borrowers indirectly. That is, savers (lenders) give funds to an
intermediary institution (such as a bank), and that institution gives those funds to spenders
(borrowers). This may be in the form of loans or mortgages. Alternatively, they may lend the
money directly via the financial markets, which is known as financial disintermediation

FINANCIAL MARKETS

A financial market is a market in which people and entities can trade financial securities,
commodities, and other fungible items of value at low transaction costs and at prices that
reflect supply and demand. Securities include stocks and bonds, and commodities include
precious metals or agricultural goods. There are both general markets (where many
commodities are traded) and specialized markets (where only one commodity is traded).
Markets work by placing many interested buyers and sellers, including households, firms,
and government agencies, in one "place", thus making it easier for them to find each other.
An economy which relies primarily on interactions between buyers and sellers to allocate
resources is known as a market economy in contras t either to a command economy or to a
non-market economy such as a gift economy. Financial market is basically segmented into
two parts:a) Money market
b) Capital market

MONEY MARKET
The Money market refers to the market where borrowers and lenders exchange short-term
funds to solve their liquidity needs. Money market instruments are generally financial claims
that have low default risk, maturities under one year and high marketability.
Money market is a market for debt securities that pay off in the short term
usually less than one year, for example the market for 90-days treasury bills. This market
encompasses the trading and issuance of short term non equity debt instruments including
treasury bills, commercial papers, bankers acceptance, certificates of deposits, etc.
CAPITAL MARKET
The Capital market is a market for financial investments that are direct or indirect claims to
capital. It is wider than the Securities Market and embraces all forms of lending and
borrowing, whether or not evidenced by the creation of a negotiable financial instrument. The
Capital Market comprises the complex of institutions and mechanisms through which
intermediate term funds and long-term funds are pooled and made available to business,
government and individuals. The Capital Market also encompasses the process by which
securities already outstanding are transferred.

a. Primary Market :Primary market is the new issue market of shares, preference shares and debentures of
non-government public limited companies and issue of public sector bonds.

Types of issues in Primary market

 Initial public offer (IPO) (in case of an unlisted company),

Follow-on public offer (FPO),
Rights offer such that securities are offered to existing shareholders,
Preferential issue/ bonus issue/ QIB placement
Composite issue, that is, mixture of a rights and public offer, or offer for sale
(offer of securities by existing shareholders to the public for subscription).
b. Secondary Market:This refers to old or already issued securities. It is composed of industrial security
market or stock exchange market and gilt-edged market.

MAJOR STOCK EXCHANGES IN INDIA

1. Bombay Stock Exchange (BSE) of India

The oldest stock market in Asia, BSE stands for Bombay Stock Exchange and was
initially known as "The Native Share & Stock Brokers Association." Incorporated in the
1875, BSE became the first exchange in India to be certified by the administration. It attained
a permanent authorization from the Indian government in 1956 under Securities Contracts
(Regulation) Act, 1956.Over the year, the exchange company has played an essential part in
the
expansion of Indian investment market. At present the association is functioning as
corporatized body integrated under the stipulations of the Companies Act, 1956.

SENSEX:The sensitive index has long been known as the barometer of the daily temperature
of Indian bourses. In 1978-79 stock market contained only private sector companies and they
were mostly geared to commodity production.

SENSEX is a "Market Capitalization-Weighted" index of 30 stocks representing a sample of

large, well-established and financially sound companies. SENSEX is considered to be the
pulse of the Indian stock markets. SENSEX is widely used to describe the mood in the Indian
Stock markets.

2 National Stock Exchange (NSE) of India

Integrated in November 1992, the National Stock Exchange of India (NSE) was initially a
tariff forfeiting association. In 1993, the exchange was certified under Securities Contracts
(Regulation) Act, 1956 and in June 1994 it started its business functioning in the Wholesale
Debt Market (WDM). The Equities division of NSE began its operations in 1994 while in
2000 the corporation incorporated its Derivatives division.

NIFTY:The Nifty is relatively a new comer in the Indian market. S&P CNX Nifty is a 50
stock index accounting for 23 sectors of the economy. S&P CNX Nifty is owned and
managed by India Index Services and Products Ltd. (IISL), which is a joint venture between
NSE and

CRISIL. IISL is a specialized company focused upon the index as a core product. IISL have a
consulting and licensing agreement with Standard & Poor's (S&P), who are world leaders in
index services.

3.Multi Commodity Exchange of India Limited (MCX)

The Multi Commodity Exchange of India Limited (MCX), Indias first listed exchange, is a
state-of-the-art, commodity futures exchange that facilitates online trading, and clearing and
settlement of commodity futures transactions, thereby providing a platform for risk
management. MCX offers trading in varied commodity futures contracts across segments
including bullion, ferrous and non-ferrous metals, energy, agri-based and agricultural
commodities.
The Exchange focuses on providing commodity value chain participants with neutral,
secure and transparent trade mechanisms, and formulating quality parameters and trade
regulations, in conformity with the regulatory framework. The Exchange has an extensive
national reach, with over 2100 members, operations through more than 400,000 trading
terminals (including CTCL), spanning over 1900 cities and towns across India. MCX is
Indias leading commodity futures exchange with a market share of about 86 per cent in
terms of the value of commodity futures contracts traded in 9M FY2013-14.
MCXs ability to use and apply technology efficiently is a key factor in the development of
its business. The exchanges technology framework is designed to provide high availability
for all critical components, which guarantees continuous availability of trading facilities.

The robust technology infrastructure of the exchange, along with its with rapid
customization and deployment capabilities enables it to operate efficiently with fast order
routing, immediate trade execution, trade reporting, real-time risk management, market
surveillance and market data dissemination

4. OTC Exchange of India (OTCEI)

The OTC Exchange of India (OTCEI), also known as the Over-the-Counter Exchange of
India, is based in Mumbai, Maharashtra. It is India's first exchange for small
companies, as well as the first screen-based nationwide stock exchange in India. OTCEI
was set up to accesshigh-technology enterprising promoters in raising finance for new
product development in a cost-effective manner and to provide a transparent and efficient
trading system to investors.

The OTC Exchange of India was founded in 1990 under the Companies Act 1956 and was
recognized by the Securities Contracts Regulation Act, 1956 as a stock exchange.

OTCEI is promoted by the Unit Trust of India,the Industrial Credit and Investment
Corporation of India, the Industrial Development Bank of India, the Industrial Finance
Corporation of India, and other institutions, and is a recognized stock exchange under the
SCR

INDIAN FINANCIAL SECTOR

The far-reaching changes in the Indian economy since liberalization have had a deep impact
on the Indian financial services sector. Financial sector reforms that were initiated by the
government since the early 90s have been to meet the challenges of a complex financial
architecture. This has ensured that the new emerging face of the Indian financial sector will
culminate in a strong, transparent and resilient system.
India has a diversified financial sector, which is undergoing rapid expansion. The sector
comprises commercial banks, insurance companies, non-banking financial companies, co-

operatives, pension funds, mutual funds and other smaller financial entities. The financial
sector in India is predominantly a banking sector with commercial banks accounting for more
than 60 per cent of the total assets held by the financial system. India's services sector has
always served the countrys economy well, accounting for about 57 per cent of the gross
domestic product (GDP). In this regard, the financial services sector has been an important
contributor.
The Government of India has introduced reforms to liberalize, regulate and enhance this
industry. At present, India is undoubtedly one of the world's most vibrant capital markets.
Challenges remain, but the future of the sector looks good. The advent of technology has also
aided the growth of the industry. About 75 per cent of the insurance policies sold by 2020
would, in one way or another, be influenced by digital channels during the pre-purchase,
purchase or renewal stages, as per a report by Boston Consulting Group (BCG) and Google
India.

INDIAN CAPITAL MARKET VS GLOBAL CAPITAL MARKET

The Indian stock exchanges hold a place of prominence not only in Asia but also at the global
stage. The Bombay Stock Exchange (BSE) is one of the oldest exchanges across the world,
while the National Stock Exchange (NSE) is among the best in terms of sophistication and
advancement of technology. The Indian stock market scene really picked up after the opening
up of the economy in the early nineties. The whole of nineties were used
to experiment and fine tune an efficient and effective system. The badla system was stopped
to control unnecessary volatility while the derivatives segment started as late as 2000.

The corporate governance rules were gradually put in place which initiated the process of
bringing the listed companies at a uniform level. On the global scale, the economic
environment started taking paradigm shift with the dot com bubble burst, 9/11, and soaring
oil prices. The slowdown in the US economy and interest rate tightening made the equation
more complex.
However after 2000 riding on a robust growth and a maturing economy and relaxed
regulations, outside investors- institutional and others got more scope to operate. This
opening up of the system led to increased integration with heightened cross-border flow of
capital, with India emerging as an investment hot spot resulting in our stock exchanges
being impacted by global cues like never before.
The study pertains to comparative analysis of the Indian Stock Market with respect to various
international counterparts. Exchanges are now crossing national boundaries to extend their
service areas and this has led to cross-border integration. Also, exchanges have begun to

offer cross-border trading to facilitate overseas investment options for investors. This not
only increased the appeal of the exchange for investors but also attracts more volume.
Exchanges regularly solicit companies outside their home territory and encourage them to list
on theirexchange and global competition has put pressure on corporations to seek capital
outside their home country.
The Indian stock market is the world third largest stock market on the basis of investor base
and has a collective pool of about 20 million investors. There are over 9,000 companies listed
on the stock exchanges of the country. The Bombay Stock Exchange, established in 1875, is
the oldest in Asia. National Stock Exchange, a more recent establishment which came into

existence in 1992, is the largest and most advanced stock market in India is also the third
biggest stock exchange in Asia in terms of transactions. It is among the 5 biggest stock
exchanges in the world in terms of transactions volume.

CORPORATE ACTIONS
Any event that brings material change to a company and affects its stakeholders can
be termed as corporate actions. Some of the important corporate actions are given below.
i.

Splits (sub-division) / Reverse splits (consolidation)

A pro-rata distribution of shares (split) or a pro-rata consolidation (reverse split) of shares

held by existing shareholders is a corporate action. There will be no change in companys
market capitalisation. Shares and share prices are adjusted according to terms.

ii.

Scrip issues (Capitalisation or Bonus Issue)

A scrip issue (also called a capitalisation or a bonus issue) is the issue of new shares to
existing shareholders at no charge, pro rata to existing holdings.
iii.

Capital Repayments

These are categorized as a return of capital to shareholders. Special Dividends are generally
treated as capital repayments
iv.

Rights Issues / Entitlement Offers

These are an entitlement or right to buy additional shares directly from the company in
proportion to their existing holdings

v.

Takeovers & Mergers

If an existing constituent is acquired for cash, stock, or by a non-quoted company in its own
or another country, then the existing constituent is deleted on the effective date of the
acquisition.
vi.

Spin-offs

If a constituent company is split and forms two or more companies by issuing new equity
toexisting shareholders, then the resulting companies may be eligible to continue
asconstituents in the same FTSE Indices as their predecessor company (refer to Index Series
ground rules for specific conditions).
vii.

Dividends

Declared dividends are used to calculate the FTSE Standard Total Return Indices. All

dividends are applied on the ex dividend date.

A series of net of tax Total Return Indices are also calculated based on the maximum
withholding tax rates applicable to dividends received by institutional investors who are not
resident in the same country as the remitting company and who do not benefit from double
taxation treaties.
viii.

Deletions

A stock will be deleted as a constituent if it is delisted from its stock exchange, becomes
bankrupt, files for bankruptcy protection, is insolvent or is liquidated, or where evidence of a
change in circumstances makes it ineligible for index inclusion.

COMPANY PROFILE
Motilal Oswal Securities (MOSL) was founded in 1987 as a small sub-broking unit,
with just two people running the show. Focus on customer-first-attitude, ethical and
transparent business practices, respect for professionalism, research-based value investing
and implementation of cutting-edge technology has enabled us to blossom into an almost
1600 member team.
Today we are a well diversified financial services firm offering a range of financial
products and services such as Wealth Management , Broking & Distribution , Commodity
Broking, Portfolio Management Services , Institutional Equities, Private Equity , Investment
Banking Services and Principal Strategies.

Company have a diversified client base that includes retail customers (including High
Net worth Individuals), mutual funds , foreign institutional investors, financial institutions
and corporate clients. We are headquartered in Mumbai and as of December 31st, 2012, had a
network spread over 555 cities and towns comprising 1,563 Business Locations operated by
our Business Partners and us. As at December 31st, 2011, we had 7,38,156 registered
customers
Motilal Oswal Financial Services (MOFSL) was founded in 1987 by Mr. Motilal
Oswal and Mr. Ramdeo Agrawal as a sub broking firm. In just three years Motilal Oswal
became members of on The Bombay Stock Exchange (BSE). It was incorporated in year
1995.
Motilal Oswal offers a wide range of financial services such as wealth management,
broking and distribution, commodity broking, portfolio management services, institutional
equities, private equity and investment banking services. It offers wealth management
services under the name Purple.
MOFSL has subsidiaries enveloping the different functions in the names of Motilal
Oswal Securities (MOSL), Motilal Oswal Investment Advisors (MOIA), Motilal Oswal
Commodities Broker (MOCBL) and Motilal Oswal Venture Capital Advisors (MOVC).

Motilal Oswal Financial Services is a known brand among retail and institutional
investors in India, with a presence in over 1533 business locations across over 487 cities.
AWARDS

Motilal Oswal Securities bagged the Best Performing Equity Broker (National)
Award at CNBC TV18 Financial Advisor Awards 2013 held in Mumbai.
(13/09/2013)

Motilal Oswal Securities Ltd. was awarded amongst the top 20 innovators in BFSI
space for Leveraging on Technology in enhancing customer experience
(8/11/2012)

Best Equity Broker Award at Bloomberg UTV

(04/09/2012)
Motilal Oswal Securities bagged the Best Equity Broker Award at Bloomberg UTV
Financial Leadership Award 2012 held in Mumbai on April 7, 2012.

India PR & Corporate Communication Awards 2012

(03/22/2012)
Motilal Oswal Financial Services was awarded the Best Use of Public Relations in the
Financial Services Sector Award at the India PR & Corporate Communication Awards
2012 held in New Delhi on March 22, 2012.

CNBC TV18 Financial Advisor Awards - 2012

(03/13/2012)
Motilal Oswal Securities Ltd. was adjudged as the 'Best Performing National Financial
Advisor Equity Broker' at the CNBC TV18 Financial Advisor Awards 2012.

Awards for Retail Excellence 2012

(02/14/2012)
Motilal Oswal Financial Services won the RETAILER OF THE YEAR (Banking &
Financial Services) award at the Awards for Retail Excellence 2012 organised by Asia
Retail Congress on Feb 14, 2012.

BSE IPF-D&B Equity Broking Awards 2011

(10/11/2011)
Motilal Oswal Securities was awarded Best Equity Broking House at BSE IPF-D&B
Equity Broking Awards 2011 on October 10, 2011.

Best Capital Markets & Related NBFC Award

(09/13/2011)
Motilal Oswal Financial Services Ltd. was honoured with Best Capital Markets &
Related NBFC Award at the CNBC TV18 India Best Banks and Financial Institutions
Awards, 2011, presented by MCX, held in Mumbai

At the 2nd ASIAs BEST EMPLOYER BRAND AWARDS

(07/23/2011)
At the second ASIAs BEST EMPLOYER BRAND AWARDS held in Singapore on
22nd July, 2011, Motilal Oswal Financial Services bagged awards in two categories:
Award for Excellence in HR through Technology & Award for Managing Health at
Work.

ET Now Starmine Analyst Awards 2010-2011

(05/13/2011)
Motilal Oswal Securities won 4 awards at the ET Now Starmine Analyst Awards
2010-2011. This puts MOSL amongst the Top 3 Award winning Brokers at the ET
NOW Starmine Analyst Awards 2010-2011

CRISIL Mutual Fund Award 2011

(05/13/2011)
Motilal Oswal Mutual Funds MOSt Shares M50 bagged the Most Innovative Fund of
the Year Award at CNBC TV18-CRISIL Mutual Fund Award 2011 held in Mumbai

CNBC TV18 Financial Advisor Awards 2010

(12/09/2010)
Motilal Oswal Securities Ltd. was adjudged as the 'Best Performing Equity Broker
(National)' at the CNBC TV18 Financial Advisor Awards 2010

Motilal Oswal Securities wins QIMPRO best project award

(10/04/2010)
Motilal Oswal Securities Limited bagged the QualTech Prize for Improvement - 2010
in the Services Category on September 24, 2010.

