DISSERTATION REPORT ENTITLED

A study on ANALYSIS OF EQUITIES AND MUTUAL FUNDS

Dissertation Submitted in Partial Fulfillment of the Requirement For the award of degree of
Master of Business Administration TO

Submitted By: DHANALAKSHMI.M Reg. No: 07P6CM6012 Under the Guidance of

Prof. B.MARIYAPPA

No.2/1, 9th Main, 2nd block, Jayanagar,Bangalore-560011

Student Declaration
I hereby declare this dissertation project a study on ANALYSIS OF
EQUITIES AND MUTUAL FUNDS IN INDIA INFOLINE is based on the original

work carried on by me under the guidance of Prof. B.MARIYAPPA towards the partial fulfillment of requirement for the award of Master of Business Administration of Bangalore University. I further declare that this project has not been submitted to any other University/ Institution elsewhere for the award of any degree/ diploma.

Place: Bangalore Date:

DHANALAKSHMI.M Reg No: 07PCM6012.

ACKNOWLEDGEMENT
I take this opportunity to express my sincere gratitude to our Dean Dr. H.V.S.Raghavan for providing me right kind of I also thank Dr. B.S SureshBabu (Director) for giving me the opportunity to explore my areas of interest by consistently lending support in terms of his expertise and also supplying valuable inputs in terms of resources every step of the way. Its my pleasure to thank Prof. B.Mariyappa for his guidance in this project. I am duty bound to thank Manager SHIVANAND.S External Guide for providing the information to complete the project. Words cant express my gratitude to my parents whose genuine interest and encouragement helped me a lot to this dissertation. Last but not least I thank to all the faculty members of CIMS College and my friends who have directly or indirectly helped me in the some way or the other in bringing out this dissertation. atmosphere, which helped me to complete my project successfully.

Place: Bangalore Date:

DHANALAKSHMI.M Reg No: 07PCM6012.

CONTENTS

2. CHAPTER NUMBER 1.

DESIGN OF THE STUDY TITLE

2.1 Introduction 2.2INTRODUCTION Title of the study 1.1 Equities 2.3 Statement of problem 1.2 Meaning of equities 2.4 Objectives of the study 1.3 Characteristics of 2.5 Scope of the study equities 1.4 Mutual funds 2.6 Methodology of research 1.5 Definition of mutual funds 2.7 Limitations of the study 1.6 History of mutual fund 2.8 Chapter scheme 1.7 Types of mutual fund

22-24 PAGE 1-21

NUMBER

ANALYSIS OF DATA 4.
Mutual funds 1.9 Dematerialization

1.8 Advantages and disadvantages of

37-54

5.

1.10 Rematerialization SUMMARY OF FINDINGS,

55-58

CONCLUSION AND RECOMMENDATIONS

6.

APPENDICES AND ANNEXURES

7.

BIBILIOGRAPHY

LIST OF TABLES PAGE NUMBER

4.1 Table showing Number of male & female respondents 4.2 Table showing Age group of respondents 4.3 Table showing Occupation of respondents 4.4 Table showing Sources of information created awareness to the respondents on equities & mutual funds. 4.5 Table showing Respondents opinion about type of investment 4.6 Table showing Respondents opinion about risk involved in equities and mutual funds. 4.7 Table showing Respondents main objective about investment in equities 4.8 Table showing Respondents main objective about investment in mutual funds 4.9 Table showing Respondents preference for scheme of investment 4.10 Table showing Respondents preference for sources of information on stocks or companies. 4.11 Table showing Respondents opinion about the return in their portfolio (equities). 4.12 Table showing Respondents preference to invest in mutual fund scheme 4.13 Table showing Respondents term of investment in mutual fund 4.14 Table showing Respondents term of investment in equities 4.15 Table showing Respondents opinion about mutual fund has tax saving plan & all long term mutual fund total return is tax free 4.16 Table showing Respondents opinion about long term investment in equity and its total return is tax free 37 38 39 40 41 42 43 45 47 48 49 50 51 52 53 54

LIST OF GRAPHS

PAGE NUMBER

4.1Graph showing Number of male & female respondents 4.2 Graph showing Age group of respondents 4.3 Graph showing Occupation of respondents 4.4 Graph showing Sources of information created awareness to the respondents on equities & mutual funds. 4.5 Graph showing Respondents opinion about type of investment 4.6 Graph showing Respondents opinion about risk involved in equities and mutual funds. 4.7 Graph showing Respondents main objective about investment in equities 4.8 Graph showing Respondents main objective about investment in mutual funds 4.9 Graph showing Respondents preference for scheme of investment 4.10 Graph showing Respondents preference for sources of information on Stocks or companies. 4.11 Graph showing Respondents opinion about the return in their portfolio (Equities). 4.12 Graph showing Respondents preference to invest in mutual fund scheme 4.13 Graph showing Respondents term of investment in mutual fund 4.14 Graph showing Respondents term of investment in equities 4.15 Graph showing Respondents opinion about mutual fund has tax saving plan & all long term mutual fund total return is tax free 4.16 Graph showing Respondents opinion about long term investment in equity and its total return is tax free

37 38 39 40 41 42 43 45 47 48 49 50 51 52 53 54

EXECUTIVE SUMMARY
Financial markets main function is to facilitate transfer of funds from surplus sectors to deficit sectors. A financial market consists of investor or buyers, sellers, dealers and does not refer to any physical location. Indian financial system consists of two markets, viz.

money and capital market. The core of money market is the inter-bank call money market. It has two components - organised and unorganised. Capital market provides the framework in which savings and investments take place. On one hand it enables companies to raise resources from the investing community and on the other, it facilitate households to invest their savings in industrial or commercial activities. The capital market consists of primary and secondary segments. In primary market it deals with the issue of new instruments by the corporate sector such as equity shares, preference shares, and debentures. The secondary market or stock exchanges are where existing Securities are traded. Capital market plays a major role in Indian financial system.

So, Equities & mutual fund is the part of capital market. Mutual fund industry in India began with setting up of Unit Trust of India (UTI) in 1964 by the Government of India. Now a day mutual fund is playing very important role in the industry. Investors will get the benefit of return, capital appreciation, tax benefits and safety to there investment and companies will get the capital for there growth. Recently they have also started Systematic Investment Plan(SIP) with the help of this even small investors including students can start investing with minimum of Rs 100, by this even students can also invest in this fund. So, we came to know how this mutual fund works.

India Infoline also provides services of Equity Broking & Mutual Fund. This company was incorporated under the Companies Act, on October 18, 1995 as Probity Research & services. India Infoline Company acts as a broker for trading the shares of the company. India Infoline is a Depository Participant registered with the National Securities Depository Limited (NSDL) as well as Central Depository Security Limited (CDSL). This company

provides services like Equity research, Equities and derivatives trading, Commodities trading, Portfolio Management Services, Mutual Funds, Life Insurance, Fixed deposits, GOI bonds and other small savings instruments to loan products and Investment. Study is conducted in India Infoline Ltd Bangalore. On the topic of Analysis of Equities & Mutual Funds. The main objective of the study is to know the investor perception towards Equities & Mutual funds. I have taken a necessary data by the Investors as well as Non Investors, to make an analysis on Equities & Mutual fund scheme.

INTRODUCTION

1. INTRODUCTION 1.1 EQUITIES

Equity investment generally refers to the buying and holding of shares of stock on a stock market by individuals and funds in anticipation of income from dividends and capital gain as the value of the stock rises. It also sometimes refers to the acquisition of equity (ownership) participation in a private (unlisted) company or a startup (a company being created or newly created). When the investment is in infant companies, it is referred to as venture capital investing and is generally understood to be higher risk than investment in listed going-concern situation. To try to identify good shares to invest in, two main schools of thought exist: Technical analysis and Fundamental analysis. The former involves the study of the price history of a share(s) and the price history of the stock market as a whole; technical analysts have developed an array of indicators, some very complex, that seek to tease useful information from the price and volume series. Fundamental analysis involves study of all pertinent information relevant to the stock and market in question in an attempt to forecast future business and financial developments including the likely trajectory of the share price(s) itself. The fundamental information studied will include the annual report and accounts, industry data (such as sales and order trends) and study of the financial and economic environment (e.g. the trend of interest rates) Ultimately, at any given moment, equitys price is strictly a result of supply and demand. The supply is the number of shares offered for sale at any one moment. The demand is the number of shares investors wish to buy exactly at that same time. The price of the stock moves in order to achieve and maintain equilibrium. When buyers outnumber sellers, the price rises. Eventually, sellers attracted to the high selling price enter the buyers leave, achieving equilibrium between buyers and sellers. market and/or

When sellers outnumber buyers, the price falls. Eventually buyers enter and/or sellers leave, again achieving equilibrium. Thus, what a share of a company at any given moment is determined by all investors voting with their money. If more investors want a stock and are willing to pay more, the price will go up. If more investors are selling a stock and there aren't enough buyers, the Price will go down. Investment in shares of companies is investing in equities. Stocks can be bought/sold from the exchanges (secondary market) or via IPOs Initial Public Offerings (primary market). Stocks are the best long-term investment options wherein the market volatility and the resultant risk of losses, if given enough time, is mitigated by the general upward momentum of the economy. There are two streams of revenue generation from this form of investment.

