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A PROJECT REPORT ON

“COMPARITIVE ANALYSIS OF SYSTEMATIC INVESTMMENT PLAN &


LUMPSUM INVESTMENT IN MUTUAL FUND AT STOCK HOLDING
CORPORATION OF INDIA LIMITED”

SUBMITTED BY

FATIMA KHAN

MMS - FINANCE

ROLL NO: 171118

IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF MASTER OF


MANAGEMENT STUDIES

BATCH- 2017-19

UNDER THE GUIDANCE OF

Dr. Anjali Bhute

PILLAI INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH NEW PANVEL,


NAVI MUMBAI - 410206

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CERTIFICATE OF APPROVAL

This is to certify that the summer internship project titled “Comparative analysis on
Systematic Investment Plan & Lumpsum investment in mutual fund” is successfully
completed by Ms, Fatima Khan during semester III, in partial fulfillment of the Master’s Degree
in management Studies recognized by the university of Mumbai for the academic year 2017-19
and represents the work done at Stock holding Corporation of India limited.
This project work is original and has not been submitted earlier for the award of any degree /
diploma or associateship of any other University / Institution.

Name: Fatima Khan


Date:

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DECLARATION

I hereby declare that the summer internship project report, prepared by me under the guidance of
Prof. Anjali Bhute is a bona fide work undertaken by me and it is not submitted to any other
University or Institution for the award of any degree / diploma / certificate or published any time
before that the report is free of any plagiarism.

Name: Fatima Khan

Roll No: 171118

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ACKNOWLEDGEMENT

It gives me great pleasure or satisfaction for the successful completion of this project. Every
successful piece of work has many invisible helping hands with their invaluable support and
inspiration. For the completion of my project report many people directly or indirectly assisted
me. I wish to express my heartfelt gratitude to the following individuals who have played a
crucial role in the making of this project.

At first, I would like to express my sincere thanks and deep gratitude to my esteemed Director
Sir Dr. Satish k. Nair and my guide Dr. Anjali Bhute for their kind initiative guidance and
valuable suggestion without which the completion of the report would not have been possible. I
would also like to thank my company guide Mrs. Kashmira Chandra for providing the
valuable information.

Finally, I would like to thank all my colleagues and family for their co-operation.

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EXECUTIVE SUMMARY

Mutual funds pool money from different investors and invest in different investment
sources like stocks, shares, bonds etc. A professional fund manager manages these and
returns are paid in form of dividends. Some schemes assured fixed returns that are less in
risk and some offer dividends based on the market fluctuations and prices. Mutual funds
have to be subscribed in units and the purchase or sale is dependent on NAV (Net Asset
Value), taking into consideration the exit and entry load factors into account.

This project deals with mode of investment in mutual fund. i.e. by way of Systematic
Investment plan or Lumpsum investment. This project dealt with the awareness among the
people about the SIP and Lumpsum Investment. And to know which form of investment earns
more growth. The comparison between Systematic Investment Plan & Lumpsum investment of
HDFC small cap fund has done where the Lumpsum investment has performed well. Also study
the trends of SIP in mutual fund industry.

The finding of this project is that most of the people are not aware about the SIP. And
they have the fear of investing in mutual fund. By way of comparison both the form of
investment earns growth, it all depends on the market volatility, schemes, and time period.

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INDEX

SR NO. CONTENTS PAGE NO.


1 INTRODUCTION TO THE PROJECT (PART A) 7
2 COMPANY PROFILE 8-9
2.1 ORGANIZATION HISTORY 9
2.2 DETAILS OF THE TOP MANAGEMENT 10-12
2.3 VISION AND MISSION OF THE ORGANIZATION 13
3 INDUSTRY ANALYSIS
3.1 PESTEL ANALYSIS 14-16
3.2 PORTER’s FIVE FORCES ANALYSIS 17-19
3.3 PORTER’s GENERIC STRATEGY 20-21
4 COMPANY ANALYSIS
4.1 SWOT ANALYSIS 22-23
4.2 7S FRAMEWORK 24-26
4.3 VALUE CHAIN ANALYSIS 27-29
4.4 BCG MATIX 30-31
5 INTRODUCTION (PART B)
5.1 OBJECTIVES OF THE STUDY 32
5.2 EXPECTED BENEFIT 32
5.3 LIMITATION OF THE STUDY 32
6 METHODOLOGY 33-36
7.1. ORGANIZATIONAL TRAINING 36-38
7.2 SELF LEARNING 39
7.3 TREND OF SIP IN MUTUAL FUND INDUSTRY 40-42
8 ISSUES FACED BY MUTUAL FUND INDUSTRY 43-45
9 CONCLUSION & RECOMMENDATIONS 46-48
9.1 SUMMARY OF TRENDS IN ORGANIZATION 49
9.2 SUMMARY OF SELF LEARNING 50
10 REFERENCES 51
11 LEARNING AND TAKEAWAYS (PART C) 52-54

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PART A

1. INTRODUCTION TO THE PROJECT

Mutual Funds over the years have gained immensely in their popularity. Apart from the many
advantages that investing in mutual funds provide like diversification, professional management,
the ease of investment process has proved to be a major enabling factor. However, with the
introduction of innovative products, the world of mutual funds nowadays has a lot to offer to its
investors. With the introduction of diverse options, investors needs to choose a mutual fund that
meets his risk acceptance and his risk capacity levels and has similar investment objectives as the
investor.
Most importantly, mutual funds provide risk diversification: diversification of a portfolio is
amongst the primary tenets of portfolio structuring, and a necessary one to reduce the level of
risk assumed by the portfolio holder. Most of us are not necessarily well qualified to apply the
theories of portfolio structuring to our holding and hence would be better off leaving that to a
professional.
Lastly, Evaluate past performance, look for stability and although past performance is no
guarantee of future performance, it is a useful way to assess how well or badly a fund has
performed in comparison to its stated objectives and peer group. A good way to do this would be
to identify the five best performing funds (within your selected investment objectives) over
various periods, say 3 months, 6 months, one year, two years and three years. Shortlist funds that
appear in the top 5 in each of these time horizons as they would have thus established their
ability to be not only good but also, constant performers.

SIP and Lump sum are the two techniques to invest in mutual funds. Any investor can choose
one out of them and can invest their money into mutual funds. SIP is Systematic Investment Plan
which is very helpful to salaried and middle class man. They can invest their savings into
Systematic Investment Plan (SIP) and can collect huge funds for future.

SIP is paid in monthly or quarterly as per the scheme. But lump sum is paid only one time and
the whole transaction is based on this investing money. Opting SIP, an investor can invest their
saving into it and can safe his money doing that. SIP is good because if it seems that market will
goes down in few days so an investor can safely withdraw his money and can safe his money.

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2. COMPANY PROFILE

Stock Holding Corporation of India Limited (SHCIL) is India's largest custodian and depository
participant, based in Mumbai Maharashtra. SHCIL was established in 1986 and was granted a
status of a government company as per section 2(45) of Indian Companies Act, 2013. in 2014.
SHCIL is known for its online trading portal with investors and traders. It is also responsible
for e-stamping system around India. It is also authorized by Reserve Bank of India as Agency
Bank to distribute and receive Govt. of India savings/relief bond 2003 along with nationalized
banks. It provides different kind of services like Central depository service, Broking,
Derivatives, Mutual fund, Demat account, E-stamping.