Asia-Pacific Cross Border Deal of the Year in 2010

(09/24/2010)
Motilal Oswal Investment Banking wins the Asia-Pacific Cross Border Deal of the
Year at the ASIA-PACIFIC M&A ATLAS AWARDS in 2010

ET NOW Starmine Award 2009

(07/27/2010)
Motilal Oswal Securities bagged the No.1 Broker Award in the ET Now StarMine
Analyst Awards 2009

'Rated No.1 Best recommendations Mid & Small Caps' and won awards in 3 out of 4
categories
(02/01/2009)
MOSL was 'Rated No.1 Best recommendations Mid & Small Caps' and won awards
in 3 out of 4 categories at the Starmine India Broker Rankings 2009 from Thomson
Reuters

MOSL awarded the prestigous Nasscom - CNBC TV 18 IT User Award - 2008

(11/28/2008)
MOSL awarded the prestigous Nasscom - CNBC TV 18 IT User Award 2008

Awarded 'The Best Franchisor in Financial Services'

(11/26/2008)
MOSL awarded 'The Best Franchisor in Financial Services' by Franchisee World
Magazine 2008 for the second consecutive year

MOSL appears in Limca Book of Records

03/16/2008
MOSL creates one of India's largest Equity Dealing & Advisory rooms, spread over 26,000
sq ft in Malad, Mumbai

Motilal Oswal was percieved as the most Research driven stock trading player
(12/09/2007)
Motilal Oswal was percieved as the most Research driven stock trading player Starcom Mediavest Survey

Best Franchisor Award - 2007

(11/26/2007)
MOSL awarded 'The Best Franchisor in Financial Services' by Franchisee World
Magazine 2007

'Outstanding Commoditiy Broking House - 2007' Award

(09/01/2007)
Motilal Oswal Commodities Broker Pvt Ltd (MOCBPL) bagged Globoil India's
prestigious 'Outstanding Commoditiy Broking House - 2007' Award

MOFSL featured as a case study in Harvard Business School

(03/14/2007)
Motilal Oswal Financial Services Ltd. featured as a case study in Harvard Business
School

Avaya Global ranked MOSL as the second best company

(01/30/2007)
Avaya Global ranked MOSL as the second best company in the Financial Sector for
customer responsiveness

OUTLOOK
Motilal Oswal has launched Motilal Oswal - Exclusive, an innovative franchising model.
This new franchising model emphasizes on customer profiling, customer education and
superior customer experience.
Board of directors
1 Motilal Oswal

Chairman

2 Motilal Oswal

Managing Director

3 Navin Agarwal

Director

4 Motilal Oswal

Chief Financial Officer

5 Motilal Oswal

Chief Executive Officer

6 Raamdeo Agrawal

Joint Managing Director

7 Balkumar Agarwal

Independent Director

8 Ramesh Agarwal

Independent Director

9 Madhav Bhatkuly

Independent Director

OVERVIEW
Motilal Oswal Financial Services Limited (MOFSL) is a diversified financial services
company offering a range of financial products and services, such as Broking and
Distribution, Institutional Equities, Wealth Management, Investment Banking, Private Equity
and Asset Management. The Companys subsidiaries include Motilal Oswal Securities Ltd
(MOSL), which is engaged in stock broking, wealth management and distribution of financial
products; Motilal Oswal Capital Markets Pvt Ltd, which is engaged in stock broking; Motilal
Oswal Commodities Broker Pvt Ltd, which is engaged in commodities broking; Motilal
Oswal Private Equity Advisors Pvt Ltd, which is engage in private equity management and
advisory, Motilal Oswal Investment Advisors Pvt Ltd, which is engaged in investment
banking, and Antop Trader Pvt Ltd, which is engaged in lease rental.
FINANCIALS
In 2006, the Company placed 9.48% of its equity with two leading private equity investors
based out of the US New Vernon Private Equity Limited and Bessemer Venture
Partners. The company got listed on BSE and NSE on September 9, 2007. The issue which
was priced at Rs.825 per share (face value Rs.5 per share) got a overwhelming response and
was subscribed 27.18 times in turbulent market conditions. The issue gave a return of 21% on
the date of listing. As of end of financial year 2008, the group networth was Rs.7 bn and
market capitalization as of March 31, 2008 was Rs.19 bnCredit rating agency Crisil has
assigned the highest rating of P1+ to the Companys short-term debt program.Shareholding
Pattern at on 30th June, 2011.
As of June 30th, 2011; the total shareholding of the Promoter and Promoter Group stood at
69.16%. The shareholding of institutions stood at 12.07% and non-institutions at 18.77%.

SERVICES OFFERED:

Online trading: Mothilal Oswal has a large network of branches with online
terminals of NSE andBSE in the Capital market and Derivative segments. The clients
are assured of prompt order execution through dedicated phones and expert dealers at
our offices.

Internet Trading: Mothilal oswaloffers Internet trading through this site. You can
trade through the internet from the comforts of your office or home, anywhere in the
world. The dedicated IT systems ensure service up time and speed, making Internet
broking through mothilal hassle-free. Using the 'easiest' facility provided by NDSL,
our clients can transfer the shares sold by them online without delivery instruction
slips. Additionally, digitally signed contract notes can be sent to clients through Email.

Depository services: Mothilal oswal is a member of the National Securities

Depository Limited (NSDL), offer depository services with minimum Annual
Maintenance Charges and transaction charges. Account holders can view their
holding position through the Internet. We also offer the easiest facility provided by
NDSL (electronic access to securities information and execution of secured
transaction) through which clients are given delivery instructions via internet.

Derivative trading: Mothilal offers trading in the futures and options segment of the
National Stock Exchange (NSE). Through the present derivative trading an investor
can take a short-term view on the market for up to a three months perspective by

paying a small margin on the futures segment and a small premium in the options
segment. In the case of options, if the trade goes in the opposite direction the
maximum loss will be limited to the premium paid.

Portfolio Management Services: Mothilal oswal is a SEBI-approved portfolio

manager offering discretionary and nondiscretionary schemes to its clients. Hedge
Equities portfolio management team keeps track of the markets on a daily basis and
is exposed to a lot of information and analytic tools which an investor would not
normally have access to. Other technicalities pertaining to shares like dividends,
rights, bonus, buy-back, Mergers and Acquisitions are also taken care of by us.
Maximize your returns by opting for our PMS scheme.

Commodity Trading: You can trade in commodity futures like gold, silver, crude
oil, rubber etc. and take advantage of the extended trading hours (10 am to 11 pm) in
commodities trading.

Mutual Funds, Bonds etc: We also offer Mutual Funds and Bonds. You can select
from a wide range of Mutual Funds and Bonds available in the markets today.

Currency Trading: Currency derivatives can be described as contracts between the

sellers and buyers,whose values are to be derived from the underlying assets, the
currency amounts. These are basically risk management tools in force and money
markets used for hedging risks and act as 29 insurance against unforeseen and
unpredictable currency and interest rate movements. Any individual or corporate

expecting to receive or pay certain amounts in foreign currencies at future date can
use these products to opt for a fixed rate - at which the currencies can be exchanged
now itself. An upfront premium is payable for buying a derivative. Currency Futures
will bring in more transparency and efficiency in price discovery, eliminate
counterparty credit risk, provide access to all types of market participants, offer
standardized products and provide transparent trading platform.

Competitors

DEPARTMENT PROFILE
Departmentalization creates flexibility, adaptability and in action within the firm by the
efficient and effective grouping of job into meaningful work units to coordinate
numerous jobs for the expeditors accomplishment of the organizational objectives. There
are mainly five departments in Mothilal
I.

OPERATION DEPARTMENTOperation department is considered as a vital

department. Operation department is headed by the chief operations officer and
its business is stock broking commodity futures, PMS, research and depository.

II.

TECHNOLOGY DEPARTMENT

Technology department is headed by the chief technology officer, the technological

assistance will be given by the technological department.
III.

DISTRIBUTION DEPARTMENT

Distribution department is headed by the chief distribution officer and its main business
areas are sales of mutual funds, insurance, bonds, IPO's and fixed deposits etc.
IV.

FINANCE DEPARTMENT

Finance department is headed by chief financial officer and under this department they
have various departments like finance and accounts, risk and investment and NBFC
operations.
V.

HUMAN RESOURCE DEPARTMENT

Human resource department is headed by the chief of the human resources and their
functions are training and development of employee, recruitment, payroll, provident
fund, ESI etc. There are certain small departments. They are legal, complaints,
administration, company secretariats and corporate communication etc.
THEORATICAL BACKGROND OF THE STUDY
An investor who would like to be rational and scientific in his investment activity has to
evaluate a lot of information about the past performance and the expected future
performance of companies, industries and the economy as a whole before taking the
investment decision. Such evaluation or analysis is called fundamental analysis.
Fundamental analysis is the analysis of critical factors that affect the value of a stock.
The intrinsic value of an equity share depends on a multitude of factors.
Each share is assumed to have an economic worth based on its present and future earning
capacity. This is called its intrinsic value or fundamental value. The purpose of
fundamental analysis is to evaluate the present and future earning capacity of a share
based on the economy, industry and company fundamentals and thereby assess the
intrinsic value of the share.
If market price < intrinsic value buy
If market price > intrinsic value sell

Fundamental analyst believes that market price a reflection of its intrinsic value.
Fundamental analysis is a combination of economy, industry and company analysis to
obtain a stocks current fair value and predict its future. This kind of fundamental
analysis is also known as top-down approach because the analysis starts from an
analysis of the economy, moves to industry and narrows down to the company. This is
also called EIC (Economy, Industry, and Company) analysis.
ECONOMIC ANALYSIS
Economic analysis is a study of the general economic factors that go into an evaluation
of a securitys value. The stock market is an integral part of the economy. An analysis of
the macroeconomic environment is essential to understand the behaviour of stock prices.
The commonly analysed macroeconomic factors are as follows:

Gross Domestic Product (GDP)

Savings and investment

Inflation

Interest rates

Budget and fiscal deficit

Tax structure

Balance of payment

Foreign direct investment

Investment by Foreign Institutional Investors (FIIs)

International economic conditions

Monsoon and agriculture

Infrastructural facilities

3.2.1.1 Table showing Macroeconomic factors analysed in economy analysis

Favourable

Unfavourable

Impact

Impact

High growth rate

Slow growth rate

1.

GDP/Growth rate

2.

Savings & investment

High

Low

3.

Inflation

Low

High

4.

Interest rate

Low

High

5.

Tax structure

Low

High

6.

Industrial growth rate

High

Low

7.

Balance of payment

Positive

Negative

8.

Foreign exchange position

High

Low

9.

Deficit financing/ fiscal deficit

Low

High

10.

Agriculture & monsoon

High

Low

11.

Infrastructural facilities

Good

Not good

INDUSTRY ANALYSIS
An investor ultimately invests his money in the securities of one or more
specific companies. Each company can be characterized as belonging to an industry. For
this reason an analyst has to undertake an industry analysis so as to study the
fundamental factors affecting the performance of different industries.
Concerned with the basis of industry analysis, this section is divided into three parts;
1.

Industry life cycle analysis.

2.

Study of the structure and characteristics of an industry.

3.

Profit potential of industries; Porter model.

INDUSTRY LIFE CYCLE ANALYSIS

Many industrial economists believe that the development of almost all every industry
may be analyzed in terms of lifecycle with four well defined stages;
i.

Pioneering stage

During this stage, the technology and or the product is relatively new and rapid growth in
demand for the output of industry. As a result there is a great opportunity for profit.
Large number of companies attempt to capture their share of the market.
ii.

Rapid growth stage

Firms which survive the intense competition of the pioneering stage, witness significant
expansion in their sales and profits.
iii.

Maturity and stabilization stage

During this stage, when the industry is more or less fully developed, its growth rate is
comparable to that of the economy as a whole.

iv.

Decline stage

With the satiation of demand, encroachment of new products, and changes in consumer
preferences, the industry eventually enters the decline stage relative to the economy as a
whole.

STUDY OF THE STRUCTURE AND CHARECTERISTS OF AN

INDUSTRY
Industry analysis should focus on the following;
a)

Structure of the industry and nature of competition.

i. The number of firms in the industry and the market share of the top few firms in

the industry.
ii. Licencing policy of the government.
iii. Entry barriers, if any
iv. Pricing policies of the firm.
b)

Nature and prospects of demand

i. Major customers and their requirements

ii. Key determinants of demand
iii. Degree of cyclicality in demand
c)

Cost, Efficiency and profitability

i.

Proportions of the key cost elements, namely, raw materials, labour, utilities and

fuel
ii.
d)

Productivity of labour
Technology and research

i.

Degree of technological stability

ii.

Important technological changes on the horizon and their implications

iii. Research and development outlays as a percentage of industry sales

PROFIT POTENTIAL OF INDUSTRIES

Michael porter has argued that the profit potential of an industry depends on

the combined strength of the following five basic competitive forces;

i.

Threat to new entrants

ii.

Rivalry among the existing firms

iii.

Pressure from substitute products

iv.

Bargaining power of buyers

v.

Bargaining power of sellers

3.2.3 COMPANY ANALYSIS

It is the final stage of fundamental analysis. It deals with the estimation of
return and risk of individual shares. This calls for information. Information regarding
companies can be broadly classified into two broad groups: internal and external.

Internal information consists of data and events made public by companies concerning
their operations
In company analysis, the analyst tries to forecast the future earnings of the
company because there is strong evidence those earnings have a direct and powerful
effect upon share prices. The level, trend and stability of earnings of a company,
however, depend upon a number of factors concerning the operations of the company.

CHPTER 3
RESEARCH METHEDOLOGY

RESEARCH METHODOLOGY
Research methodology is a way to solve the research problem systematically. It can be
understood as a science of studying how research is done scientifically therefore the research
methodology not only talks about the research methods but also considers the logic behind
the method used in the context of the research study.

RESEARCH DESIGN
Research Design is the conceptual structure within which the research isconducted, A researc
h is the arrangement of conditions for the collection and analysis of data in a manner that
aims
ANALYTICAL AND DESCRIPTIVE RESEARCH DESIGN

ANALYTICAL DESIGN

The researcher has to use facts or information already availability and analyse these to make
a critical evaluation of the materials.

DESCRIPTIVE RESEARCH

Descriptive research is those studies concerned with describing the characteristics

of the state of affairs as its exist at present. The main purposes descriptive research study is
to specify the objectives with sufficient precision to ensure that data collected are
relevant. The data collected are examined collected the information. The research design is
prepared keeping in view the objectives of the study the resources available.

STUDY APPROACH
A significant contribution of the fundamental models is that they provide for the
calculation of a number of financial ratios. These ratios are then used to assess the
financial health of a company, and to compare directly to the ratios for different

companies, which found that stocks with a high book-to-market value yielded higher
long-term returns. There is a long established tradition of attempting to use these
fundamental ratios as predictors of a companys future share price.

Two Approaches of fundamental analysis

While carrying out fundamental analysis, investors can use either of the following
approaches:
1. Top-down approach: In this approach, an analyst investigates both international and
national economic indicators, such as GDP growth rates, energy prices, inflation and
interest rates. The search for the best security then trickles down to the analysis of total
sales, price levels and foreign competition in a sector in order to identify the best
business in the sector.
2. Bottom-up approach: In this approach, an analyst starts the search with specific
businesses, irrespective of their industry/region.
Fundamental analysis is carried out with the aim of predicting the future performance of
a company. It is based on the theory that the market price of a security tends to move
towards its 'real value' or 'intrinsic value.' Thus, the intrinsic value of a security being
higher than the securitys market value represents a time to buy. If the value of the
security is lower than its market price, investors should sell it.

TECHNIQUE OF DATA COLLECTION

The data collected are mainly secondary data; collected from secondary sources such as
the internet, websites of selected companies, company balance sheets, annual reports,
press release, etc.

TOOLS USED FOR ANALYSIS

PAY OUT RATIO
Payout ratio is calculated to find the extent to which earnings per share have been
retained in the business. It is an important ratio because ploughing back of profits
enables a company to grow and pay more dividends in future.

Payout ratio = Dividend per share / Earnings per share.