1. Dividend: Periodic payments made out of the company's profits are termed as
dividends.

2. Growth: The price of a stock appreciates commensurate to the growth posted by the
company resulting in capital appreciation. On an average an investment in equities in India has a return of 25%. Good portfolio management, precise timing may ensure a return of 40% or more. Picking the right stock at the right time would guarantee that your capital gains i.e. growth in market value of your stock possessions, will rise.

1.2 Meaning of Equities

Equities are also known as Shares and are from point of view of investment more risky than other. Equities have the potential to Increase in value over time. It also provides your portfolio with the growth necessary to reach your long term investment goals. Research studies have proved that the equities have outperformed than most other forms of investments in the long term like Mutual fund.

1.3 Characteristics of Equities

Voting Right: The equity stocks carry with them, a special right of voting for the members owning equity shares, a right to receive a notice of the Annual General Body Meeting every year, the right to be elected members of the Executive Committee and become a director of the company on purchasing qualification shares. They are considered to be superior than both bondholders and preference stockholders Owners Right: The equity stockholders are also the owners of the firm. Each stock holder receives an ownership right equivalent to the stock that he holds in the firm. The total stock of a company is divided and every stockholder has the right to be member of the company. He is, however, limited according to the investment he makes in the company. His existence in the company is perpetual as there is no maturity date or redemption date of an equity stock. The equity stockholder has the right of ownership till the lifetime of the company. Par Valve: An equity stock has a face value which is also called the par value of the stock. Equity stock may be sold or issued at a premium or at a discount but the face value will be the denomination. It shows the face liability of an investor. Right Shares: The shareholder has a right of receiving additional shares whenever they are issued by the company. Shares are offered to the existing shareholders and on their refusal can be offered to others. Sometimes, some amount is reserved for the existing shareholders and then an issue is made by the company.

Types of stock
Stock typically takes the form of shares of common stock (or voting shares). As a unit of ownership, common stock typically carries voting rights that can be exercised in corporate decisions. Preferred stock differs from common stock in that it typically does not carry voting rights but is legally entitled to receive a certain level of dividend payments before any dividends can be issued to other shareholders. Convertible preferred stock is preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Shares of such stock are called "convertible preferred shares". Although there is a great deal of commonality between the stocks of different companies, each new equity issue can have legal clauses attached to it that make it dynamically different from the more general cases. Some shares of common stock may be issued without the typical voting rights being included, for instance, or some shares may have special rights unique to them and issued only to certain parties. These case-by-case variations in the specific form of stock issuance are beyond the scope of this article, except to note that not all equity shares are the same.

Stock derivative
A stock derivative is any financial instrument which has a value that is dependent on the price of the underlying stock. Futures and options are the main types of derivatives on stocks. The underlying security may be a stock index or an individual firm's stock, e.g. futures. Stock futures are contracts where the buyer is long, i.e., takes on the obligation to buy on the contract maturity date, and the seller is short, i.e., takes on the obligation to sell. Stock index futures are generally not delivered in the usual manner, but by cash settlement. A stock option is a class of option. Specifically, a call option is the right to buy stock in the future at a fixed price and a put option is the right to sell stock in the future at a fixed price. Thus, the value of a stock option changes in reaction to the underlying stock of which it is a derivative. Apart from call options granted to employees, most stock options are transferable.

Shareholder
A shareholder (or stockholder) is an individual or company (including a corporation) that legally owns one or more shares of stock in a joint stock company. Companies listed at the stock market are expected to strive to enhance shareholder value. Shareholders are granted special privileges depending on the class of stock, including the right to vote (usually one vote per share owned) on matters such as elections to the board of directors, the right to share in distributions of the company's income, the right to purchase new shares issued by the company, and the right to a company's assets during a liquidation of the company. However, shareholder's rights to a company's assets are subordinate to the rights of the company's creditors. This means that shareholders typically receive nothing if a company is liquidated after bankruptcy (if the company had enough to pay its creditors, it would not have entered bankruptcy), although a stock may have value after a bankruptcy if there is the possibility that the debts of the company will be restructured. Shareholders are considered by some to be a partial subset of stakeholders, which may include anyone who has a direct or indirect equity interest in the business entity or someone with even a non-pecuniary interest in a non-profit organization. Thus it might be common to call volunteer contributors to an association stakeholders, even though they are not shareholders.

Application
The owners of a company may want additional capital to invest in new projects within the company. They may also simply wish to reduce their holding, freeing up capital for their own private use. By selling shares they can sell part or all of the company to many part-owners. The purchase of one share entitles the owner of that share to literally share in the ownership of the company, a fraction of the decision-making power, and potentially a fraction of the profits, which the company may issue as dividends.

In the common case of a publicly traded corporation, where there may be thousands of shareholders, it is impractical to have all of them making the daily decisions required to run a company. Thus, the shareholders will use their shares as votes in the election of members of the board of directors of the company. In a typical case, each share constitutes one vote. Corporations may, however, issue different classes of shares, which may have different voting rights. Owning the majority of the shares allow other shareholders to be out-voted - effective control rests with the majority shareholder. In this way the original owners of the company often still have control of the company.

Trading
A stock exchange is an organization that provides a marketplace for either physical or virtual trading shares, bonds and warrants and other financial products where investors (represented by stock brokers) may buy and sell shares of a wide range of companies. A company will usually list its shares by meeting and maintaining the listing requirements of a particular stock exchange and the different.

Buying
There are various methods of buying and financing stocks. The most common means is through a stock broker. Whether they are a full service or

discount broker, they arrange the transfer of stock from a seller to a buyer. Most
trades are actually done through brokers listed with a stock exchange, such as the

New York Stock Exchange.

There are many different stock brokers from which to choose, such as full service brokers or discount brokers. The full service brokers usually charge more per trade, but give investment advice or more personal service; the discount brokers offer little or no investment advice but charge less for trades. Another type of broker would be a bank or credit union that may have a deal set up with either a full service or discount broker.

There are other ways of buying stock besides through a broker. One way is directly from the company itself. If at least one share is owned, most companies will allow the purchase of shares directly from the company through their investor relations departments. However, the initial share of stock in the company will have to be obtained through a regular stock broker. Another way to buy stock in companies is through Direct Public Offerings which are usually sold by the company itself. A direct public offering is an initial public offering in which the stock is purchased directly from the company, usually without the aid of brokers. When it comes to financing a purchase of stocks there are two ways: purchasing stock with money that is currently in the buyers ownership, or by buying stock on margin. Buying stock on margin means buying stock with money borrowed against the stocks in the same account. These stocks, or collateral, guarantee that the buyer can repay the loan; otherwise, the stockbroker has the right to sell the stock (collateral) to repay the borrowed money. He can sell if the share price drops below the margin requirement, at least 50% of the value of the stocks in the account. Buying on margin works the same way as borrowing money to buy a car or a house, using the car or house as collateral. Moreover, borrowing is not free; the broker usually charges 8-10% interest.

Selling
Selling stock is procedurally similar to buying stock. Generally, the investor wants to buy at low and sell at high, if not in that order (short selling); although a number of reasons may induce an investor to sell at a loss, e.g., to avoid further loss. As with buying a stock, there is a transaction fee for the broker's efforts in arranging the transfer of stock from a seller to a buyer. This fee can be high or low depending on which type of brokerage, full service or discount, handles the transaction. After the transaction has been made, the seller is then entitled to all of the money. An important part of selling is keeping track of the earnings. Importantly, on selling the stock, in jurisdictions that have them, capital gains taxes will have to be paid on the additional proceeds, if any, that are in excess of the cost basis.