Stock Holding Corporation of India Limited provides custodial, depository participant,


derivative clearing, and other financial services to institutional investors, banks, mutual funds,
and retail investors in India. The company also acts as a central record keeping agency for
collection and payment of non-judicial stamp duty. It offers demat, broking, clearing member,
derivative, business associate, financial products distribution, gold and silver bullion, gold
accumulation, and national pension system services. The company also provides custodial,
clearing and settlement, electronic and physical safekeeping, customized reporting, high security
vault, personnel, asset servicing, futures and options clearing, securities escrow, and custodial
and transactions settlement services, as well as Web-delivery services for daily trades reports,
mark-to-market profit/loss reports, collateral margin reports, account statements, outstanding
position reports, span margins requirement reports, and other related reports. In addition, it is
involved in the online/Web-based reporting of market information; handling of IPO applications,
allotments, open offers, buy-backs, ADR/GDR, etc.; and calculation of entitlements, benefit
collections, cheque / warrant deposits, reconciliation, and follow-ups, as well as provision of e-
stamping, document management, and training services. The company was incorporated in 1986

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and is based in Mumbai, India. Stock Holding Corporation of Limited is a subsidiary of IFCI
Limited.

SHCIL Services Ltd (SSL) is a SEBI registered Corporate Stock Broker providing safe and
reliable services to all institutional and retail clients across length and breadth of the country.
SSL offers services in both Cash and F&O segment BSE & NSE and Currency Derivatives
segment of NSE. SSL started broking operations in July 2006.

2.1.ORGANISATION HISTORY

Stock holding of corporation of India limited, was incorporated as a public limited company
in 1986. Stock holding is promoted by leading financial institution and insurance majors such as
IFCI, SU-UTI, LIC, GIC, NIA, NICL, TOICL, UIC, all leaders in their respective fields of
business. Stock holding is a government company, being a subsidiary of IFCI. Stock holding has
positioned itself as one of the market leaders providing financial services over the last 30 years
and holds assets under custody of 30 trillion, the largest in India.

Stock holding has been consistently earning profit and declaring dividends right from its
inception. With a share capital of Rs.211 million, Stock holding`s tangible net worth stands at
Rs.12,271.5 million as on March 31, 2017. SHCIL has around 20% market share i.e. over 8 lakhs
demat account. SHCIL has approximately 50% market share of delivery-based transaction which
amount to 1.33 crore transaction.

The auxiliary services provided by stock holding include Professional Clearing Member
(PCM) Services on F&O segment of NSE and BSE and recently launched MSEI (Metropolitan
Stock Exchange of India Limited) constituent SGL account services and PF accounting services
Stockholding also provides PCM services in both segments of currency derivatives and interest
rate futures (IRF) in BSE and NSE respectively. Stock holding has established itself as a one-
stop solution provider in the financial services domain.

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2.2.DETAILS OF THE TOP MANAGEMENT – BOARD, CEO

Name Designation
Mr. B. N. Nayak Director
Mr. P. H. Kutumbe Director
Mr. B. Baburao Director
Mr. Segar Sampathkumar Director
Mr. Prakash. P. Mallya Independent Director
Mr. M.V. Nair Independent Director
Mr. M. S. SundaraRajan Independent Director
Mr. C. M. Dixit Independent Director
Mr. GautamSen Independent Director
Ms. Jaya Balchandran Independent Director
Mr. Ramesh N. G. S Managing Director And CEO
Mr. SanjeevKaushik Non Executive Chairman( Till August
23,2017)
Mr. E. SankaraRAo Non Executive Chairman( Till August
24,2017)

2.3.SIZE OF THE ORGANISATION

A. Values:
 Safety & Efficiency of Operations is a hallmark of SHCIL
 Building strong relationships
 To place our customers above all things
 Professionalism & Integrity
 Commitment to quality irrespective of asset size

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B. Products & Services Provided:

Stockholding has number of financial products and services offered to both individual as well
institutional customers. The focus has always been to direct products and services for all round
the benefits of its clients and prospects.

C. Institutional Segment:

Custodial services of Stockholding are provided to financial institutional clients which consists
of the following:

 Post Trade Settlements


 Safe Keeping
 Corporate Actions
 Valuations of securities
 Fund accounting and customized web reporting.

D. Retail Segment:

The retail Services products and services comprises of the following:

 Depository Participation Services


 Sub-Broking
 Distribution of Investment Products and loan
 National Pension Scheme
 CRA for e-Stamping
 Investment Advisory Services Department (IASD)

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Performance Highlights For Last 3 years (in lacs)

Particulars Year End Year End Year End


31.3.16 31.3.15 31.3.14
Total Income 5,232.03 2,898.98 3,192.68
Expenditure
-Financial Cost 252.24 139.74 44.35
-Employees Benefit Exp 817.37 638.64 504.55
-Other Expenses 2,467.79 1,657.97 1,895.79
-Depreciation 498.70 312.63 275.27
Total Expenditure 4,036.10 2,478.98 2,719.96
Profit Before Tax & Prior Period 1,195.93 150.00 472.72
Adjustment
-Exceptional Items 9.02 17.55 0
PBT 1,204.95 167.55 472.72
Provision For Tax 434.81 65.93 155.41
PAT 770.14 101.62 317.31

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2.4.Vision and Mission of the organization.

Mission statement

“To be a world class technology driven and client focused market leader in financial and

technical services”

Vision Statement

“To emerge as a partner of choice in bringing delight to customer experience in finance and IT

solution Services”

Future strategy:

Stock Holding Corporation of India Ltd (SHCIL), a custodian and depository service provider, is
planning to raise Rs750-900 crore through an initial public offering (IPO), said a person familiar
with the development. The firm has invited bids from merchant bankers to manage the proposed
issue.
The company plans to dilute up to 25% of its equity in the initial share sale. At Rs750-900 crore,
Stock Holding Corporation would be valued at about Rs 2000 to Rs 2,200 crore.
The proposed issue would be of fresh issue of equity shares with an option for offer for sale from
some of the existing shareholders. The proceeds of the IPO will be used for the expansion of the
business, the person said. Stock Holding Corporation is planning to enter the non-banking
financial services business.

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3. INDUSTRY ANALYSIS

3.1.PESTEL ANALYSIS

 Political factor:

India claims a stable political system, a well developed regulatory system, a well capitalized
banking system, an established manufacturing base and also Mutual Fund Industry in India on a
Growth Trail 3303 development capabilities. Accordingly to a study, India was ranked second by
World Economic Forum, in the world for the accountability of its private institutions, and third
for its financial market development, “indicating high confidence in India’s financial markets at
a time when trust is returning only slowly in many other parts of the world”. The country’s
securities exchange, the JSE, is ranked among the top 20 in the world in terms of its size
(Southafrica.info 2013). Hence, there is good scope for mutual fund industry in India. SEBI
plans to allow investors to make mutual funds transactions worth up to Rs 50,000 (US$ 750) a
month through digital wallets, as part of its efforts to digitize the distribution processes for all
financial products. It also plans to allow immediate credit to customer’s bank accounts on liquid
mutual funds redemption to attract retail customers as well as boost inflows.