RETURN ON EQUITY
Return on equity capital, which is the relationship between profits of a company and its
equity capital. This ratio is more meaningful to the equity shareholders who are
interested to know profits earned by the company and those profits, which can be made
available to pay dividend to them.
Return on equity = Profit after tax / Net wort
PRICE EARNING RATIO
Price earning ratio is the ratio between market price per equity share and earn-ings per
share. The ratio is calculated to make an estimate of appreciation in the value of a share
of a company and is widely used by investors to decide whether or not to buy share in a
particular company.
Price earning ratio = Market price / EPS
LONG TERM GROWTH RATE
Long-term growth rate is the relationship between average retention ratio and average
return on equity. This ratio is help to find the long term growth rate of the share.
Long term growth rate = Average retention ratio * Average ROE

SAMBLING TECHNIQUES

A variety of sampling techniques is available. The one selected depends on the requirements
of the project and its objectives. The various methods of sampling have been classified basing
on the representation probability or non probability and on element selection-restricted.
The sampling technique selected for conducting this study is judgment sampling. This is a
restricted and non- probabilistic method of sampling; where the sample consisting of five
banks has been selected on basis of the financial position of the company.

CHAPTER 5
DATA ANALYSIS AND INTERPRETATION

INDUSTRY ANALYSIS
Banking in India in the modern sense originated in the last decades of the 18th century.
The first banks were Bank of Hindustan (1770-1829) and The General Bank of India,
established 1786 and since defunct.
The largest bank, and the oldest still in existence, is the State Bank of India, which
originated in the Bank of Calcutta in June 1806, which almost immediately became the
Bank of Bengal. This was one of the three presidency banks, the other two being the
Bank of Bombay and the Bank of Madras, all three of which were established under
charters from the British East India Company. The three banks merged in 1921 to form
the Imperial Bank of India, which, upon India's independence, became the State Bank of
India in 1955. For many years the presidency banks acted as quasi-central banks, as did
their successors, until the Reserve Bank of India was established in 1935.
In 1969 the Indian government nationalised all the major banks that it did not already
own and these have remained under government ownership. They are run under a
structure know as 'profit-making public sector undertaking' (PSU) and are allowed to
compete and operate as commercial banks. The Indian banking sector is made up of four
types of banks, as well as the PSUs and the state banks; they have been joined since
1990s by new private commercial banks and a number of foreign banks.
Banking in India was generally fairly mature in terms of supply, product range and
reach-even though reach in rural India and to the poor still remains a challenge. The
government has developed initiatives to address this through the State bank of India
expanding its branch network and through the National Bank for Agriculture and Rural
Development with things like microfinance.
History
In ancient India there is evidence of loans from the Vedic period (beginning 1750 BC).
Later during the Maurya dynasty (321 to 185 BC), an instrument called adesha was in
use, which was an order on a banker desiring him to pay the money of the note to a third
person, which corresponds to the definition of a bill of exchange as we understand it
today. During the Buddhist period, there was considerable use of these instruments.
Merchants in large towns gave letters of credit to one another.

Colonial era
During the period of British rule merchants established the Union Bank of Calcutta in
1829, first as a private joint stock association, then partnership. Its proprietors were the
owners of the earlier Commercial Bank and the Calcutta Bank, who by mutual consent
created Union Bank to replace these two banks. In 1840 it established an agency at
Singapore, and closed the one at Mirzapore that it had opened in the previous year. Also
in 1840 the Bank revealed that it had been the subject of a fraud by the bank's
accountant. Union Bank was incorporated in 1845 but failed in 1848, having been
insolvent for some time and having used new money from depositors to pay its
dividends.
The Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint
Stock bank in India; it was not the first though. That honour belongs to the Bank of
Upper India, which was established in 1863, and which survived until 1913, when it
failed, with some of its assets and liabilities being transferred to the Alliance Bank of
Simla. Foreign banks too started to appear, particularly in Calcutta, in the 1860s. The
Comptoir d'Escompte de Paris opened a branch in Calcutta in 1860, and another in
Bombay in 1862; branches in Madras and Pondicherry, then a French possession,
followed. HSBC established itself in Bengal in 1869. Calcutta was the most active
trading port in India, mainly due to the trade of the British Empire, and so became a
banking centre.
The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in
1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank, established
in Lahore in 1895, which has survived to the present and is now one of the largest banks
in India. Around the turn of the 20th Century, the Indian economy was passing through a
relative period of stability. Around five decades had elapsed since the Indian Mutiny, and
the social, industrial and other infrastructure had improved. Indians had established small
banks, most of which served particular ethnic and religious communities.
The presidency banks dominated banking in India but there were also some exchange
banks and a number of Indian joint stock banks. All these banks operated in different
segments of the economy. The exchange banks, mostly owned by Europeans,
concentrated on financing foreign trade. Indian joint stock banks were generally
undercapitalized and lacked the experience and maturity to compete with the presidency

and exchange banks. This segmentation let Lord Curzon to observe, "In respect of
banking it seems we are behind the times. We are like some old fashioned sailing ship,
divided by solid wooden bulkheads into separate and cumbersome compartments."
The period between 1906 and 1911, saw the establishment of banks inspired by the
Swadeshi movement. The Swadeshi movement inspired local businessmen and political
figures to found banks of and for the Indian community. A number of banks established
then have survived to the present such as Bank of India, Corporation Bank, Indian Bank,
Bank of Baroda, Canara Bank and Central Bank of India. The fervour of Swadeshi
movement lead to establishing of many private banks in Dakshina Kannada and Udupi
district which were unified earlier and known by the name South Canara ( South
Kanara ) district. Four nationalised banks started in this district and also a leading private
sector bank. Hence undivided Dakshina Kannada district is known as "Cradle of Indian
Banking".
During the First World War (19141918) through the end of the Second World War
(19391945), and two years thereafter until the independence of India were challenging
for Indian banking. The years of the First World War were turbulent, and it took its toll
with banks simply collapsing despite the Indian economy gaining indirect boost due to
war-related economic activities. At least 94 banks in India failed between 1913 and 1918
as indicated in the following table:

Table showing Number of banks failed between 1913 and 1918

Number of banks

Authorised capital

Paid-up Capital

that failed

(Rs. Lakhs)

(Rs. Lakhs)

1913

12

274

35

1914

42

710

109

1915

11

56

1916

13

231

1917

76

25

1918

209

Years

Post-Independence
The partition of India in 1947 adversely impacted the economies of Punjab and West
Bengal, paralysing banking activities for months. India's independence marked the end of
a regime of the Laissez-faire for the Indian banking. The Government of India initiated
measures to play an active role in the economic life of the nation, and the Industrial
Policy Resolution adopted by the government in 1948 envisaged a mixed economy. This
resulted into greater involvement of the state in different segments of the economy
including banking and finance. The major steps to regulate banking included:

The Reserve Bank of India, India's central banking authority, was established in

April 1935, but was nationalised on 1 January 1949 under the terms of the Reserve Bank
of India (Transfer to Public Ownership) Act, 1948 (RBI, 2005b).

In 1949, the Banking Regulation Act was enacted which empowered the Reserve

Bank of India (RBI) "to regulate, control, and inspect the banks in India".

The Banking Regulation Act also provided that no new bank or branch of an

existing bank could be opened without a license from the RBI, and no two banks could
have common directors.
Nationalization in the 1960s

Despite the provisions, control and regulations of the Reserve Bank of India, banks in
India except the State Bank of India or SBI, continued to be owned and operated by
private persons. By the 1960s, the Indian banking industry had become an important tool
to facilitate the development of the Indian economy. At the same time, it had emerged as
a large employer, and a debate had ensued about the nationalization of the banking
industry. Indira Gandhi, the then Prime Minister of India, expressed the intention of the
Government of India in the annual conference of the All India Congress Meeting in a
paper entitled "Stray thoughts on Bank Nationalization." The meeting received the paper
with enthusiasm.
Thereafter, her move was swift and sudden. The Government of India issued an
ordinance ('Banking Companies (Acquisition and Transfer of Undertakings) Ordinance,
1969')) and nationalised the 14 largest commercial banks with effect from the midnight
of 19 July 1969. These banks contained 85 percent of bank deposits in the country.
Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke of
political sagacity." Within two weeks of the issue of the ordinance, the Parliament
passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it
received the presidential approval on 9 August 1969.
A second dose of nationalisation of 6 more commercial banks followed in 1980. The
stated reason for the nationalisation was to give the government more control of credit
delivery. With the second dose of nationalisation, the Government of India controlled
around 91% of the banking business of India. Later on, in the year 1993, the government
merged New Bank of India with Punjab National Bank. It was the only merger between
nationalised banks and resulted in the reduction of the number of nationalised banks
from 20 to 19. After this, until the 1990s, the nationalised banks grew at a pace of around
4%, closer to the average growth rate of the Indian economy.

Liberalization in the 1990s

In the early 1990s, the then government embarked on a policy of liberalization, licensing
a small number of private banks. These came to be known as New Generation tech-savvy
banks, and included Global Trust Bank (the first of such new generation banks to be set
up), which later amalgamated with Oriental Bank of Commerce, UTI Bank (since
renamed Axis Bank), ICICI Bank and HDFC Bank. This move, along with the rapid
growth in the economy of India, revitalised the banking sector in India, which has seen
rapid growth with strong contribution from all the three sectors of banks, namely,
government banks, private banks and foreign banks.
The next stage for the Indian banking has been set up with the proposed relaxation in the
norms for Foreign Direct Investment, where all Foreign Investors in banks may be given
voting rights which could exceed the present cap of 10%,at present it has gone up to 74%
with some restrictions.
The new policy shook the Banking sector in India completely. Bankers, till this time,
were used to the 464 method (Borrow at 4%; Lend at 6%; Go home at 4) of
functioning. The new wave ushered in a modern outlook and tech-savvy methods of
working for traditional banks. All this led to the retail boom in India. People not just
demanded more from their banks but also received more.
Current period
By 2013, banking in India was generally fairly mature in terms of supply, product range
and reach-even though reach in rural India still remains a challenge for the private sector
and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are
considered to have clean, strong and transparent balance sheets relative to other banks in
comparable economies in its region. The Reserve Bank of India is an autonomous body,
with minimal pressure from the government.
With the growth in the Indian economy expected to be strong for quite some timeespecially in its services sector-the demand for banking services, especially retail
banking, mortgages and investment services are expected to be strong. One may also
expect M&As, takeovers, and asset sales.
In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake
in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor
has been allowed to hold more than 5% in a private sector bank since the RBI announced

norms in 2005 that any stake exceeding 5% in the private sector banks would need to be
vetted by them.
In recent years critics have charged that the non-government owned banks are too
aggressive in their loan recovery efforts in connexion with housing, vehicle and personal
loans. There are press reports that the banks' loan recovery efforts have driven defaulting
borrowers to suicide.
Adoption of banking technology
The IT revolution has had a great impact on the Indian banking system. The use of
computers has led to the introduction of online banking in India. The use of computers in
the banking sector in India has increased many fold after the economic liberalisation of
1991 as the country's banking sector has been exposed to the world's market. Indian
banks were finding it difficult to compete with the international banks in terms of
customer service, without the use of information technology.
The RBI set up a number of committees to define and co-ordinate banking technology.
These have included:

In 1984 was formed the Committee on Mechanisation in the Banking Industry

(1984) whose chairman was Dr. C Rangarajan, Deputy Governor, Reserve Bank of India.
The major recommendations of this committee were introducing MICR technology in all
the banks in the metropolises in India. This provided for the use of standardized cheque
forms and encoders.

In 1988, the RBI set up the Committee on Computerisation in Banks (1988)

headed by Dr. C Rangarajan. It emphasized that settlement operation must be

computerized in the clearing houses of RBI in Bhubaneshwar, Guwahati, Jaipur, Patna
and Thiruvananthapuram. It further stated that there should be National Clearing of intercity cheques at Kolkata, Mumbai, Delhi, Chennai and MICR should be made
Operational. It also focused on computerisation of branches and increasing connectivity
among branches through computers. It also suggested modalities for implementing online banking. The committee submitted its reports in 1989 and computerisation began
from 1993 with the settlement between IBA and bank employees' associations.

In 1994, the Committee on Technology Issues relating to Payment systems,

Cheque Clearing and Securities Settlement in the Banking Industry (1994) was set up
under Chairman W S Saraf. It emphasized Electronic Funds Transfer (EFT) system, with
the BANKNET communications network as its carrier. It also said that MICR clearing
should be set up in all branches of all those banks with more than 100 branches.

In 1995, the Committee for proposing Legislation on Electronic Funds Transfer

and other Electronic Payments (1995) again emphasized EFT system.

Total numbers of ATMs installed in India by various banks as on end June 2012 is
99,218. The New Private Sector Banks in India are having the largest numbers of ATMs,
which is followed by off-site ATMs belonging to SBI and its subsidiaries and then by
Nationalised banks and Foreign banks. While on site is highest for the Nationalised
banks of India.
SWOT Analysis
STRENGTHS

Valuable contributor to GDP

Regulatory environment

Government Support

WEAKNESSES

Increasing NPA

Low penetration

Lack of product differentiation

OPPORTUNITIES

Modern Technology

Untapped Rural Market

Globalization

THREATS

Unorganized money lending market

Customer dissatisfaction

Rise of monopolistic structures

COMPANY ANALYSIS
STATE BANK OF INDIA

Type

Public

Traded as

NSE: SBIN
BSE: 500112
LSE: SBID
BSE SENSEX Constituent
CNX Nifty Constituent

Industry

Banking, Financial Services

Founded

27 January 1921, Imperial Bank of India

1 July 1955, State Bank of India
2 June 1956,[1] nationalization

Headquarters

Mumbai, Maharashtra, India

Area served

Worldwide

Key people

Arundhati Bhattacharya
(Chairperson)

Products

consumer banking, corporate

banking, finance and
insurance, investment banking, mortgage
loans, private banking, private
equity, savings,Securities, asset
management, wealth management, Credit
cards,

Revenue

210736 crore (US$33 billion) (2013)[2][3]

Profit

17916 crore (US$2.8 billion) (2013)[2][3]

Total assets

2374839 crore (US$380 billion)

(2013)[2][3]

Total equity

203417.50 crore (US$32 billion)

(2015)[2][3]

Owner

Government of India

Number of

222,033 (2014)

employees

Slogan

The Banker to Every Indian

Website

www.sbi.co.in

State Bank of India (SBI) is a multinational banking and financial services company
based in India. It is a government-owned corporation with its headquarters in Mumbai,
Maharashtra. As of December 2013, it had assets of US$388 billion and 16,000
branches, including 190 foreign offices, making it the largest banking and financial
services company in India by assets.
State Bank of India is one of the Big Four banks of India, along with ICICI Bank, Punjab
National Bank and Bank of Baroda.
The bank traces its ancestry to British India, through the Imperial Bank of India, to the
founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the
Indian Subcontinent. Bank of Madras merged into the other two presidency banks
Bank of Calcutta and Bank of Bombayto form the Imperial Bank of India, which in
turn became the State Bank of India. Government of India nationalised the Imperial Bank
of India in 1955, with Reserve Bank of India taking a 60% stake, and renamed it the
State Bank of India. In 2008, the government took over the stake held by the Reserve
Bank of India.
SBI is a regional banking behemoth and has 20% market share in deposits and loans
among Indian commercial banks.
History
The roots of the State Bank of India lie in the first decade of 19th century, when the
Bank of Calcutta, later renamed the Bank of Bengal, was established on 2 June 1806.