Long/short equity
Is an investment strategy generally associated with hedge funds. It involves buying long equities that are expected to increase in value and selling short equities that are

expected to decrease in value. Typically equity long short investing is based on 'bottom up' fundamental analysis of the individual companies in which investments are made. There may also be 'top down' analysis of the risks and opportunities offered by industries, sectors, countries and the macroeconomic situation. Long short covers a wide variety of strategies. There are generalists, and managers who focus on certain industries and sectors or certain regions. Managers may specialize in a kind of stock, for example value or growth, small or large. There are many trading styles, with frequent or dynamic traders and some longer term investors. A fund manager typically attempts to reduce volatility by either diversifying or hedging positions across individual regions, industries, sectors and market capitalization bonds and hedging against un-diversifiable risk such as market risk. In addition to being required of the portfolio as a whole, neutrality may in addition be required for individual regions, industries, sectors and market capitalization bonds.

1.4 MUTUAL FUND

A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.

1.5 Definition of Mutual FundThe SEBI (MF) Regulations, 1993 defines mutual fund as A fund established in the form of a trust by a sponsor to raise monies by the trustees through the sale of units to

the public under one or more schemes for investing in securities in accordance with these regulations.

Mutual Fund IndustryMutual fund industry in India began with setting up of Unit Trust of India (UTI) in 1964 by the Government of India. During last 39 years UTI has grown to be a dominant player in the industry. The UTI is governed by a special legislation, the Unit Trust of India Act 1963. In 1987 public sector banks and insurance companies were permitted to set up mutual funds and accordingly in 1987 six public sectors banks have set up mutual funds. Also the two insurance companies LIC and GIC established the mutual funds. Securities Exchange Board of India (SEBI) formulated the mutual fund regulation in 1993, which for the first time established a comprehensive regulatory framework for the mutual fund industry. Since then several mutual funds have been set up by the private and joint sectors.

1.6 History of Mutual FundThe mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank. The history of mutual funds in India can be broadly divided into four distinct phases. First Phase 1964-87 Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets under management.

Second Phase 1987-1993 (Entry of Public Sector Funds) 1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first Non- UTI Mutual Fund established in June 1987 followed by Can bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990. Third Phase 1993-2003 (Entry of Private Sector Funds) With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. Fourth Phase since February 2003 In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.29, 835 corers as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other Schemes. The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations.

The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had more than Rs.76, 000 crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth.

Concept of Mutual Fund-

Steps of concepts of Mutual Fund1. Many investors with the common objective pool their money in Mutual Fund. 2. Investors on a proportionate basis, get mutual fund units for the sum contributed to the pool. 3. The money collected by the investors is invested into the shares, debentures and other securities by the Fund Manager. 4. The Fund manager realizes gains or losses, and collects dividends or interest Income. 5. Any capital gains or losses from such investment are passed on to the Investors in proportion of the number of units held by them. Any change in the value of the investments made into capital market instruments (such as shares, debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. NAV is defined as the market value of the Mutual Fund scheme's assets net of its liabilities.

NAV of a scheme is calculated by dividing the market value of scheme's assets by the total number of units issued to the investors.

For example:
A. If the market value of the assets of a fund is Rs. 100,000 B. The total number of units issued to the investors is equal to 10,000. C. Then the NAV of this scheme = (A)/(B), i.e. 100,000/10,000 or 10 D. Now if an investor 'X' owns 5 units of this scheme. Then his total contribution to the fund is Rs. 50 (i.e. Number of units held multiplied by the NAV of the scheme)

Organization of a Mutual fund

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

1.7 Types of Mutual Fund schemes-

A. Schemes according to Maturity Period:

A mutual fund scheme can be classified into open-ended scheme or close-ended scheme depending on its maturity period.

Open-ended Fund/ Scheme

An open-ended fund or scheme is one that is available for subscription and repurchase on a continuous basis. These schemes do not have a fixed maturity period. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices which are declared on a daily basis. The key feature of open-end schemes is liquidity.

Close-ended Fund/ Scheme

A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is open for subscription only during a specified period at the time of launch of the scheme. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where the units are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the mutual funds NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor i.e. either repurchase facility or through listing on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis.

B. Schemes according to Investment Objective:

A scheme can also be classified as growth scheme, income scheme, or balanced scheme considering its investment objective. Such schemes may be open-ended or closeended schemes as described earlier. Such schemes may be classified mainly as follows.

1 Equity Funds-

Equity funds are considered to be the more risky funds as compared to other fund types, but they also provide higher returns than other funds. It is advisable that an investor looking to invest in an equity fund should invest for long term i.e. for 3 years or more. There are different types of equity funds each falling into different risk bracket. In the order of decreasing risk level, there are following types of equity funds: Growth Funds - Growth Funds also invest for capital appreciation (with time horizon of 3 to 5 years) but they are different from Aggressive Growth Funds in the sense that they invest in companies that are expected to outperform the market in the future. Without entirely adopting speculative strategies, Growth Funds invest in those companies that are expected to post above average earnings in the future. Sector Funds: Equity funds that invest in a particular sector/industry of the market are known as Sector Funds. The exposure of these funds is limited to a particular sector (say Information Technology, Auto, Banking, Pharmaceuticals ). Fast Moving Consumer Goods) which is why they are more risky than equity funds that invest in multiple sectors. Mid-Cap or Small-Cap Funds: Funds that invest in companies having lower market capitalization than large capitalization companies are called Mid-Cap or Small-Cap Funds. Market capitalization of Mid-Cap companies is less than that of big, blue chip companies (less than Rs. 2500 crores but more than Rs. 500 crores) and Small-Cap companies have market capitalization of less than Rs. 500 crores. Market Capitalization of a company can be calculated by multiplying the market price of the company's share by the total number of its outstanding shares in the market. The shares of Mid-Cap or Small-Cap Companies are not as liquid as of Large-Cap Companies which gives rise to volatility in share prices of these companies and consequently, investment gets risky.

Equity Linked Saving Scheme: These funds are well diversified and reduce sector-specific or company-specific risk. However, like all other funds diversified equity funds too are exposed to equity market risk. One prominent type of

diversified equity fund in India is Equity Linked Savings Schemes (ELSS). As per the mandate, a minimum of 90% of investments by ELSS should be in equities at all times. ELSS investors are eligible to claim deduction from taxable income (up to Rs 1 lakh) at the time of filing the income tax return. ELSS usually has a lock-in period and in case of any redemption by the investor before the expiry of the lockin period makes him liable to pay income tax on such income(s) for which he may have received any tax exemption(s) in the past. Dividend Yield Funds :The objective of Equity Income or Dividend Yield Equity Funds is to generate high recurring income and steady capital appreciation for investors by investing in those companies, which issue high dividends. Equity Income or Dividend Yield Equity Funds are generally exposed to the lowest risk level as compared to other equity funds. Gold Fund: The objective of this fund is accumulating the money at the gold rate according to the units held by the investors. This is one of the new fund introduced. Here all the investors will invest for the pool account of mutual fund and that amount is invested in the gold. And according to the fluctuation of the rates of gold in the market, fund manager invest when rates are good, thus profit earned from this gold fund is distributed according to the units held by the investors

2. Debt fundsFunds that invest in medium to long-term debt instruments issued by private companies, banks, financial institutions, governments and other entities belonging to various sectors (like infrastructure companies etc.) are known as Debt / Income Funds. Debt funds are low risk profile funds that seek to generate fixed current income (and not capital appreciation) to investors. In order to ensure regular income to investors, debt (or income) funds distribute large fraction of their surplus to investors. Although debt securities are generally less risky than equities, they are subject to credit risk (risk of default) by the issuer at the time of interest or principal payment. To minimize the risk of default, debt funds usually invest in securities from issuers who are rated by credit rating agencies and are considered to be of "Investment Grade". Debt funds that target high

returns are more risky. Based on different investment objectives, there can be following types of debt funds: Diversified Debt Funds - Debt funds that invest in all securities issued by entities belonging to all sectors of the market are known as diversified debt funds. The best feature of diversified debt funds is that investments are properly diversified into all sectors which results in risk reduction. Any loss incurred, on account of default by a debt issuer, is shared by all investors which further reduces risk for an individual investor. High Yield Debt funds - As we now understand that risk of default is present in all debt funds, and therefore, debt funds generally try to minimize the risk of default by investing in securities issued by only those borrowers who are considered to be of "investment grade". But, High Yield Debt Funds adopt a different strategy and prefer securities issued by those issuers who are considered to be of "below investment grade". The motive behind adopting this sort of risky strategy is to earn higher interest returns from these issuers. These funds are more volatile and bear higher default risk, although they may earn at times higher returns for investors. Assured Return Funds - Although it is not necessary that a fund will meet its objectives or provide assured returns to investors, but there can be funds that come with a lock-in period and offer assurance of annual returns to investors during the lock-in period. Any shortfall in returns is suffered by the sponsors or the Asset Management Companies (AMCs). These funds are generally debt funds and provide investors with a low-risk investment opportunity. To safeguard the interests of investors, SEBI permits only those funds to offer assured return schemes whose sponsors have adequate net-worth to guarantee returns in the future. In the past, UTI had offered assured return schemes (i.e. Monthly Income Plans of UTI) that assured specified returns to investors in the future. UTI was not able to fulfill its promises and faced large shortfalls in returns. Eventually, government had to intervene and took over UTI's payment obligations on itself. Currently, no AMC in India offers assured return schemes to investors, though possible.