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 Economic factor:

Economic factors include economic growth, interest rates, exchange rates, inflation rate etc.
These factors have major impact on how businesses operate and make decisions. While the
global financial crisis staggered almost all the developing economies, India has been able to
withstand the crisis due to its fiscal and monetary policies. The World Bank has ranked India as
an “upper middle-income country”, it is one of the largest economy in Asia – it remains rich and
it has a lot of promise. India was admitted to the BRIC group countries of Brazil, Russia, India
and China (now known as BRICS) in 2011. India´s economy has continued to grow driven by its
domestic consumption. The Association of Mutual Funds in India (AMFI) is targeting nearly
five-fold growth in assets under management (AUM) to Rs 95 lakh crore (US$ 1.47 trillion) and
a more than three times growth in investor accounts to 130 million by 2025.

 Social factor:

According to figures from the National Treasury of India, total government spending have
reached Rs 1.7 trillion in 2015. This represents a doubling in expenditure since 2002/3 in real
terms. Furthermore, more than half of India’s population is aged under 20. In the next decade
and thereafter India may have a larger working-age population than China. The working
population may search for better investment avenues and therefore there will be good scope for
mutual funds in India. Generational shift in attitude towards saving money is also favourable for
mutual funds. Investors nowadays prefer investment in shares through mutual funds rather than
traditional avenues like bank deposits and others.

 Technological factor:

Up gradation in technology results in easy access to information about mutual funds, Assets
Management companies, introduction of various innovative schemes and also about capital
markets. Investors can also know about the ratings of various mutual funds/schemes and
performance analysis is also comparatively easy. This enables the investors to switch from one
scheme to another or from one AMC to another based upon the performance of the funds,

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investment objective and risk appetite of the investors. Technology is revolutionizing the way
that the financial industry operates. Rapidly accelerating technological advances are creating
entirely new business propositions, such as crowd-funding, peer-to-peer lending, digital
currencies, mobile banking, online investment and new payment systems.

 Environmental Factors:

Mobile apps are introduced so that there is no need of big offices and a large number of
employees. Nowadays we can do anything we want online, so is with this industry. As
everything is done digitally it saves paper, which results to less paper use, this leads to less
utilization of paper which is environment friendly.

 Legal factors:

The financial institution is mainly regulated by security exchange board of India (SEBI). Privacy
of customers is maintained, hence customers also feel free to carry out transactions. Consumers
laws are used to regulate this industry. Which gives various rights to customers for their safety.
Trade structure is structured in such a way that unregistered dealers can-not do trade in this
industry which helps in avoiding frauds. Securities Exchange Board of India keeps control over
this Industry.

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3.2.PORTER’s FIVE FORCES ANALYSIS

 Threat of new entrants:

There will not be any new large mass-market players or niche players bursting on the scene, but
there will be new independent broker dealer players as well as discounters, banks, insurance
companies and credit unions. Count as well the independent shops where a broker can set up
shop literally overnight. The costs of self clearing, recruiting, staffing, technology etc. prevent
any new mass-market or niche players from coming on the scene. The number of sub-industries
developing within the financial services industry has seen dramatic growth over the last couple
of decades. With the fall of Glass-Steagall, the barriers to entry fell impressively. Within each
sub-industry, there are few barriers to entry to prevent rapid growth. For instance, almost anyone
can get a job with an insurance company selling insurance. They can then get licensed to sell
securities (mutual funds and variable annuities). Within the banking system, many client facing
employees have at least a Series 6. Then within the independent/regional and warehouse
industries, the only barrier is the ability to pass the securities exams. Not a barrier really, more
like a speed bump. Because of free entry into the market the threat of new entrance is very high
in financial market.

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 Bargaining power of suppliers:

Who are the suppliers to a business based on intangibles? Mutual fund companies, hedge funds,
other broker dealers in structured deals, separate account managers, life insurance companies and
companies looking to go public, and believe it or not, Advisors fit in this category. Their
bargaining power has grown over the last 20 years from not being paid to move, to deals of up to
300% of their trailing 12 months production as well as commission and fee payouts and benefits.
Today these mass-market firms must pay their Advisors to stay at work on top of salary, bonuses
and benefits. They are called retention bonuses. Mutual funds, insurance companies, money
managers can gain access to the various firms, but to be in a preferred list, these entities have to
pay a little extra. This is to gain a good spot on the shelf, eye level. Here the heft of the
wirehouses can gain the firms more credibility when demanding the shelf space fee.

 Bargaining power of buyers:

Shifted dramatically toward the favor of the buyers. Gone are the days when the industry had all
the information. In the 80’s the phone would ring at night and the weekends with investors
looking for an explanation for the drop in AT&T’s stock. The newspaper was the only place to
get a quote then and if AT&T went ex-dividend it used to be enough to create a call. Along
comes the internet and now the buyers have access to faster, better and more clear analysis and
information than the industry itself provides to Advisors. As if that were enough, now there are
multiple sources of information the investor can access. While their Advisor is stuck with being
able to only supply the firm’s individual-investor-digestible research. Because of low switching
cost switching from one company to another by an AMC can be easily carried out without much
loss of time and money which also lowers the bargaining power of customers. Existence of large
number of companies the buyers have multiple investment options available.

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 Threat of substitution:

What is it the firms in the wealth management industry provide? Wealth transfer, wealth
preservation and wealth creation. Wealth Transfer can be handled by insurance companies, and
they do a lot! Wealth Preservation by banks, trust companies, life insurance companies. Wealth
Creation in this country has always been through the creation of businesses; long, slow
disciplined investing; luck with corporate stock options; real estate and other non-financial
markets; all of these not the domain of diversified financial services companies. Financial
Services firms are not the place where investors go to become wealthier. It is the place wealthy
people go in hopes of maintaining their wealth. Substitutes like most innovative banking
products, Government securities and other investment options pose a high threat to mutual fund
industry.

 Intensity of rivalry:

These companies raid each others local shops offering checks ranging from 200% to 300% of the
financial adviser trailing 12-month production. There was a time when the quality of research
was a differentiated and the competition to offer the best advice was furious. There is no
competition to be the lowest cost provider, competition on prices is left up the advisor sitting in
front of the client for the most part. At the firm level, there is almost no way to distinguish the
client experience from one to the other on the mass-market side, other than brand.

Due to the number of players in the market such as bank sponsored, public and private
players including foreign players operating in the market have increases the competition. Almost
all the players in the market offers the same kind of products which creates the high competition
among them

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3.3.PORTER`S GENERIC STRATEGY

Designed by Michael Porter in 1979, Porter’s Generic Strategies is a frameworks used to


outline the three major strategic options open to organizations that wish to achieve a sustainable
competitive advantage.

 Cost leadership strategy:

The cost leadership strategy advocates gaining competitive advantage due to the lowest cost of
production of a product or services. A cost leadership is based on the concept that the
organization can produce and market a good quality product or services at a lower cost than its
competitors. These low cost should translate to profit margins that are higher than the industry
average. Some of the conditions that should exist to support a cost leadership strategy include an
on-going availability of operating capital, good process skills, close management of labor,
products design for ease of manufacturing and low cost distribution.

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The mutual fund investors are divided in to the large number of units with a small of investment.
The total investment of any single mutual fund scheme divided among the million of investors,
that means total operating cost of the fund is also divided in to million of investors. Mutual fund
organizations are also able to reducing the operating cost with the help of economies of scales
that’s why they offer very low cost products for investors. There is no entry load while investing
in mutual fund, Which attracts more investment. There is only 1% exit load in mutual fund if
withdrawal of amount take place before 1 year.