The Bank of Bengal was one of three Presidency banks, the other two being the Bank of
Bombay (incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1
July 1843). All three Presidency banks were incorporated as joint stock companies and
were the result of the royal charters. These three banks received the exclusive right to
issue paper currency till 1861 when with the Paper Currency Act, the right was taken
over by the Government of India. The Presidency banks amalgamated on 27 January
1921, and the reorganised banking entity took as its name Imperial Bank of India. The
Imperial Bank of India remained a joint stock company but without Government
participation.
Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of
India, which is India's central bank, acquired a controlling interest in the Imperial Bank
of India. On 1 July 1955, the Imperial Bank of India became the State Bank of India. The
government of India recently acquired the Reserve Bank of India's stake in SBI so as to
remove any conflict of interest because the RBI is the country's banking regulatory
authority.
In 1959, the government passed the State Bank of India (Subsidiary Banks) Act, which
made eight state banks associates of SBI. A process of consolidation began on 13
September 2008, when the State Bank of Saurashtra merged with SBI.
SBI has acquired local banks in rescues. The first was the Bank of Behar (est. 1911),
which SBI acquired in 1969, together with its 28 branches. The next year SBI acquired
National Bank of Lahore (est. 1942), which had 24 branches. Five years later, in 1975,
SBI acquired Krishnaram Baldeo Bank, which had been established in 1916 in Gwalior
State, under the patronage of Maharaja Madho Rao Scindia. The bank had been the
Dukan Pichadi, a small moneylender, owned by the Maharaja. The new banks first
manager was Jall N. Broacha, a Parsi. In 1985, SBI acquired the Bank of Cochin in
Kerala, which had 120 branches. SBI was the acquirer as its affiliate, the State Bank of
Travancore, already had an extensive network in Kerala.
The State Bank of India and all its associate banks are identified by the same blue
keyhole logo. The State Bank of India wordmark usually has one standard typeface, but
also utilises other typefaces.

On October 7, 2013, Arundhati Bhattacharya became the first woman to be appointed

Chairperson of the bank.
Operations
SBI provides a range of banking products through its network of branches in India and
overseas, including products aimed at non-resident Indians (NRIs). SBI has has 14
regional hubs and 57 Zonal Offices that are located at important cities throughout India.
Domestic presence
SBI had 14,816 branches in India, as on 31 March 2013, of which 9,851 (66%) were in
Rural and Semi-urban areas. In the financial year 2012-13, its revenue was INR 200,560
Crores (US$ 36.9 billion), out of which domestic operations contributed to 95.35% of
revenue. Similarly, domestic operations contributed to 88.37% of total profits for the
same financial year
International presence
As of 28 June 2013, the bank had 180 overseas offices spread over 34 countries. It has
branches of the parent in Moscow, Colombo, Dhaka, Frankfurt, Hong Kong, Tehran,
Johannesburg, London, Los Angeles, Male in the Maldives, Muscat, Dubai, New York,
Osaka, Sydney, and Tokyo. It has offshore banking units in the Bahamas, Bahrain, and
Singapore, and representative offices in Bhutan and Cape Town. It also has an ADB in
Boston, USA.
The Canadian subsidiary, State Bank of India (Canada) also dates to 1982. It has seven
branches, four in the Toronto area and three in the Vancouver area.
SBI operates several foreign subsidiaries or affiliates. In 1990, it established an offshore
bank: State Bank of India (Mauritius). SBI (Mauritius) has 15 branches in major
cities/towns of the country including Rodrigues.
In 1982, the bank established a subsidiary, State Bank of India (California), which now
has ten branches nine branches in the state of California and one in Washington, D.C.
The 10th branch was opened in Fremont, California on 28 March 2011. The other eight
branches in California are located in Los Angeles, Artesia, San Jose, Canoga Park,
Fresno, San Diego, Tustin and Bakersfield.

In Nigeria, SBI operates as INMB Bank. This bank began in 1981 as the Indo-Nigerian
Merchant Bank and received permission in 2002 to commence retail banking. It now has
five branches in Nigeria.
In Nepal, SBI owns 55% of Nepal SBI Bank, which has branches throughout the
country. In Moscow, SBI owns 60% of Commercial Bank of India, with Canara Bank
owning the rest. In Indonesia, it owns 76% of PT Bank Indo Monex.
The State Bank of India already has a branch in Shanghai and plans to open one in
Tianjin.
In Kenya, State Bank of India owns 76% of Giro Commercial Bank, which it acquired
for US$8 million in October 2005.
Associate banks
SBI has five associate banks; all use the State Bank of India logo, which is a blue circle,
and all use the "State Bank of" name, followed by the regional headquarters' name:

State Bank of Bikaner & Jaipur

State Bank of Hyderabad

State Bank of Mysore

State Bank of Patiala

State Bank of Travancore

Earlier SBI had seven associate banks, all of which had belonged to princely states until
the government nationalised them between October 1959 and May 1960. In tune with the
first Five Year Plan, which prioritised the development of rural India, the government
integrated these banks into State Bank of India system to expand its rural outreach. There
has been a proposal to merge all the associate banks into SBI to create a "mega bank"
and streamline the group's operations.
The first step towards unification occurred on 13 August 2008 when State Bank of
Saurashtra merged with SBI, reducing the number of associate state banks from seven to

six. Then on 19 June 2009 the SBI board approved the absorption of State Bank of
Indore. SBI holds 98.3% in State Bank of Indore. (Individuals who held the shares prior
to its takeover by the government hold the balance of 1.77%.)
The acquisition of State Bank of Indore added 470 branches to SBI's existing network of
branches. Also, following the acquisition, SBI's total assets will inch very close to the 10
trillion mark (10 billion long scale). The total assets of SBI and the State Bank of Indore
stood at 9,981,190 million as of March 2009. The process of merging of State Bank of
Indore was completed by April 2010, and the SBI Indore branches started functioning as
SBI branches on 26 August 2010.

Non-banking subsidiaries
Apart from its five associate banks, SBI also has the following non-banking subsidiaries:

SBI Capital Markets Ltd

SBI Funds Management Pvt Ltd

SBI Factors & Commercial Services Pvt Ltd

SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)

SBI DFHI Ltd

SBI Life Insurance Company Limited

SBI General Insurance

In March 2001, SBI (with 74% of the total capital), joined with BNP Paribas (with 26%
of the remaining capital), to form a joint venture life insurance company named SBI Life
Insurance company Ltd. In 2004, SBI DFHI (Discount and Finance House of India) was
founded with its headquarters in Mumbai.
Other SBI service points
SBI has 27,000+ ATMs and SBI group (including associate banks) has 32,752 ATMs.
SBI has become the first bank to install an ATM at Drass in the Jammu & Kashmir
Kargil region. This was the Bank's 27,032nd ATM on 27 July 2012.

Logo and slogan

The logo of the State Bank of India is a blue circle with a small cut in the bottom

that depicts perfection and the small man the common man - being the center of the
bank's business.

Slogans: "PURE BANKING, NOTHING ELSE", "WITH YOU - ALL THE

WAY", "A BANK OF THE COMMON MAN", "THE BANKER TO EVERY

INDIAN", "THE NATION BANKS ON US"
Listings and shareholding
As on 30 June 2013, Government of India held around 62% equity shares in SBI. Over
800,000 individual shareholders hold approx. 5.7% of its shares. Life Insurance
Corporation of India is the largest non-promoter shareholder in the company with 10.9%
shareholding.
Table showing Shareholding pattern of State Bank of India
Shareholders

Shareholding

Promoters: Government of India

62.31%

Insurance Companies

11.90%

Foreign Institutional Investors

09.79%

Individual shareholders

05.70%

GDRs

02.71%

Others

07.59%

Shareholding
promoters :Govt.of
India
insurance compnies
foreign institutional
investors
individual shareholders
GDRs
Others

Chart showing Shareholding pattern of SBI

The equity shares of SBI are listed on the Bombay Stock Exchange, where it is a
constituent of the BSE SENSEX index, and the National Stock Exchange of India, where
it is a constituent of the S&P CNX Nifty. Its Global Depository Receipts (GDRs) are
listed on the London Stock Exchange.
Employees
SBI is one of the largest employers in the country having 228,296 employees as on 31st
March 2013, out of which there were 46,833 female employees(21%) and 2,402 disabled
employees(1%). On the same date, SBI had 43,550 Schedule Caste(19%) and 16,764
Schedule Tribe employees(7%). The percentage of Officers, Assistants and Sub-staff was
35%, 48% and 17% respectively on the same date.
Hiring drive: The bank hired 20,682 Assistants in FY 2012-13, from over 30 lakh
applicants, for expansion of the branch network and to mitigate staff shortage,
particularly at rural and semi-urban branches. In the same year, it recruited 847
probationary officers from around 17 lakh candidates which applied for officers
position.
Staff productivity: As per its Annual Report for FY 2012-13, each employee contributed
to revenues of INR 944 Lacs and net profit of INR 6.45 Lacs.

Recent awards and recognitions

SBI was ranked 298th in the Fortune Global 500 rankings of the world's biggest

corporations for the year 2012.

SBI won "Best Public Sector Bank" award in the D&B India's study on 'India's Top

Banks 2013'.

State Bank of India won three IDRBT Banking Technology Excellence Awards

2013 for Electronic Payment Systems, Best use of technology for Financial
Inclusion, and Customer Management & Business Intelligence in the large bank
category.

SBI won National Award for its performance in the implementation of Prime

Ministers Employment Generation Programme (PMEGP) scheme for the year 2012.

Best Online Banking Award, Best Customer Initiative Award & Best Risk

Management Award (Runner Up) by IBA Banking Technology Awards 2010

SKOCH Award 2010 for Virtual corporation Category for its e-payment solution

SBI was the only bank featured in the "top 10 brands of India" list in an annual

survey conducted by Brand Finance and The Economic Times in 2010.

The Bank of the year 2009, India (won the second year in a row) by The Banker

Magazine

Best Bank Large and Most Socially Responsible Bank by the Business Bank

Awards 2009

Best Bank 2009 by Business India

The Most Trusted Brand 2009 by The Economic Times.

SBI was named the 29th most reputed company in the world according to Forbes

2009 rankings

Most Preferred Bank & Most preferred Home loan provider by CNBC

Visionaries of Financial Inclusion By FINO

Technology Bank of the Year by IBA Banking Technology Awards

SBI was 11th most trusted brand in India as per the Brand Trust Report 2010.

Major competitors
Some of the major competitors for SBI in the banking sector are Axis Bank, ICICI Bank,
HDFC Bank, Punjab National Bank, Bank of Baroda, Canara Bank and Bank of India.
However in terms of average market share, SBI is by far the largest player in the market.

YES BANK
Type

Public company

Traded as

BSE: 532648
NSE: YESBANK

Industry

Banking & financial services

Founded

2004

Founder

Rana Kapoor and Late Ashok Kapur

Headquarters

Mumbai, India

Key people

Rana Kapoor (Managing Director & CEO)[1]

Products

Banking and financial services[2] SMEs[3]

Revenue

99.8 billion (US$1.6 billion) (2013)[4]

Net income

11.7 billion (US$190 million) (2014)[4]

Total assets

603.6 billion (US$9.6 billion) (2014)[4]

Website

www.yesbank.in

Yes Bank is a private bank in India. It was founded by Ashok Kapur and Rana Kapoor,
with the duo holding a collective financial stake of 27.16%. Mr.Ashok Kapur was killed
in a terrorist attack in 2008 in Mumbai.
In 2010, the bank announced the roll-out of a strategic blueprint, named Version 2.0 of
the bank, to further accelerate its business growth in the retail banking space, with the
objective to achieve by 2015, a balance sheet size of 150,000 crore, deposits of 125,000
crore, advances of 100,000 crore, a pan India network of 900 branches and a human
capital base of 12750 by 2015.

Corporate and Institutional Banking

Yes Bank deals in corporate investment services. This involves providing, for a fee,
financial advice to customers, generally corporate or individual investors.

Commercial Banking
Yes Bank also competes in the South Asian commercial banking market. Commercial
banking is essentially the equivalent of retail banking for commercial entities, but is
however generally more expensive and accounts yield less interest, since corporate firms
don't generally regard earning interest as a major component of their need for banking
services.

Branch Banking
Business Banking
Yes Bank is a major competitor in the business banking sector of the Indian economy,
especially amongst smaller- and medium-sized clients. Business banking is centred
primarily on Cash Handling, Payment, Direct Banking, Liabilities and Investment, and
Trade services.

Retail Banking
Retail Banking is the general branch of banking, targeted at private individuals.
Customers are currently being handled by a branch network, composed of over 500
branches across the country with 1122+ ATMs, and Internet Banking facilities.

Indian financial Institutions

IFI services are aimed at various relationship and product managers, and centre around a
variety of products including Debt, Trade Finance, Guarantees, Treasury Services,
Working Capital Finance, Cash Management & Transactional Services, Liabilities and
Investment Management, and Liquidity Management Solutions to its customers.

Investment Banking
Yes Bank's Investment Banking division consists of domestic and cross-border Mergers
and Acquisitions, Joint Venture Advisory Services, Private Equity Placement as well as
Merchant Banking Services across select industry verticals.

Corporate Finance- YES BANK's Corporate Finance practice offers a combination of

advisory services and customised products to optimise risk based on "Knowledge
Arbitrage". This sector of banking can often be quite dangerous and borders on legal
ambiguity.

Financial Marketing- The Financial Markets (FM) business model provides Risk
Management solutions related to foreign currency and interest rate exposures of clients.

Awards
YES BANK awarded with The Strongest Bank Balance Sheet in India by the Asian
Banker Magazine.

Table showing Shareholding pattern of Yes Bank

Shareholders

Shareholding

Promoters

26.13

Individual

8.97

Institutions

15.62

FIIs

46.62

Government

Others

2.66

Shareholding pattern
MUTUAL FUND AND UTI - II
DEUTSCHE BANK TRUST CO.
INSURANCE COMPANIES
INDIVIDUALS
BANKS,FINANCIAL
INSTITUTUIONS AND UTI
BODIES CORPORATE

Chart showing shareholding pattern of Yes Bank

ICICI BANK
Type

Traded as

Public company

BSE: 532174

NSE: ICICIBANK

NYSE: IBN

BSE SENSEX Constituent

CNX Nifty Constituent

Industry

Banking, Financial services

Founded

1994

Headquarters

Mumbai, Maharashtra, India[1]

Area served

Worldwide

Key people

Mr. K. V. Kamath (Chairman)

Ms.Chanda Kochhar (MD & CEO)

Products

Credit cards, Consumer

banking, corporate banking,finance and
insurance,investment banking, mortgage
loans, private banking, wealth
management

Revenue

US$ 9.8 billion (2015)[2]

Operating

US$ 3.2 billion (2015)[3]

income
Profit

US$ 1.8 billion (2015)[4]

Total assets

US$ 103.4 billion (2015)[5]

Total equity

US$ 12.9 billion (2015)[6]

Number of

67,857 (2015)[7]

employees
Website

www.icicibank.com

ICICI Bank is an Indian multinational bank and financial services company

headquartered in Mumbai. Based on 2013 information, it is the second largest bank in
India by assets and third largest by market capitalisation. It offers a wide range of
banking products and financial services to corporate and retail customers through a
variety of delivery channels and through its specialised subsidiaries in the areas of

investment banking, life and non-life insurance, venture capital and asset management.
The Bank has a network of 3,514 branches and 11,063 ATM's in India, and has a
presence in 19 countries.
ICICI Bank is one of the Big Four banks of India, along with State Bank of India, Punjab
National Bank and Bank of Baroda. The bank has subsidiaries in the United Kingdom,
Russia, and Canada; branches in United States, Singapore, Bahrain, Hong Kong, Sri
Lanka, Qatar and Dubai International Finance Centre; and representative offices in
United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and
Indonesia. The company's UK subsidiary has established branches in Belgium and
Germany.
In March 2013, Operation Red Spider showing high-ranking officials and some
employees of ICICI Bank involved in money laundering. After a government inquiry,
ICICI Bank suspended 18 employees and faced penalties from the Reserve Bank of India
in relation to the activity.

Corporate history
ICICI Bank was established by the Industrial Credit and Investment Corporation of
India, an Indian financial institution, as a wholly owned subsidiary in 1955. The parent
company was formed in 1955 as a joint-venture of the World Bank, India's public-sector
banks and public-sector insurance companies to provide project financing to Indian
industry. The bank was initially known as the Industrial Credit and Investment
Corporation of India Bank, before it changed its name to the abbreviated ICICI Bank.
The parent company was later merged with the bank.
ICICI Bank launched internet banking operations in 1998.
ICICI's shareholding in ICICI Bank was reduced to 46 percent, through a public offering
of shares in India in 1998, followed by an equity offering in the form of American
Depositary Receipts on the NYSE in 2000. ICICI Bank acquired the Bank of Madura
Limited in an all-stock deal in 2001 and sold additional stakes to institutional investors
during 2001-02.
In the 1990s, ICICI transformed its business from a development financial institution
offering only project finance to a diversified financial services group, offering a wide
variety of products and services, both directly and through a number of subsidiaries and
affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first
bank or financial institution from non-Japan Asia to be listed on the NYSE.