 Fixed Term Plan Series - Fixed Term Plan Series usually are closed-end schemes having short-term maturity period (of less than one year) that offer a series of plans and issue units to investors at regular intervals. Unlike closed-end funds, fixed term plans are not listed on the exchanges. Fixed term plan series usually invest in debt / income schemes and target short-term investors. The objective of fixed term plan schemes is to gratify investors by generating some expected returns in a short period.

3. Balanced FundA balanced fund is one that has a portfolio comprising debt instruments, convertible securities, and Preference equity shares. Their assets are generally held in more or less equal proportions between debt/money market securities and equities. By investing in a mix of this nature, balanced funds seek to attain the objectives of income, moderate capital appreciation and preservation of capital, and are ideal for investors with a conservative and long-term orientation.

1.8 ADVANTAGES AND DISADVANTAGES OF MUTUAL FUNDS

ADVANTAGES

Portfolio Diversification: Mutual Funds invest in a well-diversified portfolio of

securities which enables investor to hold a diversified investment portfolio (whether the amount of investment is big or small). 1. Professional Management : Fund manager undergoes through various research works and has better investment management skills, which ensure higher returns to the investor than what he can manage on his own. 2.

Less Risk: Investors acquire a diversified portfolio of securities even with a small
investment in a Mutual Fund. The risk in a diversified portfolio is lesser than investing in merely 2 or 3 securities

3. Low Transaction Costs: Due to the economies of scale (benefits of larger volumes), mutual funds pay lesser transaction costs. These benefits are passed on to the investors. 4. Flexibility: Investors also benefit from the convenience and flexibility offered by Mutual Funds. Investors can switch their holdings from a debt scheme to an equity scheme and vice-versa. Option of systematic (at regular intervals) investment and withdrawal is also offered to the investors in most open-end schemes 5. Safety: Mutual Fund industry is part of a well-regulated investment environment where the interests of the investors are protected by the regulator. All funds are registered with SEBI and complete transparency is forced.

DISADVANTAGES
Cost control not in the Hands of an Investor : Investor has to pay investment
management fees and fund distribution costs as a percentage of the value of his investments (as long as he holds the units), irrespective of the performance of the fund. 1. No Customized Portfolios: The portfolio of securities in which a fund invests is a decision taken by the fund manager. Investors have no right to interfere in the decision making process of a fund manager, which some investors find as a constraint in achieving their financial objectives.

2. Difficulty in Selecting a Suitable Fund Scheme : Many investors find it difficult to select one option from the plethora of funds/schemes/plans available.

1.9 Dematerialization
One of the methods for preventing all the problems that occur with physical securities is through Dematerialization (demat). The share certificates are shredded (i.e., its paper form is destroyed) and a corresponding credit entry of the number of securities (written on the certificates) is made in the account opened with the Depository Participant (DP).Each security is identified in the depository system by ISIN and short name. Steps in Dematerialization of shares 1. Client/Investor submits the DRF (Demat Request Form) and physical certificates to DP. DP checks whether the securities are available for Demat. Client defaces the certificate by stamping Surrendered for Dematerialization. DP punches two holes on the name of the company and draws two parallel lines across the face of the certificate. 2. DP enters the demat request in his system to be sent to NSDL. DP dispatches the physical certificates along with the DRF to the R&T Agent. 3. NSDL records the details of the electronic request in the system and forwards the request to the R&T Agent. 4. R&T Agent, on receiving the physical documents and the electronic request, verifies and checks them. Once the R&T Agent is satisfied, Dematerialization of the concerned securities is electronically confirmed to NSDL. 5. NSDL credits the dematerialized securities to the beneficiary account of the investor and intimates the DP electronically. The DP issues a statement of transaction to the client.

1.10 Rematerialisation
Rematerialisation is the exact reverse of dematerialization. It refers to the process of issuing physical securities in place of the securities held electronically in book-entry form

with a depository. Under this process, the depository account of a beneficial owner is debited for the securities sought to be re-materialized and physical certificates for the equivalent number of securities is/are issued. The beneficial owner desiring to receive physical security certificates in place of the electronic holding should make a request to the issuer or its R&T Agent through his DP in the prescribed Rematerialisation request form (RRF). Trading and Settlement One of the basic services provided by NSDL is to facilitate transfer of securities from one account to another at the instruction of the account holder. In NSDL depository system both transferor and transferee have to give instructions to its depository participants [DPs] for delivering [transferring out] and receiving of securities. However, transferee can give 'Standing Instructions' [SI] to its DP for receiving in securities. Transfer of securities from one account to another may be done for any of the following purposes: Transfer due to a transaction done on a person to person basis is called offmarket transaction. Transfer arising out of a transaction done on a stock exchange. Transfer arising out of transmission and account closure.

Settlement of off-Market transaction Steps in settlement of off-market transaction

1. Seller gives delivery instructions to his DP to move securities from his account to the buyer's account.

2. Buyer automatically receives the credit of the securities into his account on the basis of standing instruction for credits. 3. Buyer receives credit of securities into his account only if he gives receipt instructions, if standing instructions have not been given. 4. DP needs to be extra careful in verifying the signature of the client if unusual quantities of securities are being debited to the account 5. Funds move from buyer to seller outside the NSDL system. Settlement of Market transaction

1. Seller gives delivery instructions to his DP to move securities from his account to his broker's account. 2. Securities are transferred from broker's account to CC on the basis of a delivery out instruction. 3. On pay-out, securities are moved from CC to buying broker's account. 4. Buying broker gives instructions and securities move to the buyer's account. 5. Transfer of securities towards settlement of transactions done on a stock exchange is called settlement of market transaction

DESIGNOF THE STUDY

2. DESIGN OF THE STUDY

2.1 INTRODUCTION
A systematized study requires proper planning and implementation of the same. So, this research design includes an outline of the study, which is conducted at India Infoline Limited Bangalore. The design of the study contains information stating the statement of the problem, objectives of the study, need for the study, and scope of the study, significance of the study, research methodology, and sources of data, tools and techniques of data collection, plan of analysis, limitations of the study.

2.2 TITLE OF THE STUDY Project Report on Analysis of Equities & Mutual fund With reference to India
Infoline Limited Bangalore.

2.3 STATEMENT OF THE PROBLEM

The project has been undertaken with the aim of Analysis of Equities and Mutual funds of the India Infoline Ltd. And also to analyze how the operation has been undertaken to communicate with the client & how the services is offered by the company. This operations may involved the following problems The operations involved in India Infoline Ltd. Differences between Equities & Mutual funds operations and Mutual understanding between company & its clients.

2.4 Objectives of the study

The research is undertaken with an objective to know the following aspects: To study the concept of Equities & mutual funds. To know the awareness level of Equities & mutual funds And the parameters the people look in while investing in it. To study the Investor and Non Investor perception towards Equities & mutual fund To find whether investment in Equities is better or mutual fund is better

2.5 Scope of the study

To gain new and valid ideas. To gain more knowledge, by direct and personal experience. To know the actual importance of this research. To learn more about research methods and their application in practice.

2.6 Methodology of Research

I. Type of Research
The research carried out in this study is both exploratory and descriptive in nature.

II. Sample size

Convenience sampling has been adopted for the study. The sample size taken up for the study is 50 respondents. The respondents include professionals, Employees, Business man, Retired people.

III. Tool for data collection

The study is done based on the collection of primary & secondary data. Primary Data: Primary data was collected with the use of questionnaire and personal interaction with the company employees & others.