 Differentiation strategy:

A differentiation strategy is one of creating a product or services that is perceived as being


unique throughout the industry. The emphasis is on the superior service or product. Taking the
example of mutual fund which gives the low return when compared to the stock market. The
mutual fund industry is less risky as compared to stock market. In mutual fund a fund manager
take care of all the funds, while in stock market a person has to do it yourself. While comparing
to the banks mutual fund industry gives the higher return with a high risk than banks. As
compared to the other investment avenue mutual fund gives the highest return with the help of
the expert advice. Thus

 Focus strategy:

It is based on the concept of serving a particular target in such an exceptional manner, that others
can-not compete. The focus strategy is based on the targeting the different segments. For
example working group of people between age of 18 to 35 looks for equity oriented schemes
which gives the high return with high risk, whereas above 40 age group of people look for a less
risky investments where they can get a constant rate of return. The business man can invest in
mutual fund by way of lumpsum investment, whereas regular earning person can invest through
systematic investment plan. If a person is looking for a fixed rate of regular income after the
retirement can invest in national pension schemes (NPS).

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4. COMPANY ANALYSIS
4.1.SWOT ANALYSIS

STRENGTHS:

Being the oldest depository participant, Stockholding has got few elements that acts as a strength
to a company which are as follows:

 Wide coverage throughout the country


 Promoted by 7 Financial Institutions
 Largest account holders
 Largest custodian
 Catering to Indians as well as NRIs and FIIs
 One stop shop for all financial solutions
 Advanced system network
 Multiple products and services: SHCIL provides a variety of services under the same roof
 It is the member of both NSDL and CDSL
 The variety of services offered has enabled SHCIL to have a much more competitive
edge about financial services than its competitors.
 Brand image along with its oldest foundation in 1986.

WEAKNESS:

 Expensive. (Because separate account has to be opened according to holdings).


 Less investment in advertising.
 The clients are not provided any incentives or motivations, which would encourage them
to make timely payment.
 Company has not undertaken sufficient steps to create awareness among the clients about
SHCIL. The only procedure adopted is the internet.
 HR department is placed in Mumbai. So the newly recruited employees lack sufficient
training facilities
 Lack of aggressive marketing.

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OPPORTUNITIES:

 E-Broking.
 Acquisition of smaller DPs.
 Collaboration with banks.
 New products.
 Can attract more number of franchises
 Acquisition of smaller DP`s
 The company can take steps to increase the awareness among the clients and thereby
increase the business.
 The company can attract more number of Franchises.
 SHCIL is the first depository participant. It has the opportunity of holding more than
7000000 accounts at all centers

THREATS

 Increased cost as perceived by customers.


 Fluctuating market conditions affect the business.
 Discount given by other DP`s can be a threat.
 The number of competitors is increasing at a higher rate.
 Competitors charges are also low when compared to the charges of SHCIL.
 The nearest competitors are banks providing DP services along with their regular
services.
 The company dose not charges any amount for closing the account. Since retaining the
customers will not think of closing the account at time of opening the account the
company can charge some for closure.
 The discounts and offers given by other DPs when compared to offers of Stockholding
Corporation Of India Ltd are leading to reduction in the number of clients.

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4.2.7S framework to analyse the different aspects of the organization.

 SKILLS:
Employees were highly skilled as majority of them were MBA grades from top institutes and has
good years of experience. Proper training was given at each level so that the employees improve
at every stage and a better result is expected. They have knowledge about all the fields if any
emergency arises the other employees can resolve the queries of customers. Every staff carries a
good communication skill. Whenever the client use to visit the office the staff use to attend them
with all solutions to their problems.

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 SHARED VALUES:

Employees are adhere to the values of the company. They are as the brand pillars of the
company that is accepting no limits, driving positive change, alternative thinking. SCHIL
believes in building strong relationship with its employees or customers. SCHIL place their
customers above all things. Efficiency of Operations is a hallmark of SHCIL. SCHIL follows
dedicated customer care line managed by train employees to answer the queries on Demat
trading etc.

 STRATEGY:

The strategy used is B 2 C as the company is a NBFC which is purely into service sector. It is
trying to reach out to more customers in rural and urban areas. They are adopting new-new
strategies to reach out the new customers. SCHIL provides various offers to retain its customers.
SHCIL is using dedicated communication channels with built-in redundancies in connectivity to
Client Institutions.

 SYSTEMS:

The system is formally structured and a proper performance review is done periodically to
evaluate the employee’s performance. A proper appraisal is done on a quarterly basis. At stock
holding, they place very high premium on client reporting. Periodic statement sent to the client
keep them informed of their account status. The company has highly computerized, state
of art technology to facilitate the business and minimize the risk from automated
operations. Full Confidentiality of business operations is maintained. At Stockholding, they place
a very high premium on client reporting.

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 STYLE:

The style followed here is autocratic as being in the service industry. The management prefers to
follow a particular pattern which otherwise could affect their customers. The work in SCHIL is
highly structured. Everyone has to follow the rule with related to the organization. It is essential
that each person have a clearly assigned task, a deadline, and rules to follow.

 STRUCTURE:

The hierarchy followed is vertical where there is proper flow of communication. Each position is
mapped according to their verticals.

 STAFF:
The position was filled based on the candidates. KSA 2 various competency based tests were
done which help them evaluate the candidate. Any gap which was identified was immediately
taken care off to employees was given proper training. The staff of the SCHIL is expert in their
work; they are more dedicated towards the work.
A focused Client Relation Team to manage your needs & queries. A single point contact for
client’s comfort.

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4.3.VALUE CHAIN ANALYSIS

A. Primary Activities:

Primary activities relate directly to the physical creation, sale, maintenance and support of a
product or service. They consist of the following:

 Inbound logistics – These are all the processes related to receiving, storing, and
distributing inputs internally. SHCIL collects the information from the companies
regarding their financial products which is then transferred or distributed to the investors
in order to convert them into potential investors. SHCIL plays an important role in
receiving the information from the different companies act as an intermediate between
the companies and investors by storing the data and forwarding it further to the investors.

 Operations –These are the transformation activities that change inputs into outputs that
are sold to customers. Here, your operational systems create value. SHCIL is a financial
service provider which collects the information about the new investment alternatives

27
that comes up in a market which is then transformed to the potential investors for making
an investment decision. They have a tie up with all the fund houses that are AMC (Asset
Management Company), banks, RTA (Register and Transfer Agents), Insurance
Company, etc.

 Outbound logistics – SHCIL act as a mediator that collects the information and the
financial instruments regarding schemes, scripts/stocks, funds, etc. From the respective
companies then it is sold to the potential investors. These are things like collection,
storage, and distribution systems, and they may be internal or external to your
organization.

 Marketing and sales – SHCIL market their products by the way of online publish,
physical hoardings, interpersonal interaction with people and very less importance is
given towards television advertisement. SHCIL and ArthaYantra have entered into a
partnership to offer online wealth management advisory services.

 Service – any information related to the investor’s investment is communicated to the


investors. Even if any investors ask for any advices on investment SHCIL helps them by
providing the suggestion. Their innovative Services are designed to incorporate a high
level of flexibility which enables us to customize as per client specific requirements.
Services was given by SHCIL is demat and trading, SIP in stocks, Mutual fund, etc.