In 2000, ICICI Bank became the first Indian bank to list on the New York Stock
Exchange with its five million American depository shares issue generating a demand
book 13 times the offer size.
In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger
of ICICI and two of its wholly owned retail finance subsidiaries, ICICI Personal
Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. The
merger was approved by shareholders of ICICI and ICICI Bank in January 2002, by the
High Court of Gujarat at Ahmedabad in March 2002 and by the High Court of Judicature
at Mumbai and the Reserve Bank of India in April 2002.
In 2008, following the 2008 financial crisis, customers rushed to ICICI ATMs and
branches in some locations due to rumours of adverse financial position of ICICI Bank.
The Reserve Bank of India issued a clarification on the financial strength of ICICI Bank
to dispel the rumours.

Corporate governance

Group Anti Money Laundering Policy: The ICICI Group AML Policy establishes

the standards of AML compliance and is applicable to all activities.

Code of Conduct: ICICI Bank has formulated a Code of Business Conduct and

Ethics for its directors and employees.

Creation of market infrastructure in India

ICICI Bank has contributed to set up different institutions which include the following:

National Stock Exchange

The National Stock Exchange was promoted by Indias leading financial institutions
(including ICICI Ltd.) in 1992 on behalf of the Government of India with the objective
of establishing a nationwide trading facility for equities, debt instruments and hybrids, by
ensuring equal access to investors all over the country through an appropriate
communication network.

Credit Rating Information Services of India Limited

In 1987, ICICI Ltd along with UTI set up CRISIL as India's first professional credit
rating agency. CRISIL offers a comprehensive range of integrated products and service

offerings which include credit ratings, capital market information, industry analysis and
detailed reports.

National Commodities and Derivatives Exchange Limited

NCDEX is a professionally managed online multi-commodity exchange, set up in 2003,
by ICICI Bank Ltd, LIC, NABARD, NSE, Canara Bank, CRISIL, Goldman Sachs,
Indian Farmers Fertiliser Cooperative Limited (IFFCO) and Punjab National Bank.

Financial Innovation Network and Operations Pvt Ltd.

ICICI Bank has facilitated setting up of "FINO Cross Link to Case Link Study" in 2006,
as a company that would provide technology solutions and services to reach the
underserved and underbanked population of the country. Using cutting edge technologies
like smart cards, biometrics and a basket of support services, FINO enables financial
institutions to conceptualise, develop and operationalise projects to support sector
initiatives in microfinance and livelihoods.

Entrepreneurship Development Institute of India

Entrepreneurship Development Institute of India (EDII), an autonomous body and notfor-profit society, was set up in 1983, by the erstwhile apex financial institutions like
IDBI, ICICI, IFCI and SBI with the support of the Government of Gujarat as a national
resource organisation committed to entrepreneurship development, education, training
and research.

North Eastern Development Finance Corporation

North Eastern Development Finance Corporation (NEDFI) was promoted by national
level financial institutions like ICICI Ltd in 1995 at Guwahati, Assam for the
development of industries, infrastructure, animal husbandry, agri-horticulture plantation,
medicinal plants, sericulture, aquaculture, poultry and dairy in the North Eastern states of
India. NEDFI is the premier financial and development institution for the North East
region.

Asset Reconstruction Company India Limited

Following the enactment of the Securitisation Act in 2002, ICICI Bank together with
other institutions, set up Asset Reconstruction Company India Limited (ARCIL) in 2003,

to create a facilitative environment for the resolution of distressed debt in India. ARCIL
was established to acquire Non Performing Assets (NPAs) from financial institutions and
banks with a view to enhance the management of these assets and help in the
maximisation of recovery. This would relieve institutions and banks from the burden of
pursuing NPAs, and allow them to focus on core banking activities.
Credit Information Bureau of India Limited
ICICI Bank has also helped in setting up Credit Information Bureau of India Limited
(CIBIL), Indias first national credit bureau in 2000. CIBIL provides a repository of
information (which contains the credit history of commercial and consumer borrowers)
to its members in the form of credit information reports. The members of CIBIL include
banks, financial institutions, state financial corporations, non-banking financial
companies, housing finance companies and credit card companies.

Institutional Investor Advisory Services India Limited (IiAS)

ICICI Bank, through ICICI Prudential Life Insurance Company, has invested in IiAS.
IiAS is a voting advisory firm aka proxy advisory firm, dedicated to providing
participants in the Indian market with data, research and commentary. It provides
recommendations on resolutions placed before shareholders of over 300 companies.

Corporate Social Responsibility programmes for Elementary Education

Read to Lead Phase I: Read to Lead is an initiative of ICICI Bank to facilitate

access to elementary education for underprivileged children in the age group of 314
years including girls and tribal children from the remote rural areas. The Read to Lead
initiative supports partner NGOs to design and implement programmes that mobilise
parent and community involvement in education, strengthen schools and enable children
to enter and complete formal elementary education. Read to Lead has reached out to
100,000 children across 14 states of Andhra Pradesh, Bihar, Delhi, Gujarat, Haryana,
Jharkhand, Karnataka, Maharashtra, Orissa, Rajasthan, Tamil Nadu, Tripura, Uttar
Pradesh and West Bengal.

Read to Lead Phase II:

In Phase II of the Read to Lead programme, ICICI Bank has supported the establishment
of 63 libraries that will reach out to approximately 7,200 children in the rural areas of

Jagdalpur block of Bastar district in Chhattisgarh. The programme includes building

libraries, sourcing books and conducting various interactive activities to make the library
a dynamic centre for learning.
Products
MySavings Rewards
ICICI Bank has rolled-out the programme MySavings Rewards from 1 September
2012, where reward points are offered to individual domestic customers for a variety of
transactions done through the savings bank account. Reward points are offered
automatically to customers for activating Internet banking, shopping online/ paying
utility bills with Internet banking and auto-debit from savings account towards equated
monthly installments for home/ auto/ personal loan/ recurring deposit. Customers are
required to maintain a monthly average balance of 15,000 or more.
Customers can redeem their reward points by

Logging into his ICICI Bank internet banking account

Calling up customer care

Walking into the nearest ICICI Bank branch

iWish- the flexible recurring deposit

iWish is a flexible recurring deposit product launched by ICICI Bank for its savings
account customers. iWish is a fun and flexible way to encourage savings among youth
for fulfilling aspirations. Unlike a traditional recurring deposit, iWish allows customers
to save varying amounts of money at any time of their choice. Customers can create
several goals and track their progress on an easy-to-use online interface. They can also
share their wishes on Facebook and let their friends and family be a part of their dreams
by contributing to their account from any bank account. There will be no penalties if a
customer misses his monthly contribution to the recurring deposit. The minimum
duration is six months and a customer can open this account starting with 500.
The key features of iWish are:

Flexibility: Flexible recurring deposit allows a customer to deposit any amount at any
point of time. Customers also have an option of depositing money by giving a
standing instruction.

Better returns: Customers can earn recurring deposit interest rates on their iWish
account while enjoying the freedom of not having to deposit every month.

Sharing: Customers can choose to share their wishes on Facebook and let their
friends and family be part of their dreams.

Contributions: iWish gives an opportunity to the family and friends of a customer to

contribute and help him attain his aspirations faster. Contributions can be made from
any bank account using a VISA debit card.

ICICI Bank has developed this product in collaboration with Social Money.
Go Green Initiative
The Go Green Initiative is an organisation wide initiative that moves beyond moving
people, processes and customers to cost effective automated channels to build awareness
and consciousness of our environment,our nation and our society.
Objective
ICICI Banks Green initiative is to make healthy environment in the organisation i.e.; to
create intrapersonal skills amongs the customer and understanding between employees of
the organisation.

Broad objectives of the ICICI are:

(a) to assist in the creation, expansion and modernisation of private concerns;
(b) to encourage the participation of internal and external capital in the private concerns;
(c) to encourage private ownership of industrial investment.
Green products and services Instabanking
It is the platform that brings together all alternate channels under one umbrella and gives
customers the option of banking through Internet banking, i-Mobile banking, IVR
Banking.
This reduces the carbon footprint of the customers by ensuring they do not have to resort
to physical statements or travel to their branches.

Vehicle Finance
As an initiative towards more environment friendly way of life, Auto loans offer 50%
waiver on processing fee on car models which uses alternate mode of energy. The
models identified for the purpose are, Maruti's LPG version of Maruti 800, Omni and
Versa, Hyundai's Santro Eco, Civic Hybrid of Honda, Reva electric cars, Tata Indica
CNG and Mahindra Logan CNG versions.

Carbon Footprint Calculator

Inputs include region, user input of the distance traveled in a particular medium of
transport daily, electricity consumed per month and LPG cylinder/piped natural gas used
per month. It calculates the net carbon footprint to create awareness and sensitize people
about the environment.It also shows the world's and India's average carbon footprint.
Subsidiaries
Domestic

ICICI Prudential Life Insurance Company Limited

ICICI Lombard General Insurance Company Limited

ICICI Prudential Asset Management Company Limited

ICICI Prudential Trust Limited

ICICI Securities Limited

ICICI Securities Primary Dealership Limited

ICICI Venture Funds Management Company Limited

ICICI Home Finance Company Limited

ICICI Investment Management Company Limited

ICICI Trusteeship Services Limited

ICICI Prudential Pension Funds Management Company Limited

International

ICICI Bank UK PLC

ICICI Bank Canada

ICICI Bank Eurasia Limited Liability Company

ICICI Securities Holdings Inc.

ICICI Securites Inc.

ICICI International Limited

Acquisitions

1996: SCICI Ltd. A diversified financial institution with headquarters in Mumbai

1997: ITC Classic Finance. Incorporated in 1986, ITC Classic was a non-bank

financial firm that engaged in hire purchase, and leasing operations. At the time of being
acquired, ITC Classic had eight offices, 26 outlets, and 700 brokers.

1998: Anagram Finance. Anagram had built up a network of some 50 branches in

Gujarat, Rajasthan, and Maharashtra that were primarily engaged in retail financing of
cars and trucks. It also had some 250,000 depositors.

2001: Bank of Madurai

2002: The Darjeeling and Shimla branches of Grindlays Bank

2005: Investitsionno-Kreditny Bank (IKB), a Russian bank

2007: Sangli Bank. Sangli Bank was a private sector unlisted bank, founded in

1916, and 30% owned by the Bahte family. Its headquarter were in Sangli in
Maharashtra, and it had 198 branches. It had 158 in Maharashtra and 31 in Karnataka,
and others in Gujarat, Andhra Pradesh, Tamil Nadu, Goa, and Delhi. Its branches were
relatively evenly split between metropolitan areas and rural or semi-urban areas.

2010: The Bank of Rajasthan (BOR) was acquired by the ICICI Bank in 2010 for

3,000 crores. RBI was critical of BOR's promoters not reducing their holdings in the
company. BOR has since been merged with ICICI Bank.
Awards
2004

Best Bank in India Award presented by Euromoney Magazine

2007

ICICI Bank has been conferred the Euromoney Award 2007 for the Best Bank in

the Asia-Pacific Regio

ICICI Bank wins the Excellence in Remittance Business award by The Asian

Banker
2009

ICICI Bank bags the "Best bank in SME financing (Private Sector)" at the Dun &

Bradstreet Banking awards

2011

ICICI Bank is the only Indian brand to figure in the BrandZ Top 100 Most

Valuable Global Brands Report, second year in a row

ICICI Bank ranked 5th in the list of "57 Indian Companies", and 288 th in World

Rankings in Forbes Global 2000 list.

ICICI Bank has won the "Banking Technology Awards 2010" at The Indian Banks

Association in the following categories

ICICI Bank was recognised for its Special Citation of the Fully Electronic Branch

Service Channel, first set up at Hiranandani Estate, Thane, at the Financial Insights
Innovation Awards held in conjunction with Asian Financial Services Congress

For the second year in a row, ICICI Bank was ranked 70th in the Brandirectory

league tables of the worlds most valuable brands by, The BrandFinance Banking 500

ICICI Bank was ranked 1st in the Banking and Finance category and 9th in the

"2010 Best Companies To Work For" by Business Today

ICICI Bank UK, HiSAVE product range has been awarded the Consumer

Moneyfacts Awards 2011 for the 'Best Online Savings Provider'

For the second consecutive year, ICICI Bank was ranked second in the "India's 50

Biggest Financial Companies", in The BW REAL 500 by Business World

ICICI Bank was one of the winners in the Global Awards for Enterprise & IT

Architecture Excellence. ICICI Bank bagged the award in the Business Intelligence and
Analytics' category.

The Brand Trust Report ranks ICICI among the top 4 most trusted financial

institutions.

ICICI Bank awarded "House Of The Year (India)", by Asia Risk magazine, for

eighth time in a row since 2004

ICICI Bank awarded the most Tech-friendly Bank award by Business World

ICICI Bank received the Best Trade Finance Bank in India by The Asset Triple A

Award, Hong Kong

ICICI Bank is the first and the only Indian brand to be ranked as the 45th most

valuable global brand by BrandZ Top 100 Global Brands Report

2012

Airtel, ICICI among 'top 100 global brands'

ICICI Bank won the "Best Bond House (India) 2011", by IFR Asia

ICICI Bank awarded the Best Bank (India) by Global Finance

ICICI Bank won the "Century International Quality Era Award" at Geneva

ICICI Bank was awarded the "Best Foreign Exchange Bank (India)" by Finance

Asia Country Awards.

ICICI Bank received the "Dataquest Technology Innovation Awards 2012" for

Data centre migration by Dataquest.

ICICI Bank was conferred the Best Performance Award for Self Help Group

(SHG) Bank Linkage Programme in NABARD's State Level Awards announced by their

Maharashtra Regional Office. The Bank received the first prize for the year 2010-11 in
the Private Sector Bank category and 2nd runner up for the year 2011-12 in the
Commercial Bank category.

For the second consecutive year, ICICI Bank won the NPCI's NFS Operational

Excellence Awards in the MNC and Private Sector Banks Category for its ATM
network.

Mr.K.V.Kamath was awarded the "Hall Of Fame" by Outlook Money for his long

standing contribution in the financial services sector.

ICICI Bank won the Best Bank - India Award by The Banker.

Ms. Chanda Kochhar ranked 18th in the Fortune's list of '2012 Businesspersons of

the Year'. The 50 global leaders is Fortune's annual ranking of leaders who are "the best
in business".

Ms. Chanda Kochhar tops the list of "50 Most Powerful Women in Business" by

Fortune India.

ICICI Bank tops the list of "Private sector and Foreign Banks" by Brand Equity,

Most Trusted Brands 2012. It ranks 15th in the "Top Service 50 Brands".

For the third consecutive year, ICICI Bank ranked second in "India's 50 Biggest

Financial Companies" in The BW Real 500 by Businessworld.

For the second year in a row, Ms. Chanda Kochhar, Managing Director & CEO

was ranked 5th in the International list of 50 Most Powerful Women In Business by
Fortune.

ICICI Bank tops the list of most fans in India and globally ranks fifth amongst

financial institutions on Facebook in the social media engagement study conducted by

Ketchum Sampark.

ICICI Bank in the Private Sector Bank category won the Best Technology Bank Of

The Year, Best Financial Inclusion Initiative and Best Use Of Technology In Training
and e-Learning by Indian Bank's Association (IBA) Technology Awards. The Bank also
received the first runner up for Best Online Bank, Best Customer Relationship Initiative
and Best Use Of Mobility Technology in Banking by IBA Technology Awards .

ICICI Bank awarded the Best SME Bank for Treasury and Working Capital (India)

by The Asset Triple A.

ICICI Bank received the Best Trade Finance House and Best Cash Management

House by The Corporate Treasurer Alliance Country Awards.

ICICI Bank awarded the Best Private Sector Bank in Global Business

Development, Rural Reach and SME financing categories by Dun & Bradstreet - Polaris
Financial Technology Banking Awards.
2013

ICICI Bank awarded the Most Admired Infrastructure Debt Financer and PPP

Project of the Year: Yamuna Expressway Project, in the 5th KPMG Infrastructure Today
Awards by ASAPP Media Information Group

ICICI Bank Limited has been conferred the Best Remittance Business award at

The Asian Banker's International Excellence in Retail Financial Services 2013 Awards
ceremony.