 Secondary Data: Secondary data was collected by: Referring several books on equities & mutual funds. Referring company Broachers, journals, etc. Business standard news paper.

2.7 Limitations of the Study

The main limitation of my project is, Sample size is only 50. This survey is only to certain period of time. Information is collected through questionnaire & personal interaction only. Actual perception of respondents may differ and Study restricted to Bangalore city only.

2.8 Chapter Scheme

1. First chapter covers executive summary, about the subject, introduction to equities, meaning, characteristics, types of stock, stock derivative, share holder, application, trading, buying, selling, introduction to mutual fund, definition, about the industry, history of mutual fund, concept of mutual fund, steps, organization of a mutual fund, types of mutual fund schemes, advantages and disadvantages of mutual funds, dematerialization, rematerialization, settlement of market transaction. 2. Second chapter design of the study includes introduction, statement of the problem, objectives of the study, scope of the study, methodology of research, limitations of the study. 3. Third chapter covers the profile of the company. 4. Fourth chapter covers analysis of data. 5. Fifth chapter includes summary of findings, suggestions and conclusions. Lastly Annexure and the Bibliography are enclosed.

COMPANY PROFILE

3. COMPANY PROFILE 3.1 INTRODUCTON

The India Infoline group, comprising the holding company, India Infoline Limited and its wholly-owned subsidiaries, straddle the entire financial services space with offerings ranging from Equity research, Equities and derivatives trading, Commodities trading, Portfolio Management Services, Mutual Funds, Life Insurance, Fixed deposits, GOI bonds and other small savings instruments to loan products and Investment banking. India Infoline also owns and manages the websites http://www.indiainfoline.com/and http://www.5paisa.com/ The company has a network of 596 branches spread across 345 cities and towns. It has more than 500,000 customers. India Infoline Limited is listed on both the leading stock exchanges in India, viz. the Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges.

It is engaged in the businesses of Equities broking, Wealth Advisory Services and Portfolio Management Services. It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE. It is registered with NSDL as well as CDSL as a depository participant, providing a one-stop solution for clients trading in the equities market. It has recently launched its Investment banking and Institutional Broking business. The company was originally incorporated on October 18, 1995 as Probity Research and Services Private Limited at Mumbai under the Companies Act, 1956 with Registration No.11 93797. They commenced their operations as an independent provider of information, analysis and research covering Indian businesses, financial markets and economy, to institutional customers. They became a public limited company on April 28, 2000 and the name of the Company was changed to Probity Research and Services Limited. The name of the Company was changed to India Infoline.com Limited on May 23, 2000 and later to India Infoline Limited on March 23, 2001.In 1999, they identified the potential of the Internet to cater to a mass retail segment and transformed their business model from providing information services to institutional customers to retail customers. Hence they launched their Internet portal, www.indiainfoline.com in May 1999 and started providing news and market information, independent research, interviews with business leaders and other specialized features. In May 2000, the name of their Company was changed to India Infoline.com Limited to reflect the transformation of their business. Over a period of time, they have emerged as one of the leading business and financial information services provider in India. In the year 2000, they leveraged their position as a provider of financial information and analysis by diversifying into transactional services, primarily for online trading in shares and securities and online as well as offline distribution of personal financial products, like mutual funds and RBI Bonds. These activities were carried on by their wholly owned subsidiaries. Their broking service was launched under the brand name of 5paisa.com through their subsidiary. India Infoline Securities Private Limited and www.5paisa.com, the e-broking portal, was launched for online trading in July 2000. It combined competitive

brokerage rates and research, supported by Internet technology. Besides investment advice from an experienced team of research analysts, company is also of real time stock quotes, market news and price charts with multiple tools for technical analysis.

3.2 Key Milestones

Incorporated on October 18, 1995 as Probity Research & Services. Launched Internet portal www.indiainfoline.com in may 1999. Commenced distribution of personal financial products like Mutual Funds and RBI Bonds in April 2000. Launched online trading in shares and securities branded as www.5paisa.com in July 2000. Started life insurance agency business in December 2000 as a Corporate Agent of ICICI Prudential Life Insurance. Became a Depository participant of NSDL in September 2001. Launched stock messaging service in May 2003. Acquired commodities broking license in March 2004. Launched portfolio management services in August 2004. Listed on NSE and BSE on May 17, 2005. Acquired NBFC license in May 2005. Acquired 75% stake holding in Moneytree consultancy services, which is a distributor of Mortgages and other Loan products, in October 2005. Acquired 100% equity of Marchmont Capital Advisors Pvt Ltd in December 2005 through which we have Merchant Banking. DSP Merrill Lynch Capital subscribed to convertible bonds aggregating Rs. 80 crores in December 2005. Bennett Coleman & Co Ltd (BCCL) invested Rs. 20 crores in India Infoline by way of preferential allotment in December 2005. Became a Depository participant of CDSL in June 2006. Merger of India Infoline Securities Private Limited with India Infoline Limited in January 2007. IRDA license for Insurance Broking in April 2007.

3.3 Objectives of India Infoline

To emerge as the most respected financial service company in India To be respected by their stakeholders. To provide excellence research and service. To adding more product lines, more channels and probably expand overseas as well. To motivate and support to their team members to perform better.

3.4 Vision
Their vision is to be the most respected company in the financial services space.

3.5 Culture and Core Values

Owner Mindset (OM) - Owner Mindset is one of the key principles that drives life at India Infoline. Every member of team India Infoline behaves thinks and acts as owners not as employees. Energy The single most important attribute we look for when we hire people is energy. Nobody can drive a business of his own or feel an owner unless he is gifted with unbounded energy. And as we build an organization full of people charged up with positive energy. Things move at lightning pace. Even if per chance anybody lacking energy has got into our team, he / she will either get charged up by the infectious energy or get fired. This means, he / she will find it difficult to survive. Execution It is the difference between dreaming and making it happen. At India Infoline, all activities are assessed on the basis of 0 and 1 where 0 signifies work not done and 1 signifies work completed fully and on time. Excuses / reasons for non completion of tasks are not acceptable. Effort It is rightly said, Choose a job you love and you wont to have to work a day in your life. Those who work for the sake of working and endure the time they spend at work instead of enjoying it, eventually get de-motivated and leave their

jobs for something that does interest them. From organizations perspective, its not the NUMBER of hours you spend at work that matter, but the QUALITY of work that you put into those hours. Ethics Ethics pertain to the character of a person. Ethics is something on which there can never be any compromise in India Infoline.We have elaborated on our vision to become the most respected company in the financial services space in India and no one can respect an unethical organization. Excellence Excellence is all about the quality of work. We strive for delivery that is 100% error free and yet at lightning speed. Excellence deals with the quality of work. We have seen that there are people who get things done right in the very first time, thereby making it first time right (FTR). Application of mind Application of mind is the one magic formula to solve all problems. You should always apply your mind on how your efforts and goals are aligned to that of the company and how they contribute to the final business goal. We have a very open culture- when in doubt always ask questions to seek clarity. Remember, to succeed at India Infoline always apply your mind like an owner and come up with out-of box solutions.

3.6 Strategy
Their business plan is to become the leading investment advisor and intermediary for financial services in India. The key driver is to increase their customer base in all their products, give them a platform of choice to transact and support them with quality research. The elements of their strategy include: One Stop Shop from advice to transactions They have emerged as one of Indias leading financial information Internet portal in India. They distribute mutual funds and life insurance products through our branches as well as directly through their sales team. These factors allow them to provide their customers with an integrated online as well as offline solution to fulfill all their financial information and transaction needs. They believe that their ability to offer multiple products across broking to insurance to mutual funds to commodities to small savings differentiates them from their competition. This also offers significant cross selling opportunities which will help in

improving margins as incremental revenue will entail lower customer acquisition and promotion costs. Multi channel delivery model They intend providing a single convenient and reliable platform from which their users can obtain information, trade online or purchase offline a wide range of personal financial products. Their branches have been opened in cities after a detailed study of demographics and investment patterns. Their offline network today covers cities that account for 90.33% of trading in the NSE Cash market as on December 2004 and 87.81% of trading in the NSE derivatives market as on December 2004 (Source: www.nseindia.com). Expand our retail network They have a retail branch network of 73 branches at 36 locations across India to provide an alternative channel for their customers to transact with them and to support their online services. These branches allow their customers the opportunity to purchase personal financial products and trade online at onsite terminals with the assistance of our staff. They propose to set up additional 77 branches in 50 cities across India to have a network of 150 branches to further strengthen their geographic reach. Leverage our content advantage for value added offerings They believe that the key to successful investment is research. They have invested considerable resources in building their research domain skills. Their top management has a hands-on experience in equity research. They will continue to expand the breadth and depth of research and content on Indian business and finance. This research advantage will enable them to acquire customers in high value added product offerings especially PMS and wealth management. Continuous investments in technology platform They have leveraged the power of technology to offer an integrated platform to the customer to transact. They will continue to invest in such technologies that would enhance

customer experience while interacting with them. They have facilitated integrated trading and depositary accounts for the customer, payment gateways with multiple banks, online Internet enabled back office and MIS. They believe that their technology investments will be a key driver in scaling up of the business. Acquisition & Takeover We strongly believe that to become a market leader in the investment advisory and intermediation space, we have to expand our business. In our endeavor to do so and as per our business strategy of inorganic growth, we may acquire other smaller companies.