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B. Support Activities

These activities support the primary functions above. In our diagram, the dotted lines show that
each support, or secondary, activity can play a role in each primary activity. For example,
procurement supports operations with certain activities, but it also supports marketing and sales
with other activities.

 Human resource management – The position was filled based on the candidates. KSA
(Knowledge Skilled Ability) 2 various competency based tests were done which help
them evaluate the candidate. People are a significant source of value, so businesses can
create a clear advantage with good HR practices. Any gap which was identified was
immediately taken care of towards employees was given proper training.

 Technological development- ISO/IEC 27001:2013 certification for Stock Holding’s


Data Centre and its Operations is an assurance to customers and other stakeholders that
Stock Holding has benchmarked itself with the highest standards of security and due
diligence in their IT systems.

 Infrastructure – SHCIL has an efficient and effective backend as well as front office
that help a smooth functioning of every operation. In order to cover the large number of
investors SHCIL has widely spread its branches in all over India. SHCIL also has various
branches setup in different locality so that people finds it convenient to visit.

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4.4.BCG MATRIX

The BCG matrix is a chart that had been created by Bruce Henderson for the Boston Consulting
Group in 1970 to help corporations with analyzing their business units or product lines. This
helps the company allocate resources and is used as an analytical tool in brand marketing,
product management, strategic management, and portfolio analysis.

Star Product:

Demat & Trading and Mutual funds stands at star position in BCG matrix. As these products
have the high market growth and they also have high market share. There is a lot of growth
potential because of increasing disposable income of customers, increasing working class, more
volatility in other markets also increasing importance of savings and it also allows user to
convert their physical form of shares into dematerialized form.

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Mutual fund is also a star product as it has very high growth rate and high market share is
captured by this particular industry, people tends to invest more in this which helps them with a
good returns.

Question Marks:

E-stamping stands at Question marks position as it as high market growth and low relative
share. This means the product is having very high growth rate but it has not getting the scope for
its increasing market share. E-stamping is web based solution for payment and collection of non
judicial stamp duty. SHCIL is the only Central Record Keeping Agency (CRA) appointed by the
Government of India. The prevailing system of physical stamp paper/franking is being replaced
by E-stamping system. Stock Holding Corporation of India Limited (SHCIL) has been promoted
by all India public financial institutions and insurance majors. The main reason for not getting
product promoted is it is not operating in many states, but according to reports e-stamping will
cover all Indian states in next three years.

Cash cows:

National Pension Scheme stands at cash cow. This shows that Stockholding Corporation has
high market share and low market growth rate in NPS. This means we should only focus on
profitable products and try to invest on those products which are low market growth rate but
perform well if proper investment is valuable.

Dogs:

In insurance sector of Stockholding Corporation this product is in dog position. Stockholding


Corporation insurance products have low market share and low growth rate as now-a-days
everyone has invested in one of the insurance policies. No people are willing to invest more and
more in insurance.

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PART B

5. INTRODUCTION

5.1.Objectives of the study

 To study the knowledge of investors about SIP & lumpsum investment in mutual fund
 To know which form of investment earns more growth (sip & lumpsum)
 To know by which means the investors invest in mutual fund schemes

5.2.Expected benefits

 To understand & to know which is the most preferable way to invest in mutual fund
schemes

5.3.Limitations of the study

 There are some problems that I faced, I saw that people doesn’t convinced easily to invest
in mutual fund they have misperception that investing in mutual fund is like a gambling
and some people says that investing in mutual fund is same as investing in share market.
 I observed this when share market was very down and day by day it was going down and
down so people were hesitating to invest in mutual fund.
 These all things are happen when there is lack of proper advertising. People have good
knowledge of insurance and other things than mutual fund. there was the lack of
awareness about SIP
 People were not ready to listen because of their busy schedule
 Limited period of time that is 2 months
 There was the Limited scope of study due to the calling

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6. Methodology

SYSTEMATIC INVESTMENT PLAN:

SIP works on the basic concept of the regularity of investments. It works like a recurring
investment of a fixed amount, which gets debited directly from your bank account every month
on a predefined date. Thus, SIPs allow you to systematically invest a small amount of money in
Mutual Funds every month without your regular intervention.

I observed that people were ready to invest in SIP because of its regularity of investment,
discipline, etc. some of the benefits of investing in SIP are as follows:

 Rupee cost averaging:

Rupee Cost Averaging is no rocket science. It adopts a very simple and practical principle of
being disciplined and regular with investing. Almost each one of us desires to build wealth for
future goals. And this is achieved through investing in diverse avenues that generate positive
returns. Rupee Cost lets you achieve this goal by being more systematic in your investing, and
not in any haphazard way.

 Compounding interest:

Life compounded interest accumulates over a period of time, the larger the tenure is the higher
the value would be. Thus, an extended investment period always helps one accumulate more
wealth due to the Power of Compounding. An early investor accumulates more than one who
comes in later. The take away from Power of Compounding is to start early even if the amount is
small because the cumulative returns are so big that it hardly matters how much you start your
investments with the only thing which matters is the tenure of investment.

 Convenience:

Convenience of investing is so powerful with SIP and net banking as well as redemption of units,
that the mutual fund investment scenario has quite changed in the last few years or so. You do
not need to remember to submit cheques every month and track your NAV and units as the entire
process is fully automated.

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LUMPSUM PLAN

Lumpsum plans or one-time investing require investors to invest in the fund at one shot. The
number of units that can be bought from lump sum amount on the first day of investment is
higher than SIP. This method of investing is usually preferred by aggressive/experienced
investors and high net worth individuals. This is a good option for investing extra cash on hand
instead of keeping it idle. Since the payment has to be made only once, the investor can just relax
without worrying about any further payments to be met in the future.

Lump sum investment is well suited for financial goals like a child’s education & marriage or
others which go over 10-12 years into the future.

Advantages of lumpsum investment:

i. Investment of big amount:


This is a good option for investing extra cash on hand instead of keeping it idle. if a
person have big amount in hand they can invest by way of lump sum.

ii. Convenience:
Since the payment has to be made only once, the investor can just relax without
worrying about any further payments to be met in the future.

iii. Ideal for a long term horizon:


Lump sum investment is well suited for financial goals like a child’s education &
marriage or others which go over 10-12 years into the future.

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COMPARISON BETWEEN SIP AND LUMPSUM OF HDFC SMALL CAP FUND FOR
DIFFERENT TENURE:

SIP PERFORMANCE – regular plan- growth option:

Since inception 5 year 3 year 1 year

Total amount 1230.00 1200.00 360.00 120.00


invested (`000)
Market value as 3384.51 3259.10 488.35 122.43
on june 2018
Return 18.73 19.00 20.93 3.83
annualized (%)
Benchmark 13.14 13.48 8.63 -20.87
returns (%)
Additional - 12.36 12.55 14.15 9.41
benchmark (%)

LUMPSUM PERFORMANCE – regular plan- growth option:

Date Period Schemes Benchmark Additional Value of Rs 10,000 invested


return return (%) benchmark Schemes Benchmark Add.
(%) return (%) (Rs) (Rs) benchmark
Jun 30, Last 1 year 18.02 -1.01 14.09 11802 9899 11409
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Jun 30, Last 3 19.40 11.50 10.00 17021 13860 13309
15 years
Jun 28, Last 5 23.52 21.15 14.28 28791 26127 19507
13 years
Apr 03, Since 15.37 8.05 9.53 43256 22105 25403
08 inception

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From the above comparison of sip and lumpsum trend it is clear that performance of both HDFC
small cap fund SIP as well as lumpsum in regular plan has outperformed from its benchmark
since inception. When we compare the annualized return with each other we can say that
lumpsum has performed much actively than SIP. This can be because of the high volatility of the
market. As small cap funds performs in the volatility of the market the lumpsum amount which
goes into the market at the time market is down and intends to move up that is the time when
small cap funds make money.