ICICI Bank was honored with the Medici Innovation Hall of Fame Award,

instituted by The Medici Institute in collaboration with the Medici Group, USA.

ICICI Bank and its IT partner Fundtech won The Asian Banker Technology

Implementation Award for the Convergence Banking project from Asian Banker.

Ms. Chanda Kochhar, MD & CEO, was ranked as the most powerful business

woman in India in Forbes' list of 'The World's 100 Most Powerful Women 2013'.

Ms. Chanda Kochhar, MD & CEO, was also featured in the Power List 2013 of 25

most powerful women in Inda by India Today, for the third year in a row.

ICICI Bank won an award under the Social Media category at the

InformationWeek EDGE Award

Table showing Shareholding pattern of ICICI Bank

Shareholders

Shareholding

Mutual fund and UTI II

7.76

Deutsche Bank Trust Co.

29.16

Insurance Co.

16.71

Individuals

5.12

Banks, Financial Institutions and UTI - I

0.03

Bodies corporate

2.5

FII,NRI, Foreign Banks, Foreign Co.

38.52

Shareholding
MUTUAL FUND AND UTI II
DEUTSCHE BANK TRUST
CO.
INSURANCE COMPANIES
INDIVIDUALS
BANKS,FINANCIAL
INSTITUTUIONS AND UTI
BODIES CORPORATE

Chart showing Shareholding pattern of ICICI Bank

BANK OF BARODA
Type

Public

Traded as

BSE: 532134

Industry

Banking, Financial services

Founded

20 July 1908

Founder

Maharaja Sayajirao Gaekwad[1]

Headquarters

Vadodara (Baroda), Gujarat,India

Area served

Worldwide

Key people

(Chairman & MD)Shri Ranjan Dhawan

Products

Credit cards, consumer banking, corporate

banking,finance and insurance,investment
banking, mortgage loans, private
banking, private equity, wealth
management

Owner

Government of India

Website

www.bankofbaroda.com

Bank of Baroda (BoB) is an Indian state-owned banking and financial services company
headquartered in Baroda, or Vadodara. It offers a range of banking products and
financial services to corporate and retail customers through its branches and through its
specialised subsidiaries and affiliates in the areas of retail banking, investment banking,
credit cards, and asset management. Its total global business was 8,021 billion as of 31
March 2013, making it the second largest Bank in India after State Bank of India. In
addition to its headquarters in its home state of Gujarat, it has a corporate headquarters in
the Bandra Kurla Complex in Mumbai.

Based on 2012 data, it is ranked 715 on Forbes Global 2000 list. BoB has total assets in
excess of 3.58 trillion (short scale), 3,583 billion (long scale), a network of 4283
branches (out of which 4172 branches are in India) and offices, and over 2000 ATMs.
The bank was founded by the Maharaja of Baroda, H. H. Sir Sayajirao Gaekwad III on
20 July 1908 in the Princely State of Baroda, in Gujarat. The bank, along with 13 other
major commercial banks of India, was nationalised on 19 July 1969, by the Government
of India and has been designated as a profit-making public sector undertaking (PSU).
Bank of Baroda is one of the Big Four banks of India, along with State Bank of India,
ICICI Bank and Punjab National Bank.

History
19081959
In 1908, Maharaja Sayajirao Gaekwad III, one of the knights of the Maratha Kingdom,
set up the Bank of Baroda (BoB). with other stalwarts of industry such as Sampatrao
Gaekwad, Ralph Whitenack, Vithaldas Thakersey, Tulsidas Kilachand and NM Chokshi.
Two years later, BoB established its first branch in Ahmedabad. The bank grew
domestically, until after World War II. Then in 1953 it crossed the Indian Ocean to serve
the communities of Indians in Kenya and Indians in Uganda by establishing a branch
each in Mombasa and Kampala. The next year it opened a second branch in Kenya, in
Nairobi, and in 1956 it opened a branch in Dar-es-Salaam. Then in 1957 BoB took a
giant step abroad by establishing a branch in London. London was the center of the
British Commonwealth and the most important international banking center. 1959 saw
BoB complete its first domestic acquisition when it took over Hind Bank.
1960s
In 1961, BoB merged in New Citizen Bank of India. This merger helped it increase its
branch network in Maharashtra. BoB also opened a branch in Fiji. The next year it
opened a branch in Mauritius. Bank of Baroda In 1963, BoB acquired Surat Banking
Corporation in Surat, Gujarat. The next year BoB acquired two banks: Umbergaon
Peoples Bank in southern Gujarat and Tamil Nadu Central Bank in Tamil Nadu state.
In 1965, BoB opened a branch in Guyana. That same year BoB lost its branch in
Narayanjanj (East Pakistan) due to the Indo-Pakistani War of 1965. It is unclear when
BoB had opened the branch. In 1967 it suffered a second loss of branches when the
Tanzanian government nationalised BoBs three branches there (Dar es Salaam,

Mwanga, and Moshi), and transferred their operations to the Tanzanian governmentowned National Banking Corporation.
In 1969 the Indian government nationalised 14 top banks, including BoB. BoB
incorporated its operations in Uganda as a 51% subsidiary, with the government owning
the rest.
1972s
In 1972, BoB acquired Bank of Indias operations in Uganda. Two years later, BoB
opened a branch each in Dubai and Abu Dhabi.
Back in India, in 1975, BoB acquired the majority shareholding and management control
of Bareilly Corporation Bank (est. 1928) and Nainital Bank (est. in 1954), both in Uttar
Pradesh. Since then, Nainital Bank has expanded to Uttarakhand state.
International expansion continued in 1976 with the opening of a branch in Oman and
another in Brussels. The Brussels branch was aimed at Indian firms from Mumbai
(Bombay) engaged in diamond cutting and jewellery having business in Antwerp, a
major center for diamond cutting.
Two years later, BoB opened a branch in New York and another in the Seychelles. Then
in 1979, BoB opened a branch in Nassau, the Bahamas.
1980s
In 1980, BoB opened a branch in Bahrain and a representative office in Sydney,
Australia. BoB, Union Bank of India and Indian Bank established IUB International
Finance, a licensed deposit taker, in Hong Kong. Each of the three banks took an equal
share. Eventually (in 1998), BoB would buy out its partners.
A second consortium or joint-ventrue bank followed in 1985. BoB (20%), Bank of India
(20%), Central Bank of India (20%) and ZIMCO (Zambian government; 40%)
established Indo-Zambia Bank in Lusaka. That same year BoB also opened an Offshore
Banking Unit (OBU) in Bahrain.
Back in India, in 1988, BoB acquired Traders Bank, which had a network of 34 branches
in Delhi.
1990s
In 1990, BoB opened an OBU in Mauritius, but closed its representative office in
Sydney. The next year BoB took over the London branches of Union Bank of India and
Punjab & Sind Bank (P&S). P&Ss branch had been established before 1970 and Union
Banks after 1980. The Reserve Bank of India ordered the takeover of the two following
the banks' involvement in the Sethia fraud in 1987 and subsequent losses.

Then in 1992 BoB incorporated its operations in Kenya into a local subsidiary with a
small tranche of shares quoted on the Nairobi Stock Exchange. The next year, BoB
closed its OBU in Bahrain.
In 1996, BoB Bank entered the capital market in December with an Initial Public
Offering (IPO). The Government of India is still the largest shareholder, owning 66% of
the bank's equity.
In 1997, BoB opened a branch in Durban. The next year BoB bought out its partners in
IUB International Finance in Hong Kong. Apparently this was a response to regulatory
changes following Hong Kongs reversion to the Peoples Republic of China. The now
wholly owned subsidiary became Bank of Baroda (Hong Kong), a restricted license
bank. BoB also acquired Punjab Cooperative Bank in a rescue. BoB incorporate wholly
owned subsidiary BOB Capital Markets Ltd. for broking business.
In 1999, BoB merged in Bareilly Corporation Bank in another rescue. At the time,
Bareilly had 64 branches, including four in Delhi. In Guyana, BoB incorporated its
branch as a subsidiary, Bank of Baroda Guyana. BoB added a branch in Mauritius and
closed its Harrow Branch in London.
2000s

2000: BoB established Bank of Baroda (Botswana).

2002: BoB acquired Benares State Bank (BSB) at the Reserve Bank of Indias

request. BSB was established in 1946 but traced its origins back to 1871 and its function
as the treasury office of the Benares state. In 1964, BSB had acquired Bareilly Bank (est.
1934), with seven branches; it also had taken over Lucknow Bank in 1968. The
acquisition of BSB brought BoB 105 new branches.

2002: Bank of Baroda (Uganda) was listed on the Uganda Securities Exchange

(USE).

2003: BoB opened an OBU in Mumbai.

2004: BoB acquired the failed Gujarat Local Area Bank, and returned to Tanzania

by establishing a subsidiary in Dar-es-Salaam. BoB also opened a representative office

each in Kuala Lumpur, Malaysia, and Guangdong, China.

2005: BoB built a Global Data Centre (DC) in Mumbai for running its centralised

banking solution (CBS) and other applications in more than 1,900 branches across India
and 20 other counties where the bank operates. BoB also opened a representative office
in Thailand.

2006: BoB established an Offshrore Banking Unit (OBU) in Singapore.

2007: In its centenary year, BoBs total business crossed 2.09 trillion (short scale),

its branches crossed 2000, and its global customer base 29 million people.

2008: BoB opened a branch in Guangzhou, China (02/08/2008) and in Kenton,

Harrow United Kingdom. BoB opened a joint venture life insurance company with
Andhra Bank and Legal and General (UK) called IndiaFirst Life Insurance Company.
2010s
In 2010, Malaysia awarded a commercial banking licence to a locally incorporated bank
to be jointly owned by Bank of Baroda, Indian Overseas Bank and Andhra Bank. That
same year, BoB also opened a branch in New Zealand.
In 2011, BoB opened an Electronic Banking Service Unit (EBSU) was opened at
Hamriya Free Zone, Sharjah (UAE). It also opened four new branches in existing
operations in Uganda, Kenya (2), and Guyana. BoB closed its representative office in
Malaysia in anticipation of the opening of its consortium bank there. BoB received In
Principle approval for the upgrading of its representative office in Australia to a branch.
The Malaysian consortium bank, India International Bank Malaysia (IIBM), finally
opened in Kuala Lumpur, which has a large population of Indians. BOB owns 40%,
Andhra Bank owns 25%, and IOB the remaining 35% of the share capital. IIBM seeks to
open five branches within its first year of operations in Malaysia, and intends to grow to
15 branches within the next three years.

Subsidiaries
BOB Capital Markets (BOBCAPS) is a SEBI-registered investment banking company
based in Mumbai, Maharashtra. It is a wholly owned subsidiary of Bank of Baroda. Its
financial services portfolio includes Initial Public Offerings, private placement of debts,
corporate restructuring, business valuation, mergers and acquisition, project appraisal,
loan syndication, institutional equity research, and brokerage.

International presence
In its international expansion, the Bank of Baroda followed the Indian diaspora,
especially that of Gujaratis. The Bank has 100 branches/offices in 24 countries including
61 branches/offices of the bank, 38 branches of its 8 subsidiaries and 2 representative
offices in Thailand and Australia. The Bank of Baroda has a joint venture in Zambia with
16 branches.

Among the Bank of Barodas overseas branches are ones in the worlds major financial
centres (e.g., New York, London, Dubai, Hong Kong, Brussels and Singapore), as well
as a number in other countries. The bank is engaged in retail banking via the branches of
subsidiaries in Botswana, Guyana, Kenya, Tanzania, and Uganda. The bank plans to
upgrade its representative office in Australia to a branch and set up a joint venture
commercial bank in Malaysia. It has a large presence in Mauritius with about nine
branches spread out in the country.
The Bank of Baroda has received permission or in-principle approval from host country
regulators to open new offices in Trinidad and Tobago and Ghana, where it seeks to
establish joint ventures or subsidiaries. The bank has received Reserve Bank of India
approval to open offices in the Maldives, and New Zealand. It is seeking approval for
operations in Bahrain, South Africa, Kuwait, Mozambique, and Qatar, and is establishing
offices in Canada, New Zealand, Sri Lanka, Bahrain, Saudi Arabia, and Russia. It also
has plans to extend its existing operations in the United Kingdom, the United Arab
Emirates, and Botswana.
The tagline of Bank of Baroda is "India's International Bank".

Affiliates
IndiaFirst Life Insurance Company is a joint venture between Bank of Baroda (44%) and
fellow Indian state-owned bank Andhra Bank (30%), and UKs financial and investment
company Legal & General (26%). It was incorporated in November, 2009 and has its
headquarters in Mumbai. The company started strongly, achieving a turnover in excess
of 2 billion in its first four and half month.
Baroda Manipal postgraduate diploma in banking and finance
Bank of Baroda and Manipal University have established the Baroda Manipal School of
Banking, which offers a Postgraduate Diploma in Banking & Finance (PGDBF) from
Manipal University. The duration of the course is just one year, after which, successful
graduates will join Bank of Baroda as management trainees.
Bank of Baroda financials 2012

Sales 24,695 crores

Profits 5,006 crores

Assets 3,58,397 crore

Table showing Shareholding pattern of Bank of Baroda

Shareholders

Shareholding

Promoters

54.31

Individuals

4.77

Institutions

20.5

FII

13.54

Govt.

Others

6.88

Shareholding
MUTUAL FUND AND UTI II
DEUTSCHE BANK TRUST
CO.
INSURANCE COMPANIES
INDIVIDUALS
BANKS,FINANCIAL
INSTITUTUIONS AND UTI
BODIES CORPORATE

Chart showing shareholding pattern of Bank of Baroda

AXIS BANK
Industry

Banking, Financial services

Founded

1990 (as UTI Bank)

Headquarters

Mumbai, Maharashtra, India[1]

Key people

(Chairman)
Shikha Sharma (MD & CEO)

Products

Credit cards, consumer banking, corporate

banking,finance and insurance,investment
banking, mortgage loans, private
banking, private equity, wealth
management

Revenue

340 billion (US$5.4 billion) (2012)[2][3]

Operating

94 billion (US$1.5 billion) (2012)[2][3]

income

Net income

52 billion (US$830 million) (2012)[2][3]

Total assets

3.4 trillion (US$54 billion) (2012)[2][3]

Number of

42,420 (on 31-March-2014)[4]

employees

Website

www.axisbank.com

Axis Bank Limited (BSE: 532215, LSE: AXBC) is the third largest private sector bank
in India. It offers the entire spectrum of financial services to customer segments covering
Large and Mid-Corporates, MSME, Agriculture and Retail Businesses. Axis Bank has its
headquarters in Mumbai, Maharashtra.
Axis Bank began its operations in 1994, after the Government of India allowed new
private banks to be established. The Bank was promoted jointly by the Administrator of

the Unit Trust of India (UTI-I), Life Insurance Corporation of India (LIC), General
Insurance Corporation Ltd., National Insurance Company Ltd., The New India
Assurance Company, The Oriental Insurance Corporation and United India Insurance
Company. The Unit Trust of India holds a special position in the Indian capital markets
and has promoted many leading financial institutions in the country. As on the year
ended 31st March 2013, Axis Bank had an operating revenue of 16,217 crores and a net
profit of 5,179 crores.

Axis Bank (erstwhile UTI Bank) opened its registered office in Ahmedabad and
corporate office in Mumbai in December 1993. The first branch was inaugurated in April
1994 in Ahmedabad by Dr. Manmohan Singh, then the Honorable Finance Minister. The
Bank, as on 31st March 2013, is capitalised to the extent of Rest. 467.95 crores with the
public holding (other than promoters and GDRs) at 54.08%. . New Zealand born Richard
Chandler owns about 9.5% share through Orient Global.
On 14th March 2013 an online magazine named Cobrapost.com released video footage
from Operation Red Spider purporting to show a few employees of several Indian banks
including Axis bank apparently willing to help customers to avoid paying taxes. After
this, The government of India and Reserve Bank of India have ordered an inquiry.

Network
The Bank's Registered Office is situated in Ahmedabad and its Central Office is located
at Mumbai. The Bank has an extensive network of 2225 branches and extension counters
(as on 30th September 2013). The Bank has a network of 11796 ATMs (as on 30th
September 2013)[23] Axis Bank operates one of the worlds highest ATM sites at Thegu,
Sikkim at a height of 4023.4 metres (13,200 ft) above sea level, and has the largest ATM
network among private banks in India.