The Board of Directors

Nirmal Jain, Founder & Chairman, India Infoline Nirmal Jain, is the founder and the chairman of India Infoline Ltd. He holds an MBA degree from IIM Ahmadabad, and is a Chartered Accountant and a Cost Accountant. He started his professional career with HLL in 1989. In 1995, he founded his own independent financial research company, now known as India Infoline Ltd. R. Venkatraman, Co-promoter and Executive Director R. Venkatraman has done his Bachelors in Technology (B. Tech) in Electronics, Electrical Communications Engineering from IIT Kharagpur and an MBA from IIM Bangalore. He has held senior managerial positions in ICICI Limited. He has also held the position of Assistant Vice President with G E Capital Services India Limited in their private equity division. Other Key Executives:

Sat Pal Khattar - Non Executive Director Sanjiv Ahuja - Independent Director Nilesh Vikamsey - Independent Director Kranti Sinha - Independent Director

3.7 Product Profile

1. Investor Terminal (IT)

Investor Terminal is recommended for infrequent investors, who fall into the "Buy and Hold" school of investing, made very popular by Warren Buffet - the Oracle of Omaha. A typical retail investor is a busy corporate executive or a businessman who makes equity investments for long term and does not trade everyday. He prefers a trading interface which works behind proxy and firewalls as they access the Internet and the stock markets from their work place, where a direct connection is difficult because of corporate IT security policies. This product does not have intra-day tick by tick charts.

2. Trade Terminal (TT)

Trader Terminal is for the dedicated day traders, who churn their portfolio on minor movements in the market, sometimes several times a day. Their rapid and high volume trading requires a powerful interface for lightning fast order execution. They monitor marked to market positions on a minute-to-minute basis, with facilities for panic exit. They need all the analysis - fundamental and technical, market gossip, price and volume information and much more - all at one click.

3.8 Services offered by India Infoline

Equities Service
India Infoline provided the prospect of researched investing to its clients, which was hitherto restricted only to the institutions. Research for the retail investor did not exist prior to India Infoline. India Infoline leveraged technology to bring the convenience of trading to the investors location of preference (residence or office) through computerized access. India Infoline made it possible for clients to view transaction costs and ledger updates in real time.

PMS Service

Their Portfolio Management Service is a product wherein an equity investment portfolio is created to suit the investment objectives of a client. They at India Infoline invest your resources into stocks from different sectors, depending on your risk-return profile. This service is particularly advisable for investors who cannot afford to give time or don't have that expertise for day-to-day management of their equity portfolio.

Research Service
Sound investment decisions depend upon reliable fundamental data and stock selection techniques. India Infoline Equity Research is proud of its reputation for, and they want you to find the facts that you need. Equity investment professionals routinely use our research and models as integral tools in their work. They choose Ford Equity Research when they can clear your doubts.

Commodities Service
India Infolines extension into commodities trading reconciles its strategic intent to emerge as a one-stop solutions financial intermediary. Its experience in securities broking has empowered it with requisite skills and technologies. The Companys commodities business provides a contra-cyclical alternative to equities broking. The Company was among the first to offer the facility of commodities trading in Indias young commodities market (the MCX commenced operations only in 2003). Average monthly turnover on the commodity exchanges increased from Rs 0.34 bn to Rs 20.02 bn. The commodities market has several products with different and non-correlated cycles. On the whole, the business is fairly insulated against cyclical gyrations in the business.

Mortgages Service
During the year under review, India Infoline acquired a 75% stake in Money tree Consultancy Services to mark its foray into the business of mortgages and other loan products distribution. The business is still in the investing phase and at the time of the acquisition was present only in the cities of Mumbai and Pune.

The Company brings on board expertise in the loans business coupled with existing relationships across a number of principals in the mortgage and personal loans businesses. India Infoline now has plans to roll the business out across its pan-Indian network to provide it with a truly national scale in operations.

Invest online Service

India Infoline has made investing in Mutual funds and primary market so effortless. All you have to do is register with us and thats all. No paperwork no queues and No registration charges.
INVEST IN MF

India Infoline offers you a host of mutual fund choices under one roof, backed by in-depth research and advice from research house and tools configured as investor friendly. APPLY
IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the hassles of filling ANY application form/ paperwork.

SMS Service
Stay connected to the market The trader of today; you are constantly on the move. But how do you stay connected to the market while on the move? Simple, subscribe to India Infoline's Stock Messaging Service and get Market on your Mobile! There are three products under SMS Service: Market on the move. Best of the lot. VAS (Value Added Service )

Insurance Service
An entry into this segment helped complete the clients product basket; concurrently, it graduated the Company into a one-stop retail financial solutions provider. To ensure maximum reach to customers across India, we have employed a multi pronged approach and reach out to customers via our Network, Direct and Affiliate channels.

Following the opening of the sector in 1999-2000, a number of private sector insurance service providers commenced operations aggressively and helped grow the market. The Companys entry into the insurance sector derisked the Company from a predominant dependence on broking and equity-linked revenues. The annuity based income generated from insurance intermediation result in solid core revenues across the tenure of the policy.

Wealth Management Service

Imagine a financial firm with the heart and soul of a two-person organization. A world-leading wealth management company that sits down with you to understand your needs and goals. We offer you a dedicated group for giving you the most personal attention at every level.

Newsletters Service
The Daily Market Strategy is your morning dose on the health of the markets. Five intraday ideas, unless the markets are really choppy coupled with a brief on the global markets and any other cues, which could impact the market. Occasionally an investment idea from the research team and a crisp round up of the previous day's top stories. That's not all. As a subscriber to the Daily Market Strategy, you even get research reports of India Infoline research team on a priority basis. The India Infoline Weekly Newsletter is your flashback for the week gone by. A weekly outlook coupled with the best of the web stories from India infoline and links to important investment ideas, Leader Speak and features is delivered in your inbox every Friday evening.

3.9 Competition
Broking They face competition from small local brokers (traditional) and pan India brokers like Kotak Securities Limited, S. S. Kantilal Ishwarlal Securities Private Limited, India bulls Securities Limited, ICICI Web Trade Limited, Geojit Financial Services Limited etc. Our strengths are our content and research, online technology platform and customer service.

Distribution They face competition from small retail distributors (typically single outlet unorganized units), brokers who have a distribution set up, old and established distribution companies like Blue Chip Corporate Investment Centre Limited, Bajaj Capital Limited, Karvy Securities Limited and banks including their PMS and Wealth Management desks.

ANALYSIS OF DATA

4. ANALYSIS OF DATA TABLE-4.1 Table showing the number of male & female respondents
GENDER MALE FEMALE TOTAL NUMBER OF RESPONDENTS 29 21 50 PERCENTAGE OF RESPONDENTS 58% 42% 100%

GRAPH-4.1 Graph showing the number of male and female respondents

INFERENCE:
From the above table it is clear that out of 50 respondents, 58% of the respondents belong to male and only 42% of the respondents belong to female. This shows that the number of female respondents are less when compared to male respondents. Thus it can be analyzed that, highest percentage i.e. 58% of respondents belong to male.

TABLE-4.2

Table showing the age group of respondents

AGE GROUPS BELOW 20 21-30 31-40 41-50 MORE THAN 50 TOTAL NUMBER OF RESPONDENTS 0 44 4 2 0 50 PERCENTAGE OF RESPONDENTS 0% 88% 8% 4% 0% 100%

GRAPH-4.2 Graph showing the age group of the respondents

INFERENCE:
From the above table, it is clear that 88% of the respondents are belonging to 2130 years, Just 8% of the respondents belongs to 31-40 years, and only 4% of the respondents in the age group of 41-50 years and 0% of the respondents are below 20 and more than 50.Thus it can be analyzed that, highest percentage of respondents i.e. 88% of the respondents are belonging to age group of 21-30 years.