7. Observations

7.1.Classification of observation:

7.1.1 ORGANISATIONAL TRAINING

 Mutual fund:

In mutual fund we get to know about the fact sheet in which we can see the past performance of
the funds on the basis of which one can decide which fund is better for investment. It also shows
the Net Asset Value (NAV), fund manager of the fund. In short it gives the overview of mutual
fund schemes to the investors.

We also came to know about what are the documents required while investing in mutual fund
schemes that is Aadhar card, Pan Card, photo, etc.

At the time of training we came across the investors who choose different mode of investment
while investing in mutual fund schemes like SIP (Systematic Investment Plan) or Lumpsum.

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 Insurance (ICICI Lombard):

Term Plan-

If anyone who are planning to take a life insurance cover plan for specific period by paying a
small amount of premium then they have an option that they can choose term plan as term plan
provides pure life cover in a small premium amount at an early age with high claim settlement.

Health Insurance-

Health insurance is insurance that covers the whole or a part of the risk of a person incurring
medical expenses the insured person pays a fixed sum (premium), every year for the health
cover.

Eligibility criteria of ICICI Lombard:

 The customer can buy the policy for any family member, children, parents
 The insured should be above 3 months in case of floater and 6 years in case of individual.
 The proposer needs to be aged above 18 years.

Motor Insurance-

 Motor insurance is the insurance policy for vehicles.


 Loss or damage to your vehicle due to natural calamities: This could include fire,
explosion, lightning, earthquake, flood, typhoon, hurricane and landslide.
 Loss or damage to your vehicle due to man-made calamities such as burglary, theft, riot,
or a malicious act.

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 Third Party Legal Liability: Protection against legal liability due to accidental damages
resulting in the permanent injury or death of a person, and damage caused to the
surrounding property.
 In general, auto insurance does not cover depreciation, wear and tear or mechanical
breakdown.

 NPS (National Pension System):

In training we came to know that there are two ways to invest in this that is active choice and
auto choice.

 Active Choice- If an investor goes with an active plan, they have two options either you
can invest completely in debt instruments and government securities or they can invest
maximum 50% in equity with the combination of debt instruments or government
securities.
 Auto Choice- The second way of investing in NPS is auto choice. This is for those people
who do not have the required expertise to decide asset classes so the amount are
automatically invested in asset classes based on their age.

 Demat and Trading:


 To verify the physical share certificates with its existing name of a company with the
specified name in a share certificate.
 If the company still exists, check the new name and mention that on certificate along with
its ISIN number.
 Collect those certificates and send them to the backend office for further documentation
which will then send to Registrar of the specific companies.
 After all these process the physical certificates are then converted into Demat form.

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7.1.2 SELF LEARNING

 While working in an organization as a summer intern I came across various elements


such as punctuality, discipline, team work, leadership, dedication, etc.
 I saw people working in an organization were very punctual on their work.
 Whenever there used to be client in office the employees used to attend them even after
working hours which shows the dedication towards the work.
 Gained confidence while interacting with people on and off field.
 After working with stock holding corporation of India limited (SCHIL) I understand how
the market performs. Also different elements like market index such as Nifty, Sensex,
how it functions as a benchmark.
 I came across with so many things which earlier I was not knowing like I get to know
about mutual fund, how to open demat account, how to invest, what are the ways to
invest etc.
 The organization trained us about all their investment products such as National Pension
Schemes, Fixed Deposits, Insurance, Mutual Funds and other than this they also gave us
extra knowledge about the Trading and Demat Account.
 I came to know in detail about the mutual fund, like what are the best way to invest in
mutual fund (SIP & LUMPSUM), in which fund should I invest, the past performance of
the particular fund, etc.

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7.2.TRENDS OF SIP IN MUTUAL FUND INDUSTRY

Systematic investment plans (SIP) of mutual funds have been well documented as a systematic
and scientific method of creating wealth in the long run. The idea is nothing new and mutual
funds distributors and brokers have been trying to push this idea quite aggressively for over 2
decades now. Something seems to be changing in the last couple of years. Since 2008 when the
market downturn began, equity mutual funds were consistently seeing outflows. The trend
changed in mid 2014 and has sustained since. But what is more interesting is that an increasing
share of the mutual fund inflows are into equity funds and an increasing shares of equity fund
inflows are in the form of retail SIPs.

Over the last 3 years since there was a turnaround in MF inflows, the number of SIPs have
doubled from 52 lakhs to 1.28 crore. The average monthly SIP collection which was around
Rs.1200 crore in 2014 has shot up to Rs.4200 crore in 2017. The average size of the SIP has
increased from Rs.2300 in 2014 to Rs.3200 in 2017 and the overall number of folios has grown
by nearly 40 % during these 3 years. The chart below captures the actual SIP inflows each month
during fiscal year 2016-17 based on AMFI (Association of Mutual Funds of India) data.

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DATA SOURCE AMFI INDIA:

The chart clearly depicts that the total amount of Rs.43,921crore collected via SIPs during fiscal
year 2016-17 came in at a steadily increasing rate. The question that, therefore, arises is why
SIPs have suddenly come into the limelight. Why are Indian retail investors plumping for SIPs as
a means of investing in equity funds?

There are 5 basic reasons for the sharp growth in SIPs in India

 To be fair, it has not been a sudden shift by Indian retail investors toward MF SIPs but
the culmination of a series of events over the last 20 years. The experience of the last 9
years has taught Indian retail investors that between 2008 and 2017, the Sensex returned
just 3.95 % on a CAGR basis. That is lower than a savings bank deposit and typically
represents the downside risk of lump-sum investing. On the contrary, an SIP done since
2008 has performed exceedingly better as it has made the best of the prolonged lull of
2009 and of the 2011-2014 phases.

 Traditionally preferred investment avenues in India like property, gold and bank FDs are
not appearing to be as lucrative as before. Consider the following. Firstly, bank FD rates
have dipped sharply with repo rates in the last 2 years and are hardly able to cover
inflation in post-tax terms. Secondly, property has been quite erratic since the sub-prime
crisis of 2007 and the demonetization has only made cash transactions very difficult in
the property space. Lastly, with the government putting limits on gold holdings, investors
are left with very few options. The only credible option left to generate wealth is equities
and SIPs offer the best way not to worry about timing the market.

 The big advantage from SIPs is that volatility becomes your friend rather than becoming
your enemy. Let us understand this little better. In an SIP, you typically allocate the same
amount of money each month irrespective of the level of the market. With the Nifty
touching new highs, there is risk of volatility due to a mix of global and domestic factors.

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The answer to this problem is an equity mutual fund SIP. These SIPs not only get you
best value on downside volatility but also avoid the risk of worrying about tops and
bottoms. It therefore becomes a passive approach to investing in equity and has proved to
outperform the index consistently on an empirical basis.