International Business
The Bank has seven international offices with branches at Singapore, Hong Kong, Dubai
(at the DIFC) and Colombo and representative offices at Shanghai, Dubai and Abu
Dhabi, which focus on corporate lending, trade finance, syndication, investment banking
and liability businesses. In addition to the above, the Bank has a presence in UK with its
wholly owned subsidiary Axis Bank UK Limited.

Business focus
Axis Bank operates in four segments: corporate/wholesale banking, and other banking
business.
Treasury operations
The Banks treasury operation services include investments in sovereign and corporate
debt, equity and mutual funds, trading operations, derivative trading and foreign
exchange operations on the account, and for customers and central funding.
Retail banking
In the retail banking category, the bank offers services such as lending to
individuals/small businesses subject to the orientation, product and granularity criterion,
along with liability products, card services, Internet banking, automated teller machines
(ATM ) services, depository, financial advisory services, and nonresident Indian (NRI)
services.
Corporate/wholesale banking
The Bank offers to corporate and other organisations services including corporate
relationship not included under retail banking, corporate advisory services, placements
and syndication, management of public issues, project appraisals, capital market related
services and cash management services.
Industry First Initiative
Axis Bank, India's third largest private sector bank launched Mobile Banking App 2.0 for
its retail resident Indian customers The first of its kind in India, Axis Mobile 2.0 offers a
high level of personalization. The App has been launched in partnership with Tagit, a
leading Singapore mobile solutions company. The new application uses Tagit's mobility
solution platform that enables Banking on-the-go.
Axis Bank- ISIC Forex Card for Students would be the first photo Travel Currency
Card available in USD, Euro, GBP and AUD currencies. Axis Bank is the 1st Bank in
India to launch ISIC co- branded Forex prepaid card for students.
Axis Bank partners with Visa to launch industry first eKYC facility , 1st organization
in India to introduce biometric based eKYC offering convenience, speed & ease to
Aadhaar-registered individuals to open bank accounts

International branches

Singapore

Hong Kong

Dubai

Shanghai

Abu Dhabi

Moscow

colombo

UK- london

NRI services
Products and services for NRIs that facilitate investments in India.
Business banking
The Bank accepts income and other direct taxes through its 214 authorised branches at
137 locations and central excise and service taxes (including e-Payments) through 56
authorised branches at 14 locations.
Investment banking
Banks Investment Banking business comprises activities related to Equity Capital
Markets, Mergers and Acquisitions and Private Equity Advisory. The bank is a SEBIregistered Category I Merchant Banker and has been active in advising Indian companies
in raising equity through IPOs, QIPs, and Rights Issues etc. During the financial year
ended 31 March 2012, Axis Bank undertook 9 transactions including 5 IPOs and 2 Open
Offers.
Lending to small and medium enterprises
Axis Bank SME business is segmented in three groups: Small Enterprises, Medium
Enterprises and Supply Chain Finance. Under the Small Business Group a subgroup for
financing micro enterprises is also set up. Axis bank is the 1st Indian Bank having TCDC
cards in 11 currencies.
The Business Gaurav SME Awards
In 201112, Axis Bank set up 6 SME centres and SME cells each across the country,
taking the total number to 32 SME Centres. The Bank also organised the Business
Gaurav SME Awards in association with Dun & Bradstreet to recognise and award
achievements in the SME space.
Agriculture
401 branches of the Bank have dedicated officers for providing agricultural loans to
farmers.

Financial inclusion
Till March 2012, the Bank had opened over 4.4 million No Frills accounts in over 7607
villages through a network of 15 Business Correspondents and nearly 6000 customer
service points. Axis Bank has a strong presence in Electronic Benefit Transfer (EBT) and
has covered 6800 villages across 19 districts and 9 states till date with over 3.7 million
beneficiaries.
International banking
Axis Bank has a foreign network of four branches (Singapore, Hong Kong, DIFC
(Dubai) and Colombo (Sri Lanka) and three representative offices (Shanghai, Dubai and
Abu Dhabi) with presence in 6 countries. Axis Bank was granted a banking license in
Britain, after receiving approval in April 2013 from Britain's financial regulator to
provide a full range of banking services including deposit-taking and making loans and
investments. It opened its first UK bank in London on 12 July 2013.
Awards and recognitions
In year 201213
Bank of the Year Money Today FPCIL Awards 201213 Best Bank CNBC-TV18
Indias Best Bank and Financial Institution Awards 2012 Best Bank Runner Up
Outlook Money Awards 2012 Consistent Performer Indias Best Banks 2012 Survey
by Business Today & KPMG Fastest Growing Large Bank Dun & Bradstreet Polaris
Financial

Technology Banking

Awards

2012

Fastest

Growing

Large

Bank

Businessworld Best Banks Survey 2012 Best Domestic Bond House The Asset Triple A
Country Awards 2012 Our Bank has been honored with this award for the third year in
a row India Bond House of the year IFR ASIA Country Awards 2012 Deal Maker of
the Year in Rupee Bonds Businessworld Magna Awards India's Best Deal Makers
2012 The Best Emerging Bullion Dealing Bank 9th India International Gold Convention2011-12 Best Acquiring Institution in South Asia Visa LEADER Award at Visas 2012
APCEMEA Security Summit, Bali Gold Shield for Excellence in Financial Reporting in
the Private Banks category 201112 ICAI (Institute of Chartered Accountants of India)
AXIS Bank Corporate Office
The Axis Bank Corporate Office in Mumbai received the Platinum rating by the US
Green Building Council for its environment friendly facilities and reduction of carbon
emission.
Board of directors
1.

Chairman Sanjiv Misra

2.

MD and CEO Shikha Sharma

Corporate social responsibility

Axis Bank has set up a Trust the Axis Bank Foundation, which contributes up to 1
percent of its net profit annually to various social initiatives undertaken by the
foundation. During the year 201112, the foundation has partnered with 36 NGOs for
educating over a lakh underprivileged and special kids in 13 states. The recycling
initiative under the Green Banking banner has helped the bank productively use around
21572 kilograms of dry waste during the year.
Education foundation
The Axis Bank Foundation was founded in 2006 and supports supplementary education.
Table showing Shareholding pattern of Axis Bank

Shareholders

Shareholding

Promoters

37.38

Individuals

5.79

Institutions

13.4

FII

32.94

Govt.

Others

10.49

Shareholding
MUTUAL FUND AND UTI - II
DEUTSCHE BANK TRUST CO.
INSURANCE COMPANIES
INDIVIDUALS
BANKS,FINANCIAL
INSTITUTUIONS AND UTI

Chart showingShareholding pattern of Axis

ECONOMY ANALYSIS
India is set to emerge as the worlds fastest-growing major economy by 2015 ahead of China,
as per the recent report by The World Bank. Indias Gross Domestic Product (GDP) is
expected to grow at 7.5 per cent in 2015, as per the report.
The improvement in Indias economic fundamentals has accelerated in the year 2015 with the
combined impact of strong government reforms, RBI's inflation focus supported by benign
global commodity prices.
The independence-era Indian economy (from 1947 to 1991) was based on a mixed
economy combining features of capitalism and socialism, resulting in an inward-looking,
interventionist policies and import-substituting economy that failed to take advantage of
the post-war expansion of trade. This model contributed to widespread inefficiencies and
corruption, and the failings of this system were due largely to its poor implementation.
In 1991, India adopted liberal and free-market principles and liberalised its economy to
international trade under the guidance of Former Finance minister Manmohan Singh under
the Prime Ministry of P.V. Narasimha Rao, prime minister from 1991 to 1996, who had
eliminated Licence Raj, a pre- and post-British era mechanism of strict government
controls on setting up new industry. Following these major economic reforms, and a
strong focus on developing national infrastructure such as the Golden Quadrilateral project
by former Prime Minister Atal Bihari Vajpayee, the country's economic growth progressed
at a rapid pace, with relatively large increases in per-capita incomes. The south western
state of Maharashtra contributes the highest towards India's GDP among all states.
Mumbai (Maharashtra) is known as the trade and commerce capital of India.

INDIA GDP

The Gross Domestic Product (GDP) in India was worth 2066.90 billion US dollars in 2014.
The GDP value of India represents 3.33 percent of the world economy. GDP in India
averaged 552.24 USD Billion from 1970 until 2014, reaching an all time high of 2066.90
USD Billion in 2014 and a record low of 63.50 USD Billion in 1970. GDP in India is
reported by the World Bank Group.

INDIA INTREST RATE

The Indian interest rate this often refers to the repo rate, also called the key short term
lending rate. If banks are short of funds they can borrow rupees from the Reserve Bank
of India (RBI) at the repo rate, the interest rate with a 1 day maturity. If the central bank
of India wants to put more money into circulation, then the RBI will lower the repo rate.
The reverse repo rate is the interest rate that banks receive if they deposit money with the
central bank. This reverse repo rate is always lower than the repo rate. Increases or
decreases in the repo and reverse repo rate have an effect on the interest rate on banking
products such as loans, mortgages and savings.

Graph Indian interest rate RBI - long-term graph

The current Indian interest rate RBI (base rate) is 7.250 %

INDIA INFLATION RATE

The annualised inflation rate in India is 6.46% as of September 2014, as per the Indian
Ministry of Statistics and Programme Implementation. This represents a modest reduction
from the previous annual figure of 9.6% for June 2011. Inflation rates in India are usually
quoted as changes in the Wholesale Price Index, for all commodities.
Many developing countries use changes in the Consumer Price Index (CPI) as their central
measure of inflation. India used WPI as the measure for inflation but new CPI(combined) is
declared as the new standard for measuring inflation ( April 2014) [[1]] CPI numbers are
typically measured monthly, and with a significant lag, making them unsuitable for policy
use. Instead, India uses changes in the Wholesale Price Index (WPI) to measure its rate of
inflation.
Provisional annual inflation rate based on all India general CPI (Combined) for November
2013 on point to point basis (November 2013 over November 2012) is 11.24% as compared
to 10.17% (final) for the previous month of October 2013. The corresponding provisional
inflation rates for rural and urban areas for November 2013 are 11.74% and 10.53%
respectively. Inflation rates (final) for rural and urban areas for October 2013 are 10.19% and
10.20% respectively.[2]
The WPI measures the price of a representative basket of wholesale goods. In India, this
basket is composed of three groups: Primary Articles (20.1% of total weight), Fuel and Power
(14.9%) and Manufactured Products (65%). Food Articles from the Primary Articles Group
account for 14.3% of the total weight. The most important components of the Manufactured
Products Group are Chemicals and Chemical products (12%); Basic Metals, Alloys and
Metal Products (10.8%); Machinery and Machine Tools (8.9%); Textiles (7.3%) and
Transport, Equipment and Parts (5.2%)

BANK RATES
Repo (Repurchase) Rate
Repo rate is the rate at which banks borrow funds from the RBI to meet the gap between the
demand they are facing for money (loans) and how much they have on hand to lend.
If the RBI wants to make it more expensive for the banks to borrow money, it increases the
repo rate; similarly, if it wants to make it cheaper for banks to borrow money, it reduces the
repo rate.
Reverse Repo Rate
This is the exact opposite of repo rate.
The rate at which RBI borrows money from the banks (or banks lend money to the RBI) is
termed the reverse repo rate. The RBI uses this tool when it feels there is too much money
floating in the banking system
If the reverse repo rate is increased, it means the RBI will borrow money from the bank and
offer them a lucrative rate of interest. As a result, banks would prefer to keep their money

with the RBI (which is absolutely risk free) instead of lending it out (this option comes with a
certain amount of risk)
Consequently, banks would have lesser funds to lend to their customers. This helps stem the
flow of excess money into the economy
Reverse repo rate signifies the rate at which the central bank absorbs liquidity from the
banks, while repo signifies the rate at which liquidity is injected.
Bank Rate
This is the rate at which RBI lends money to other banks (or financial institutions .
The bank rate signals the central banks long-term outlook on interest rates. If the bank rate
moves up, long-term interest rates also tend to move up, and vice-versa.
Banks make a profit by borrowing at a lower rate and lending the same funds at a higher rate
of interest. If the RBI hikes the bank rate (this is currently 6 per cent), the interest that a bank
pays for borrowing money (banks borrow money either from each other or from the RBI)
increases. It, in turn, hikes its own lending rates to ensure it continues to make a profit.
Call Rate
Call rate is the interest rate paid by the banks for lending and borrowing for daily fund
requirement. Si nce banks need funds on a daily basis, they lend to and borrow from other
banks according to their daily or short-term requirements on a regular basis.
CRR
Also called the cash reserve ratio, refers to a portion of deposits (as cash) which banks have
to keep/maintain with the RBI. This serves two purposes. It ensures that a portion of bank
deposits is totally risk-free and secondly it enables that RBI control liquidity in the system,
and thereby, inflation by tying their hands in lending money
SLR
Besides the CRR, banks are required to invest a portion of their deposits in government
securities as a part of their statutory liquidity ratio (SLR) requirements. What SLR does is
again restrict the banks leverage in pumping more money into the economy.
MSF rate is the rate at which banks borrow funds overnight from the Reserve Bank of India
(RBI) against approved government securities.

1. BankRate

2. CashReserveRatio

(CRR)

3. StatutoryLiquidityRatio
4. RepoRate
5. ReverseRepoRate
6. MarginalStandingFacility

8.25 %
-4

(SLR) (RR) -

21.5
7.25

(RRR) (MSF) -

%
%
%

6.25
8.25

%
%

STATE BANK OF INDIA

WORKING NOTE FOR THE COMPUTATION OF INTRINSIC VALUE
Table showing Payout ratio (DPS / EPS) of SBI

YEAR

2010

2011

2012

2013

2014

DPS

3.5

3.5

4.15

EPS

144.37

116.67

174.46

206.2

145.88

PAYOUT

0.02424

0.02571

0.02006

0.02013

0.02056

Average Dividend Payout Raito (ADPR)

= 0.02424+0.02571+0.02006+0.02012+0.02056
5
= 0.0221
Average Retention Ratio

= 1 - (ADPR)
= 1 - 0.02214
= 0.9778

Table showing Return on equity (NP/ Networth) of SBI

Year

2010

2011

2012

2013

2014

net

9166.05

7370.35

11707.3

14105

10891.17

networth

65949.2

64980

83951.2

98883.7

118282.3

ROE

0.13899

0.11342

0.13945

0.14264

0.09208

profit

Average ROE = 0.13899+0.1134+0.13945+0.142640.09208

5
= 62658

= 0.12531

5
Price Earning Ratio= (Market price/ EPS)
Table showing High Price Earning Ratio of SBI
YEAR

2010

2011

2012

2013

2014

MARKET

2318.9

2960.1

2349.7

2360

2124.9

EPS

144.37

116.67

174.46

206.2

145.88

HPER

16.06

25.37

13.47

11.45

14.57

PRICE

Average High PE Ratio = 16.06+25.37+13.46+11.45+14.57

5
= 16.1826

Table showing Low Price Earning Ratio

YEAR

2010

2011

2012

2013

2014

MARKET

2012

2705.1

2090.05

1976.1

1867.5

EPS

144.37

116.67

174.46

206.2

145.88

LPER

13.94

23.19

11.98

9.58

12.80

PRICE

Average Low PE Ratio =

13.94+23.19+11.98+9.58+12.80
5

= 14.2974

NORMALISED PRICE EARNING RATIO

Average High PE Ratio

=16.1826

Average Low PE Ratio

=14.2974

Normalised Price Earning Ratio

= 16.1826 + 14.2974
2
= 15.24

GROWTH RATE (ARR AROE)

Growth Rate

ARR AROE

= 0.9778 0.12531
= 0.12252

PROJECTED EPS
Projected EPS = Current year EPS (1+growth rate)

= 145.88 (0.12252+1)
= 163.7532
INTRINSIC VALUE (PROJECTED EPS X NORMALIZED AVERAGE PE
RATIO)

Projected EPS

= 163.7532

Normalized PE Ratio

=15.24

Intrinsic Value

= 163.7532 15.44
= 2495.5987

Table showing INTRINSIC VALUE of SBI

Average Return On Equity (ROE)

0.12531

Normalized Average PE Ratio

15.24

Average Dividend Payout Ratio (DPOR)

0.0221

Average Retention Ratio

0.977

Long Term Growth Rate

0.12252

Projected EPS

163.753

Intrinsic Value

2495.5987

Intrinsic
value

Market value

2495.59

2124.9

Intrinsic Value > Market value

Interpretation: SBI has a higher intrinsic value than its market value, that is, it is
undervalued, so it is preferable to buy the stocks as the current market value would have
a tendency to increase to its intrinsic value.