TABLE-4.3 Table showing the occupation of respondents

OCCUPATION NUMBER OF PERCENTAGE OF

BUSINESS EMPLOYEE PROFESSION RETIRED PERSON TOTAL

RESPONDENTS 5 32 13 0 50

RESPONDENTS 10% 64% 26% 0% 100%

GRAPH-4.3 Graph showing the occupation of respondents

INFERENCE:
From the above table, it is clear that only 10% of the respondents are belonging to business, 64% of the respondents are belonging to employee, and 26% of the respondents are belonging to professionals and 0% of the respondents belong to retired person. Thus it can be analyzed that, highest percentages i.e.64% of respondents are belonging to employees.

TABLE-4.4 Table showing the sources of information created awareness to the respondents on Equities & Mutual funds.

SOURCES T.V NEWS PAPER FRIENDS FINANCIAL ADVISOR OTHERS TOTAL

NUMBER OF RESPONDENTS 23 12 5 8 2 50

PERCENTAGE OF RESPONDENTS 46% 24% 10% 16% 4% 100%

GRAPH-4.4 Graph showing the sources of information created awareness to the respondents on Equities & Mutual funds.

INFERENCE:
From the above table it is clear that the 46% of the respondents are well aware of Equities & Mutual funds from television, 24% of the respondents from news paper, 10% of the respondents from friends, and 16% of the respondents from financial advisor, and only 4% of the respondents from other sources. Thus it can be analyzed that highest percentage i.e.46% of the respondents are well aware about Equities & Mutual funds from Television.

TABLE-4.5 Table showing the respondents opinion about type of investment.

TYPE EQUITIES MUTUAL FUNDS NUMBER OF RESPONDENTS 40 6 PERCENTAGE OF RESPONDENTS 80% 12%

BOTH TOTAL

4 50

8% 100%

GRAPH-4.5 Graph showing the respondents opinion about type of investment.

INFERENCE:
From the above table it is clear that, 80% of respondents want to invest in Equities, 12% of respondents want to invest in Mutual funds and only 8% of respondents want to invest in both. Thus it can be analyzed that the highest percentage of respondents i.e. 80% of the respondents wants to invest in Equities.

TABLE-4.6 Table showing the respondents opinion about risk involved in Equities and Mutual funds.
TYPE EQUITIES NUMBER OF RESPONDENTS 39 PERCENTAGE OF RESPONDENTS 78%

MUTUAL FUNDS

11 50

22% 100%

TOTAL

GRAPH-4.6 Graph showing the respondents opinion about risk involved in Equities & Mutual funds.

INFERENCE:
From the above table it is clear that, 78% of respondents opinion is that investment in equities is risky and only 22% of respondents opinion is that investment in mutual funds is risky. Thus it can be analyzed that highest percentage of respondents i.e. 80 percent o respondents opinion is that investing in equities is risky.

TABLE-4.7 Table showing the respondents main objective about investment in Equities
OBJECTIVES RISK RETURN NUMBER OF RESPONDENTS 3 30 PERCENTAGE OF RESPONDENTS 6% 60%

TAX BENEFITS CAPITAL APPRECIATION SAFETY LIQUIDITY OTHERS TOTAL

5 6 1 3 2 50

10% 12% 2% 6% 4% 100%

GRAPH-4.7 Graph showing the respondents main objective about investment in Equities

INFERENCE:
From the above table it is clear that, just 6% of respondents main objective is to invest in equities is to take risk, 60% of respondents main objective is to get return, 10% of respondents main objective is to get tax benefits, 12% of respondents main objective is to take capital appreciation, only 2% of respondents main objective is to get safety, 6% of respondents main objective is to getting liquidity and 4% of respondents are for other objectives. Thus it can be analyzed that highest percentage i.e. 60% of the respondents main objective is to invest in equities is to get high return.

TABLE-4.8 Table showing the respondents main objective about investment in Mutual funds
OBJECTIVES RISK RETURN TAX BENEFITS CAPITAL APPRECIATION SAFETY LIQUIDITY NUMBER OF RESPONDENTS 1 18 20 1 7 3 PERCENTAGE OF RESPONDENTS 2% 36% 40% 2% 14% 6%

TOTAL

50

100%

GRAPH-4.8 Graph showing the respondents main objective about investment in Mutual fund

INFERENCE:
From the above table it is clear that, only 2% of respondents main objective is to invest in Mutual fund is take risk, 36% of respondents main objective is to get return, 40% of respondents main objective is to take tax benefits, 2% of respondents main objective is to get capital appreciation, 14% of respondents main objective is to get safety and 6% of respondents main objective is getting liquidity. Thus it can be analyzed that highest percentage i.e. 40% of the respondents main objective is to invest in equities is taking high return.

TABLE-4.9 Table showing the respondents preference for scheme of investment

SCHEME EQUITY DIVERSIFIED DEBT FUND BALANCED FUND OTHERS TOTAL NUMBER OF RESPONDENTS 23 14 12 1 50 PERCENTAGE OF RESPONDENTS 46% 28% 24% 2% 100%

GRAPH-4.9 Graph showing the respondents preference for scheme of investment

INFERENCE:
From the above table is clear that 46% of respondents wants to invest in equity diversified scheme, 28% of respondents wants to invest in debt fund scheme, 24% of respondents wants to invest in balanced fund scheme, and only 2% in others. Thus it can be analyzed that highest percentage i.e. 46 percent of the respondents wants to invest in equity diversified scheme.

TABLE -4.10 Table showing the respondents preference for sources of information on stocks or companies.
SOURCES BROKERS FRIENDS MEDIA CHANNEL NEWS PAPER TOTAL NUMBER OF RESPONDENTS 21 5 16 8 50 PERCENTAGE OF RESPONDENTS 42% 10% 32% 16% 100%

GRAPH-4.10 Graph showing the respondents preference for sources of information on stocks or companies

INFERENCE:
From the above table it is clear that 42% of respondents know the information about stocks or companies from brokers, only 10% of respondents from friends, and 32% of respondents from media channel, and 16% of respondents from news paper. Thus it can be analyzed that highest percentage i.e. 42% of respondents knows the information about stocks or companies from media channel.

TABLE-4.11 Table showing the respondents opinion about the return in their portfolio (equities).
OPINION YES NO TOTAL NUMBER OF RESPONDENTS 33 17 50 PERCENTAGE OF RESPONDENTS 66% 34% 100%

GRAPH-4.11 Graph showing the respondents opinion about the return in their portfolio (equities)

INFERENCE:
From the above table it is clear that 66% of respondents received good return in equity and only 34% of respondents are not received good return in equity. Thus it can be inferred that highest percentage i.e. 66% of respondents received good return in equity.

TABLE-4.12 Table showing the respondents preference to invest in mutual fund scheme
SCHEME OPEN ENDED CLOSED ENDED NILL TOTAL NUMBER OF RESPONDENTS 36 10 4 50 PERCENTAGE OF RESPONDENTS 72% 20% 8% 100%

GRAPH-4.12 Graph showing the respondents preference to invest in mutual fund scheme

INFERENCE:
From the above table it is clear that 72% of the respondents are likely to invest in open ended scheme, only 20% of the respondents are likely to invest in closed ended scheme and 4% of the respondents have not responded. Thus it can be analyzed that highest percentage i.e. 72% of the respondents likely to invest in open ended scheme.

TABLE-4.13 Table showing the respondents term of investment in Mutual fund

TERM 1-2 Years 2-5 Years 5-10 Years More than 10 Years Nil TOTAL NUMBER OF RESPONDENTS 13 19 10 5 3 50 PERCENTAGE OF RESPONDENTS 26% 38% 20% 10% 6% 100%

GRAPH-4.13 Graph showing the respondents term of investment in Mutual fund

INFERENCE:
From the above table it is clear that 26% of the respondents term of investment in mutual fund is between 1-2 years, 38% of the respondents term of investment is between 25 years, 20% of the respondents term of investment is 5-10 years, 10% of the respondents term of investment is more than 10 years and only 6% of the respondents has not responded. Thus it can be analyzed that highest percentage i.e. 38% of the respondents term of investment in mutual fund is between 2-5 years.