 Demonetization may have been a bad word for liquidity but has been a boon for mutual
funds. For long, mutual funds has been a well regulated industry. Hence demonetization
hardly had any impact on mutual funds since most of the fund flows were anyways
through banking channels. As the SIP chart above shows, the SIP momentum has actually
gathered pace after the demonetization. That was because, one could easily buy mutual
funds with basic KYC (Know Your Client) formalities and investors could see their
wealth expanding without worrying about regulation and compliance.

 Lastly, people find SIPs to be quite efficient in terms of tax treatment. When it comes to
long term wealth creation there are two things that are critical. Firstly, it needs to be tax
efficient and secondly it should overcome reinvestment risk. Let us look at this a little
closely. Like any mutual fund equity SIP, you get the benefits of tax-free dividends and
also tax-free capital gains if held beyond one year. This makes an equity fund more
attractive compared to gold, property and bank FDs. But the bigger advantage is on the
reinvestment front. When you opt for an SIP on a growth plan of an equity fund, you do
not worry about reinvestment risk. That is automatically taken care of by the fund
manager. That is not the case with equities, gold, FDs or even property.

The shift to equity SIPs that is evident in the last few months is not a sudden phenomenon but
the cumulative impact of the last 20 years of ups and downs that investors have seen in the
Indian markets. The good news is that finally, Indian investors have opted for a time-tested
method of creating long term growth.

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8. Identification of critical issues or problem areas if any with respect to mutual fund
industry

The challenges which the mutual fund industry had to face are low customer awareness and
financial literary pose which act as the biggest challenge to channelize the household savings
into mutual funds. Further the fund houses have show limited focus on increasing retail
penetration and building retail AUM. Most AMCs generally focus on the top 20 cities that is
manifested in limited distribution channels and investors servicing. Further multiple regulatory
frameworks governs different verticals within the financial service sector, such as different
policies pertaining to the pan card requirements, mode of payment, funds management by
insurance companies and commission structures, among others. Factors that are impediment to
the mutual fund investing are the availability of the large number of mutual fund schemes that
makes investment decision complex and difficult, complicated KYC norms that restricts
potential investors and quality of advice provided. There is a need for collaborative efforts across
all key stakeholders to harness the future growth potential and reach out to the customers. Key
words: Mutual fund, Growth Fund, Balanced Fund, Income Funds, Professional Management,
Asset Management companies.

 Low level of awareness:

The awareness of investors determines the success of mutual funds industry. In India, low
investors awareness/ information level and financial literacy have been causing biggest threats to
mutual funds industry in channelizing the household savings into mutual funds. According to the
Invest India Market Solutions Report (2007) “Just one out of seven people with savings in 2007
were aware of mutual fund opportunities”. 1 Low awareness level among retail investors has a
direct bearing on the low mutual funds off take in the retail segment. Due to this, investors in
India still prefer bank deposits to mutual funds. The Karvy Private Wealth Report (2010) reveals
that “more than 40 percent of Indian household savings find their way into bank deposits. Only
3.8 percent of their savings go to mutual funds”. 2 The majority of new investors do not
understand the concept, operations and advantages of investment in mutual funds. The lack of
understanding about mutual fund products is more pervasive in semi-urban and rural areas.

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 Existence of competition:

The increase in the number of mutual funds and various schemes has increased dire competition
among them. Hence it has been remarked by Senior Brokers “mutual funds are too busy trying to
race against each other”. As a result they lose their stabilizing factor in the market.

 Government rules and regulation:

Each mutual fund is to have an assets management company which is to be registered with SEBI
after fulfilling the prescribed and detailed formalities specified in regulations. Specific
restrictions have been laid down on the business activities of the AMCs. Their obligations have
also been spelled out in their Investment Management Agreements. Every scheme which is to be
launched by mutual fund has to be floated by its AMC. The mutual fund sector operates under
stricter regulations as compared to most other investment avenues.

 Poor savings:

One of the foremost problems faced by Mutual Funds Industry is poor savings. At present,
expenses of a common man have been increasing while his income is not increasing in that ratio.
Due to this reason, his total income is finished in his house hold expenses and he finds himself
unable to save any money for investment in mutual funds.

 Heavy commission to agents:

The mutual funds distributors get heavy commission for their services. This commission cost is
borne by the AMC and the investors which increases the cost of investment. Due to this heavy
cost of commission, investors lose a handsome part of their invested money.

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 Stagnant fee and high cost:

The fee structure in Indian mutual funds industry is stiff in nature as compared to developed
countries. In developed countries, the fee structure is based on several factors such as the
investment objective of fund, fund assets allocation, fund performance, the nature and number of
services that a fund offers etc. It is not so in India, as a result, while the expenses have
continuously been rising; the management fees have remained the same.

 Rising investors complaints:

The Indian mutual funds industry has now more than four crore of investor accounts. Many of
them are multiple accounts held by a single investor. After the provision of filing mutual fund
complaints, investors’ complaints are rising in the industry. According to the AMFI Investor
Complaints Report (2009-10), 39 mutual fund companies had 4.95 lakh investor complaints
against them. Most of the complaints were pertaining to non-receipt of dividends, non-receipt of
redemption proceeds and the non-updation of PAN (Permanent Account Number), bank details,
nomination, etc.

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9. CONCLUSION

These two techniques are better themselves. People should consider before investing money in
mutual fund and invest in good AMC. It doesn’t matter that SIP or Lump Sum will give better
return. It all depends on fund manager and AMC.

Achieving one’s financial goal and not an end by itself. An investment in a poorly managed fund
remains just that irrespective of the investment mode i.e. lump sum or SIP. Hence investors first
select a well managed fund which has a track record to show for.

Many AMC show result in their fact sheet which has good performance it doesn’t mean that this
mutual fund will perform in future. So investors should consider more on this point before
investment.
According to survey, 34% people say that Lump Sum is good technique for investment and on
the other hand, 66% people say that they will chose SIP to invest in mutual fund. So trends say
that SIP is good for investment purpose in mutual fund.

But apart from that people also depend on the market and they take advices some experts of this
field. They invest what they want. I’ve seen SIP is a mean not an end. Investors would do well to
realize that the SIP is means for that people don’t want to invest money monthly and they want
to get rid of this kind of investment because they think that this type of investment can divert
their mind from their business. Some people invest money through lump sum at once. So that
they can concentrate more on their business activities. So the outcomes of this project is that
people invest money in mutual fund by both techniques, SIP and Lump Sum but some time
investor is in more profitable and some not its depends on market fluctuation.

it is quiet difficult to compare SIP and lump sum investment due to the reasons that if a person
do not have lump sum amount they cannot think about lump sum investment and an investor who
have lump sum amount and opt SIP than how and where they will park their fund. And, hence,
we can conclude as under:

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 An investor who expect regular surplus in future, they must go for SIP.
 If we have long horizon for investment, say for 10-15 years, growth in lump sum
investment is always more than SIP.
 SIP is best suited for those who do not have lump sum amount but expect regular surplus
in future.

Broadly saying, SIPs are better than lump sum investments. Many investors think they will
invest when the market is at the bottom, but it is very difficult to time the market. Besides return,
SIPs are best investments for a person who get regular income. In addition to that, an investor
needs not to disburse his saving at once.