YES BANK
WORKING NOTE FOR THE COMPUTATION OF INTRINSIC VALUE
Table showing payout ratio (DPS / EPS) of Yes Bank

YEAR

2010

2011

2012

2013

2014

DPS

0.15

0.25

0.4

0.6

0.8

EPS

14.06

20.95

27.68

36.27

44.86

PAYOUT

0.0107

0.0119

0.0145

0.0165

0.0178

Average Dividend Payout Raito (ADPR)

ADPR

= 0+0.0107+0.0119+0.0145+0.165+0.0178
5
= 0.01428

Average Retention Ratio

= 1-(ADPR)
= 1-0.01428

ARR

= 0.98572

Table showing RETURN ON EQUITY (NP/NETWORTH) OF YES BANK

YEAR

2010

2011

2012

2013

2014

NETPROFIT

477.74

727.14

977.06

1300.68

1617.78

NEWORTH

3089.6

3794.8

4676.64

5807.67

7121.74

ROE

0.1546

0.1916

0.2089

0.2240

0.2272

Average ROE

0.1546+0.1916+0.2089+0.224+0.2272
5

= 0.2012

PRICE EARNING RATIO (MARKET PRICE/ EPS)

Table showing HIGH PRICE EARNING RATIO OF YES BANK
YEAR

2010

2011

2012

2013

2014

MARKET

298

341.1

380.9

509

474.9

EPS

14.06

20.95

27.68

36.27

44.86

HPER

21.19

16.28

13.76

14.03

10.59

PRICE

Average High PE Ratio = 21.19+16.28+13.76+14.03+10.59

5
=15.1714

Table showing LOW PRICE EARNING RATIO OF YES BANK

YEAR

2010

2011

2012

2013

2014

MARKET

245

302.4

345.5

416.75

404

EPS

14.06

20.95

27.68

36.27

44.86

LPER

17.425

14.434

12.482

11.490

9.006

PRICE

Average Low PE Ratio =

17.425+14.4344+12.482+11.49+9.006
5

= 12.9675
NORMALISED PRICE EARNING RATIO
Average High PE Ratio

= 15.1714

Average Low PE Ratio

= 12.9675

Normalised Price Earning Ratio

= 15.1714+ 12.9675
2
= 14.069

GROWTH RATE (ARR AROE)

Growth Rate

ARR AROE

0.98572 0.2012

0.19832

PROJECTED EPS
Projected EPS

= Current year EPS (1+growth rate)

= 44.86 (1+0.19832)
= 53.756

INTRINSIC VALUE (PROJECTED EPS X NORMALIZED AVERAGE PE

RATIO)

Projected EPS

= 53.756

Normalized PE Ratio

=14.069

Intrinsic Value

= 53.756 14.069
= 756.293

Table showing INTRINSIC VALUE of Yes Bank

Average Return On Equity (ROE)

0.2012

Normalized Average PE Ratio

14.069

Average

Dividend

Payout

0.01428

Ratio

(DPOR)
Average Retention Ratio

0.98572

Long Term Growth Rate

0.19832

Projected EPS

53.756

Intrinsic Value

756.293

Intrinsic
value

Market value

756.29

474.9

Intrinsic Value > Market value

Interpretation: YES Bank has a higher intrinsic value than its market value, that is, it is
undervalued, so it is preferable to buy the stocks of Yes bank as the current market value
would have a tendency to rise to its intrinsic value.

ICICI BANK
WORKING NOTE FOR THE COMPUTATION OF INTRINSIC VALUE
Table showing PAYOUT RATIO (DPS / EPS) of ICICI
YEAR

2010

2011

2012

2013

2014

DPS

1.2

1.4

1.65

2.3

EPS

36.1

44.73

56.09

72.17

84.95

PAYOUT

0.0332

0.0313

0.0294

0.0277

0.0271

Average Dividend Payout Raito(ADPR)

= 0.0332+0.0313+0.0294+0.0277+0.0271
5
= 0.0297
Average Retention Ratio

= 1-(ADPR)
= 1-0.0297
= 0.970

Table showing RETURN ON EQUITY (NP/NETWORTH) OF ICICI

YEAR

2010

2011

2012

2013

2014

NETPROFIT

4024.98

5151.38

6465.26

8325.47

9810.48

NETWORTH

51618.4

55090.93

60405.25

66705.9

73213.32

ROE

0.078

0.094

0.107

0.125

0.134

Average ROE = 0.078+0.094+0.107+0.125+0.134

5
= 0.10746

PRICE EARNING RATIO (MARKET PRICE/ EPS)

Table showing HIGH PRICE EARNING RATIO OF ICICI

YEAR

2010

2011

2012

2013

2014

MARKET

1009.7

1139

918.8

1188.8

1318.5

EPS

36.1

44.73

56.09

72.17

84.95

HPER

27.97

25.46

16.38

16.47

15.52

PRICE

Average High PE Ratio =

27.97+25.46+16.38+16.47+15.52
5

= 20.361

Table showing LOW PRICE EARNING RATIO OF ICICI

YEAR

2010

2011

2012

2013

2014

MARKET

902.55

1072

827.25

981.7

1202.4

EPS

36.1

44.73

56.09

72.17

84.95

LPER

25.00

23.97

14.75

13.60

14.15

PRICE

Average Low PE Ratio

25.00+23.97+14.75+13.60+14.15
5

= 18.294

NORMALISED PRICE EARNING RATIO

Average High PE Ratio

= 20.361

Average Low PE Ratio

= 18.294

Normalised Price Earning Ratio = 20.361 + 18.294

2
= 19.3275
GROWTH RATE (ARR AROE)
Growth Rate

ARR AROE

= 0.970 0.10746
= 0.104236

PROJECTED EPS
Projected EPS = Current year EPS (1+growth rate)
= 84.95 0.9278
= 93.8048

INTRINSIC VALUE (PROJECTED EPS X NORMALIZED AVERAGE PE

RATIO)

Projected EPS
Normalized PE Ratio
Intrinsic Value

= 93.8048
= 19.3275
= 93.8048 19.3275
= 1813.012

Table showing INTRINSIC VALUE of ICICI

Average Return On Equity (ROE)

0.10746

Normalized Average PE Ratio

19.3275

Average Dividend Payout Ratio (DPOR)

0.0297

Average Retention Ratio

0.970

Long Term Growth Rate

0.104236

Projected EPS

93.8048

Intrinsic Value

1813.012

Intrinsic
value

Market value

1813.012

1318.5

Intrinsic Value > Market value

Interpretation: ICICI Bank has a higher intrinsic value than its market value, that is, it is
undervalued, so it is preferable to buy the stocks of ICICI as the current market value
would have a tendency to rise to its intrinsic value.
BANK OF BARODA
WORKING NOTE FOR THE COMPUTATION OF INTRINSIC VALUE
Table showing PAYOUT RATIO (DPS / EPS) of BOB

year

2010

2011

2012

2013

2014

DPS

1.5

1.65

1.7

2.15

2.15

EPS

83.96

108.33

121.79

106.37

105.75

PAYOUT

0.0179

0.0152

0.0140

0.0202

0.0203

Average Dividend Payout Raito (ADPR)

= 0.0179+0.0152+0.0140+0.0202+0.0203
5
= 0.01752
Average Retention Ratio

= 1-(ADPR)
= 1-0.1752
= 0.8248

Table showing RETURN ON EQUITY (NP/NETWORTH) OF BOB

YEAR

2010

2011

2012

2013

2014

NETPROFIT

3058.33

4241.68

5006.96

4480.72

4541.08

NETWORTH

15106.4

21043.5

27476.9

31969.4

35985.7

ROE

0.2025

0.2016

0.1822

0.1402

0.1262

Average ROE = 0.2025+0.2016+0.1822+0.1402+1262

5
= 0.17051

PRICE EARNING RATIO (MARKET PRICE/ EPS)

Table showing HIGH PRICE EARNING RATIO OF BOB

YEAR

2010

2011

2012

2013

2014

MARKET

702

1006.65

810.05

722

837.85

EPS

83.96

108.33

121.79

106.37

105.75

HPER

8.361

9.29

6.651

6.775

7.922

PRICE

Average High PE Ratio = 8.361+9.29+6.651+6.775+7.922

5
= 7.803

Table showing LOW PRICE EARNING RATIO OF BOB

YEAR

2010

2011

2012

2013

2014

MARKET

615.85

905.1

740.55

613.65

714.6

EPS

83.96

108.33

121.79

106.37

105.75

LPER

7.335

8.355

6.081

5.769

6.757

PRICE

Average Low PE Ratio =

7.335+8.355+6.0801+5.769+6.757
5

= 6.859

NORMALISED PRICE EARNING RATIO

Average High PE Ratio

= 7.803

Average Low PE Ratio

= 6.859

Normalised Price Earning Ratio

= 7.803+ 6.859
2
= 7.331

GROWTH RATE (ARR AROE)

Growth Rate

ARR AROE

0.82480.17041

0.14055

PROJECTED EPS
Projected EPS

= Current year EPS (1+growth rate)

= 105.75 (1+0.14055)
=120.613

INTRINSIC VALUE (PROJECTED EPS X NORMALIZED AVERAGE PE

RATIO)

Projected EPS

= 120.613

Normalized PE Ratio

= 7.331

Intrinsic Value

= 120.613 7.331
= 884.213

Table showing INTRINSIC VALUE of BOB

Average Return On Equity (ROE)

0.17051

Normalized Average PE Ratio

7.331

Average Dividend Payout Ratio (DPOR)

0.01752

Average Retention Ratio

0.8248

Long Term Growth Rate

0.14055

Projected EPS

120.613

Intrinsic Value

884.213

Intrinsic
value
884.213

Market value
837.85

Intrinsic Value > Market value

Interpretation: Bank of Baroda has a higher intrinsic value than its market value, that is,
it is undervalued, and so it is preferable to buy the stocks as the current market value
would have a tendency to rise to its intrinsic value.

AXIS BANK
WORKING NOTE FOR THE COMPUTATION OF INTRINSIC VALUE
Table showing PAYOUT RATIO (DPS / EPS) of Axis Bank

year

2010

2011

2012

2013

2014

DPS

1.2

1.4

1.6

1.8

EPS

62.06

82.54

102.67

110.68

132.33

PAYOUT

0.0193

0.0170

0.0156

0.0163

0.0151

Average Dividend Payout Raito (ADPR)

= 0.0193+0.0170+0.156+0.0163+0.0151
5
= 0.01665
Average Retention Ratio

= 1-(ADPR)
= 1-0.1665
= 0.8335

Table showing RETURN ON EQUITY (NP/NETWORTH) AXIS BANK

YEAR

2010

2011

2012

2013

2014

NETPROFIT

2514.53

3388.5

4242.2

5179.43

6217.67

NETWORTH

16044.6

18998.8

22808.5

33107.9

38220.5

ROE

0.1567

0.17835

0.1859

0.15644

0.16268

Average ROE =

0.1567+0.17835+0.1859+0.15644+0.16268
5

= 0.16803

PRICE EARNING RATIO (MARKET PRICE/ EPS)

Table showing HIGH PRICE EARNING RATIO OF AXIS BANK
YEAR

2010

2011

2012

2013

2014

MARKET

1287

1460.45

1226.5

1520

1555

EPS

62.06

82.54

102.67

110.68

132.33

HPER

20.738

17.6938

11.946

13.73

11.750

PRICE

Average High PE Ratio =

20.74+17.6938+11.946+13.73+77.750
5

= 15.172
Table showing LOW PRICE EARNING RATIO OF AXIS BANK
YEAR

2010

2011

2012

2013

2014

MARKET

1128.2

1270.3

1076.15

1198

1353.4

EPS

62.06

82.54

102.67

110.68

132.33

LPER

18.179

15.39

10.482

10.824

10.227

PRICE

Average Low PE Ratio =

718.179+15.39+10.482+10.824+10.227
5

= 13.020

NORMALISED PRICE EARNING RATIO

Average High PE Ratio

= 15.172

Average Low PE Ratio

= 13.020

Normalised Price Earning Ratio

= 15.172+ 13.020
2
= 14.096

Growth Rate (ARR AROE)

Growth Rate

= ARR AROE
= 0.8335 0.18603
= 0.15505

PROJECTED EPS
Projected EPS = Current year EPS (1+growth rate)
= 132.33 (1+0.15505)
= 152.84
INTRINSIC VALUE (PROJECTED EPS X NORMALIZED AVERAGE PE
RATIO)
Projected EPS

152.84

Normalized PE Ratio

14.096

Intrinsic Value

= 152.84 14.096
=

2154.432

Table showing INTRINSIC VALUE of Axis Bank

Average Return On Equity (ROE)

0.16803

Normalized Average PE Ratio

14.096

Average Dividend Payout Ratio (DPOR)

0.016652

Average Retention Ratio

0.8335

Long Term Growth Rate

0.15505

Projected EPS

152.84

Intrinsic Value

2154.432

Intrinsic
value
2154.432

Market value)
1555

Intrinsic Value > Market value

Interpretation: Axis Bank has a higher intrinsic value than its market value, that is, it is
undervalued, so it is preferable to buy the stocks of Axis Bank as the current market
value would have a tendency to rise to its intrinsic value.

DATA INTERPRETATION
Table showing Percentage change between market price and intrinsic value

NAME

INTRINSIC

MARKET VALUE

% CHANGE

VALUE
SBI

2495.59

2124.9

17.44

YES

756.29

474.9

59.25

ICICI

1813.012

1318.5

37.50

AXIS

2154.432

1555

38.54

837.85

5.53

BANK

OF 884.213

BARODA

Chart showing market value and intrinsic value

FINDINGS

In the Economic Analysis, the economy is booming after 2010 and current position
shows that this is the good time to invest after the recession because GDP growth
rate is increasing and overall economy is growing.

In the industry analysis, overall industry profit after tax is increasing over the
years which means banking industry is having much profit but on the other side
banking industry Net Profit growth has decreased very much so investor should
invest carefully.

In the company analysis, for all banks taken for the study, EPS and dividend were
increasing from 2010 onwards except bank of baroda

If investor wants to invest in the company for long term then he can have a good
profit because company growing rapidly in terms of profit and net sales and its
EPS & DPS are increasing over the years. .

SBI is underpriced by 17.44%.

ICICI bank is underpriced by 59.25%

Yes Bank is underpriced by 37.5%

Bank of Baroda is underpriced by 5.53% and Axis Bank by 38.54%

The intrinsic value of Yes Bank shows less worth than other banks.

SBI shows increase in profits, dividends and earnings.

GDP, interest rate, inflation rate, bank rate etc...also effects market share.

SUGGESTIONS :

It is suggested to buy and hold the undervalued stocks, i.e., all the banks taken for the
study are worth to invest as their shares prices have a tendency to increase in the
future.

The increasing EPS indicate good earnings. Also the increase in profit will give
hope for the shareholders in order to hold the share.

The shares of all Banks will be good for buying in the present situation, as the
companys intrinsic values are comparatively more than the actual market values.
SBI and AXIS show more intrinsic value.

Out of five companies, all five companies are worth to invest as per the intrinsic
value because its more than their market value

Stock market is fluctuating from time to time; therefore it is advised to check the
market conditions each time before investing in shares.

Investing in share market using borrowed funds should be avoided as far as possible.

It is always better to hold good stocks than to engage in rapid-fire trading for quick
returns.

Portfolio investment will decrease risk in investing in one industry.

CONCLUSION

Fundamental analysis is based on the analysis of the economic, industry as well as the
company and in this research we can see that the economic indicators have an effect on
the bank growth and assets. The above report says that our economic is growing after the
recession and it is the good time for the one who want to invest.
According to the industry analysis investor can invest in the banks but he/she should be
careful for the investment.
Invest current money or other resources for future benefits. The purpose of fundamental
analysis is to evaluate the present and future earning capacity of the share based on the
economy, industry and company fundamentals and there by assess the intrinsic value of
the share with the prevailing market price to arrive at an investment decision.

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