TABLE-4.14 Table showing the respondents term of investment in Equities

TERM SHORT-TERM MEDIUM TERM LONG TERM VERY LONG TERM TOTAL NUMBER OF RESPONDENTS 21 5 18 6 50 PERCENTAGE OF RESPONDENTS 42% 10% 36% 12% 100%

GRAPH-4.14 Graph showing the respondents term of investment in Equities

INFERENCE:
From the above table it is clear that 42% of the respondents term of investment in Equities is short term, only 10% of the respondents term of investment is medium term, 36% of the respondents term of investment is long term and 12% of the respondents term of investment is very long term. Thus it can be analyzed that highest percentage i.e. 42% of the respondents term of investment is short-term.

TABLE -4.15 Table showing the respondents opinion about mutual fund has tax saving plan & all long term mutual fund total return is tax free
OPINION YES NO TOATAL NUMBER OF RESPONDENTS 42 8 50 PERCENTAGE OF RESPONDENTS 84% 16% 100

GRAPH-4.15 Graph showing the respondents opinion about mutual fund has tax saving plans & all long term mutual fund total return is tax free

INFERENCE:
From the above table it is clear that 84% of the respondents opinion is that mutual fund is a tax saving plans and all long term mutual funds total return is tax free but only 16% of the respondents opinion is that mutual fund is not a tax saving plans and all long term mutual funds total return is not tax free. Thus it can be analyzed that highest percentage i.e. 84% of the respondents opinion is mutual fund is a tax saving plan and all long term mutual funds total return is tax free.

TABLE-4.16 Table showing the respondents opinion about long term investment in equity and its total return is tax free
OPINION YES NO TOTAL NUMBER OF RESPONDENTS 39 11 50 PERCENTAGE OF RESPONDENTS 78% 22% 100%

GRAPH-4.16 Graph showing the respondents opinion about long term investment in equity and its total return is tax free

INFERENCE:
From the above table it is clear that 78% of the respondents opinion is that long term investment in equity and its total return is a tax free but only 22% of the respondents opinion is that long term investment in equity and its total return is not a tax free. Thus it can be analyzed that highest percentage i.e. 78% of the respondents opinion is that long term investment in equity and its total return is a tax free.

SUMMARY OF

FINDINGS, CONCLUSION AND RECOMMENDATIONS

5. SUMMARY OF FINDINGS
58% (29) of the respondents belong to male. 88% (44) of the respondents belongs to the age group between 21-30 years. 64% (32) of the respondents belong to employees. 46% (23) of the respondents are well aware of equities and mutual funds from television. 80% (40) of the respondents want to invest in equities rather than mutual funds. 78% (39) of the respondents opinion is that investment in equities is risky than mutual funds. 60% (30) of the respondents main objective is to invest in equities to get high returns. 40% (20) of the respondents main objective is to invest in mutual funds to get tax benefits. 46% (23) of the respondents wants to invest in equity diversified scheme. 42% (21) of the respondents know the information about stocks or companies from brokers. 66% (33) of the respondents have received good return in equity. 72% (36) of the respondents are likely to invest in open ended scheme rather than close ended scheme. 38% (19) of the respondents term of investment in mutual fund is between 2-5 years. 42% (21) of the respondents term of investment in equities is short term (6 months). 84% (42) of the respondents opinion is that mutual fund is a tax saving plan and all long term mutual funds total return is tax free.

CONCLUSION
Saving money is not enough. Each of us also need to invest ones savings intelligently in order to have enough money available for funding the higher education of ones children, for buying a house, or for ones own golden years. The study will guide the new investor who wants to invest in equity and mutual fund schemes by providing knowledge about how to measure the risk and return of particular scrip or mutual fund scheme. The study recommends new investors to go for equities rather than mutual funds, because of high risk with high return and market volatility. From the analysis I found that most of the people are interested to invest in equities even though it is involving high risk because of high returns. And a very few investors are interested to invest their money in mutual funds schemes because of high return with tax benefits.

RECOMMENDATIONS: TO THE COMPANY

Mutual fund companies should also provide the facility for liquidity purpose so that some people whose objective will be this can invest in these schemes. As we can see that most of the people have invested in open-ended scheme and very rare in closed-ended scheme. Mutual fund companies should attract customers with these schemes also. From the study I came to know that most of the people prefer to invest for 2-5years. And very few people are interested in investing more than 5 years. So mutual fund companies should induce the customers to go for long term and they could get some benefits like tax benefits, safety etc. Most of the people are unaware of various schemes in equity, debt. So detail information should be given by the fund manager while investing the fund. Mutual fund companies should also give information of new funds to the customers to invest e.g.-gold fund newly introduced but not known to the most of the customers. To educate the non-investors about SIP (systematic investment plan). In these parts of the state SIP of mutual funds is not popular it has to be increased in order to fetch more attraction of people. All mutual fund companies should conduct seminars, workshops on financial markets, which will help the individuals to asses, the risk involved in investing in mutual funds and also know the possible returns they will get if they invest in that particular sector.

TO THE INVESTORS:
Investors should be aware of Equities and Mutual funds investment. An investment decision should be to maximize the return and minimize the risk. The regularity of investment is most important. The systematic investment is one of the best ways of savings because it makes investment a habit. Investors should have systematic plan before investing . Investor should analyze his needs and wants and then invest accordingly . We have lot of agents and advisors to give awareness regarding Equities and Mutual funds but before going to invest in any type of investment you gather information and take your investment decision.

APPENDICES AND ANNEXURES

APPENDICES AND ANNEXURES

Questionnaire
Dear respondents, I Dhanalakshmi.M, the student of Community Institute Of Management Studies, Bangalore University, conducting research on Analysis of Equities & Mutual funds I kindly request you to fill up this questionnaire; the inputs provided by you will utmost important for our further analysis and we assure you that the information provided by you will be kept confidential. Name: _______________________________________________ 1. Gender: Male: Female: b. 21-30: d. 41-50:

2. Age: a. Below 20: c. 31-40: e. More than 50: 3. Occupation: a. Businessman c. Professional

b. Employee d. Retired person Fund?

4. What source of information will create awareness to you on Equities & Mutual a. T.V b. News Paper c. Friends d. Financial Advisor e. If any other specify __________________ 5. Type of investment? a) Equities b. Mutual funds b. No b. No

6. Is it risky to invest in? a) Equities a. Yes b) Mutual funds a. Yes

7. What is the main objective of your investment in Equities? a. Risk b. Return c. Tax Benefits d. Capital Appreciation e. Safety f. Liquidity g. If any other please specify___________________________________

8. What is the main objective of your investment in Mutual fund? a. Risk b. Return c. Tax Benefits d. Capital Appreciation e. Safety f. Liquidity g. If any other please specify___________________________________ 9. If invested in the mutual fund, in which scheme you have invested? a. Equity diversified b. Debt Fund c. Balanced Fund d. If any other please specify___________________________________ 10. Source of information on stocks or companies? a. Brokers b. friends c. Media channel (specify) d. news paper (specify) 11. How sound is your portfolio (have you received good returns in equity)? a. Yes b. No 12. In which scheme you have invested? a. Open Ended b. Closed Ended c. If any other please specify___________________________________ 13. If Invested in Mutual Fund, term of your investment? a. 1-2yrs b. 2-5yrs c .5-10yrs d .More than 10yrs 14. If Invested in Equities, term of your investment? a. Short term (6months) b. Medium term (6 month 1 year) c. Long term (1yrear +) d. Very long term (5years+) 15. Are you aware mutual funds has tax saving plans and all long term mutual fund total return is tax free? a. Yes b. No 16. Are you aware long term investment (1year +) in equity total return is tax free? a. Yes b. No

Thank you

BIBILIOGRAPHY

Bibliography

SI.NO 1 2 3 4
5

BOOKS
Security analysis and portfolio management Research methodology Investment management Financial markets and services Investment analysis and portfolio management

AUTHOR
Prasanna chandra C.R. Kothari Avadhani Gordon and Natarajan Prasanna chandra

PUBLICATIONS
Himalaya Publications New age international publishers Himalaya Publications

EDITION
3rd Edition 2nd Edition 3rd Edition 2nd Edition

Himalaya Publications Tata Mc Graw Hill 2nd Edition

OTHERS:
Business standard news paper Monday issue. Annual report of the company. Company Broachers

Websites:
www.amfiindia/concept.com www.google.com www.Indiainfoline.com www.bseindia.com www.mutualfunds.india.com