Thus both the form of investment can earn more growth in future. It’s all depending on the
market volatility. Mostly people invest in mutual fund by way of SIP as SIP is the easy way to
invest.

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Recommendations:

Investment is the technique by which people save the money for future and increase their living
standard. Many people who don’t know and don’t want to take more risk by investing in shares
and securities therefore Mutual Funds are better instruments to save their money for future and
provide them better return.

SIP and Lump sum are two techniques to invest money in mutual fund. People should not
confuse about them. Both are better themselves. When market is ups and down nature it is better
to invest their money through SIP another reason for SIP is because it is monthly investment so
when there are salaried person who want to invest money in mutual fund then SIP is good
technique because they have limited saving that’s why SIP is good for salaried persons.

I saw that there are many people who really don’t know what actually mutual fund means is. I
realized that there are many persons who don’t invest money in mutual fund they only invest in
insurance or fixed deposits.

I will suggest here that there is need of more advertising through canopies which will help to
those people who want to invest in mutual fund and will get more information through canopies.

Some people prefer to invest a lump sum when they have the money available - perhaps from a
bonus at work. The benefit is that you are less likely to spend the money on other things!

However, if you do not have a lump sum, you don't have to save up until you have a large
amount to invest. You can invest a relatively small amount every month that can build up into a
worthwhile nest egg. If you set up a monthly savings plan, you will soon come to think of your
regular payment as an essential part of your budget. What's more, you can benefit from a
phenomenon known as "rupee cost averaging", no matter how markets are performing:

 If the market goes up, the units you already own will increase in value.
 If the market goes down, your next payment will buy more units.

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9.1.Summary of trends in organization

 The Stock Holding Corporation of India (SHCIL), a provider of custodial, depository and
online trading services, is looking to float an initial public offering. The board of SHCIL
has given in-principle approval for the IPO and issued a request-for-proposal to appoint a
merchant banker. The process for the IPO of SHCIL is at preliminary stage.

 SHCIL and ArthaYantra have entered into a partnership to offer online wealth
management advisory services. Through this partnership, SHCIL plans to offer wealth
management financial planning as value-added services across over 80 branches.
ArthaYantra will offer personal financial advisory to SHCIL’s existing client base of
seven lakh customer.

 Stock holding has been consistently earning profit and declaring dividends right from its
inception. With a share capital of Rs.211 million, Stock holding`s tangible net worth
stands at Rs.12,271.5 million as on March 31, 2017

 SHCIL is a zero debt, financially sound company with healthy reserves. SHCIL has a
consistent dividend-paying track record.

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9.2.Summary of self-learning:

As a summer intern this experience was something new for me because I learnt to
communicate with the clients. And also pitched them for investments. As I have completed my
task on time this gave me more confidence to complete my task on or before time. I learnt
various things like punctuality, discipline, dedication towards the work of employees, etc.

Also get to know about the importance of investment which helps us in future. I learned that
different types of investment pattern is available for different age group of people. For example,
NPS (National Pension Schemes) is preferable for the person who wants to take benefit at the
time of their retirement.

As I have sold five SIP (Systematic Investment Plan) thus came to know the importance of
this which gives the habit of regular investment. Also sold the combo of trading and demat
account which gives the benefits of directly buying and selling of shares in the stock market.

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REFERENCES:

1. www.motilaloswal.com “Trends of systematic investment plan in India”


2. Kishorkumar Balpalli, (2016) “SIP v/s Lumpsum-investment.”
3. Reetika Tiwari (2010) “Comparative analysis of Systematic Investment Plan & Lumpsum
investment”
4. Prof. Naila Iqbal, (2011) ‘Challenges and issues faced by mutual fund industry’
Volume 2; Issue 2;

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Part C - Learnings and Takeaways

1. Application of concepts, tools, techniques and skills learnt at PiMSR

Being at PIMSR, I learned various new techniques and tools which helped me in understanding
organization and its market at whole such as, PESTEL analysis, SWOT analysis, porter’s generic
strategy, porter’s five forces analysis, BCG matrix, value chain analysis, and MCKINSEY 7s
framework, etc.

1. A PESTEL analysis is a framework used by marketers or companies to track the


environment they’re operating in, and to identify the macro (external) forces facing an
organization. Through this analysis, I learned the external environment of mutual fund
industry.
2. SWOT analysis is a framework used to evaluate a company's competitive position by
identifying its strengths, weaknesses, opportunities and threats. Specifically, SWOT
analysis is a foundational assessment model that measures what an organization can and
cannot do, and its potential opportunities and threats. I have applied the SWOT analysis
tools on the Stock Holding Corporation of India Limited (SHCIL).
3. Porter's generic strategies describe how a company pursues competitive advantage across
its chosen market scope. There are three/four generic strategies, either lower
cost, differentiated, or focus.
4. Porter’s five forces analysis is a tool for analyzing competition of a business. It draws
from industrial organization to derive five forces that determine the competitive intensity
and, therefore, the attractiveness (or lack of it) of an industry in terms of its profitability.
5. BCG matrix shows the organization product position in the market. This helps the
company allocate resources and is used as an analytical tool in brand marketing, product
management, strategic management, and portfolio analysis.
6. Skills that I learned communication skills, critical thinking, problem solving skills and
personal management skills.
All this tools or techniques actually helped me to know about the company or market in
depth.

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2. Mention new knowledge, tools, techniques or skills that you may have picked up.

 While working I learnt various elements about stock market such as how NIFTY and
SENSEX works as a benchmark. I learnt about how the orders takes place on terminal
(Buy and sell orders).
 I learnt a lot about Mutual Fund industry like what it is all about, how it functions, why it
is important, etc.
 Skills that i gained from their was team work and communication. i saw people working
in an organization with a good team work by supporting each other in their flaws and
communicating the problems to their subordinates so that it can be resolved as soon as
possible.
 I got to know how to behave professionally in the corporate and how to interact with
seniors and subordinates.
 I have also picked up some skills like how to behave professionally in corporate.
 Regarding this summer internship project I have made made application of-
-SWOT analysis
-PESTEL analysis
-Mc Kinsey 7s framework to know organization
-BCG matrix

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3. Any augmentation of soft skills such as building interpersonal relationships.

 Stockholding is an organization that deals with the investors or clients on day to day basis
which wants the organization to be well mannered and should carry good communication
skills in order to render good services.
 Today people want good service for which they do not mind even paying little more.
 I learnt about how the client should be treated and should be kept on top most priority on
our priority list because they are the apex of the business.
 Even one client is important for a business to grow because that one makes many by
word of mouth.
These are the things I learned while working in SHCIL.
 This internship has allowed me to test my knowledge and skills. It has helped me to
enhance my skills like:
1. Positive attitude
2. Good communication skills
3. Self confidence
4. Ability to accept and learn from criticism
5. Time management abilities
6. Strong work ethics

4. Any directions for future learning or career path that you may like to pursue.
 My main aim is to work in the banking sector which will allow me to deal with day to
day customers and will also keep me close from market.
 I also see my career pursuing in stock market i want to be always close from market so
bank and stock market will allow me the same and the learnings that I got from
Stockholding Corporation Of India Limited will be used their.
 As an intern in SHCIL, I learned the process of investment pattern and many more things
which should always be taken into consideration while investing.

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