Post on 20-Jun-2015
A
SUMMER TRAINING RESEARCH PROJECT REPORT ON
“INVESTMENT PATTERN OF DEFENCE EMPLOYEES”
SUBMITTED TO:
GAUTAM BUDDH TECHNICAL UNIVERSITY, LUCKNOW
FOR PARTIAL FULFILLMENT OF THE REQUIREMENT OF
MASTER OF BUSINESS ADMINISTRATION
(MBA – 2012-2014)
UNDER THE SUPERVISION OF:
MR: PRADIP AGARWAL BRANCH HEAD, LUCKNOW
SUBMITTED BY:
ADITI SINGH MBA FIRST YEAR
ROLL NO:
SCIENCE AND TECHNOLOGY ENTERPRENEURS’ PARK
HARCOURT BUTLER TECHNOLOGICAL INSTITUTE, NAWABGANJ,
KANPUR-208002
ACKNOWLEDGEMENT
The project in its present form and state would not have been possible if it had not
been under the able guidance and support of Mrs. Reetu Singh, whom I always looked
up to, when faced with any difficulty and have disturbed her at all times and hours.
I would also like to thank our trainer Mr. Pradip Agarwal, who provided me with all the
skills and training required to do our project. I am also thankful to Mrs. Meenakshi
Kakaji, who provided me with references required for collection of data.
No research would be successful, without the active involvement of the respondents
and we take this opportunity to thank our various respondents for having patiently filled
our response sheet.Last but not least, I feel indebted to all those persons and
organization that have provided help directly or indirectly in successful
completion of this study.
DECLARATION
I Aditi Singh, student of Masters of Business Administrations studies in STEP-HBTI,
Kanpur, declare that the work done and the project report titled “INVESTMENT
PATTERN OF DEFENCE EMPLOYEES” is original work carried out by me. All
references, made to any published material in this report, have been duly
acknowledged.
This report is not been submitted to any university/Academic Institution for the award of
any degree or diploma.
I solemnly declare that I am singularly responsible for any infringement on the
intellectual Property on this report.
PLACE: LUCKNOW
DATE:
Introduction
Rationale for study
Investment is a commitment of a person’s funds to derive future income in the form of
interest, dividend, premium, pension benefits or appreciations in the value of their
capital purchasing for share, debenture, post office savings certificates, insurance
policies are all investment are all investments in the financial sense. Such investment
generates financial assets.
In the economic sense, investment means the need additions to the economies capital
stock which consists of goods and services that are used in the production of other
goods and services. Investment in the sense implies the formation of new and
productive capital in the form of constructions, plant and machinery, inventories, etc.
such investments generate physical assets.
The two types of investments are, however, related and dependent. The money
invested in the financial investments are ultimately converted into physical assets. Thus
all investments are ultimately converted into physical assets. Thus, all investments
results in the acquisition of some assets either financial or physical.
Objective of the study
Research objective
Every project is started with keeping in mind specific objective. Without any objective
researcher are not able to reach his goals and result. The following points reflect the
core of the objective which also directly focuses on the scope of the project work
undertaken.
The primary objective is to study the investment pattern of the defense
employees.
To find priority for investments like returns, risk, safety, liquidity, maturity of
investment.
To compare different investments avenues available for the employees
To help them selecting the appropriate investment avenue for assets allocations
according to needs.
To find the strengths and weakness of different avenues.
To analyses investment pattern through data interpretation.
Scope of the study
This study is limited to Lucknow city only
This study not includes other avenues such as diamonds retail textile and
agricultural business.
The scope of the study is limited to different selecting investment avenues.
This study is limited to comparison of different investment avenues available to
middle class and lower class family
Industry Profile
Introduction
The income that a person receives may be used for purchasing goods and services that
he currently requires or it may be saved for purchasing goods and services that he may
require in the future. In other words, income can be what is spent for current
consumption abstains from present consumption abstains from present consumption for
a future use. The persons saving part of their income try to find a temporary repository
for their savings until they are required to finance their future expenditure. This results in
investment.
Meaning of Investment
Investment is an activity that is engaged in by people who have saving, i.e. investments
are made of savings, or in other words, people invest their savings. But all savers are
not investors. Investment is an activity which is different from savings. Let us see what
is meant by investment.
It may mean things to many persons. If one person has advance money to another, he
may consider his loan as an investment. He expects to get back the money, along with
interest at future date. Another person may have purchase 1 kilogram of gold for the
purpose of price appreciation and may consider it as an investment. Yet another person
may purchase an insurance plan for the various benefits it promises in future. That is his
investment.
In all these cases it can be seen that investment involves employment of funds with the
aim of achieving additional income or growth in values. The essential quality of an
investment is that it involves waiting for a reward. Investment involves the commitment
of resources which has been saved in the hopes that some benefits will accrue in the
future.
Thus, investment may be defined as “a commitment of funds made in the expectation of
some positive rate of return”. Expectation of return is an essential element of
investment. Since the return is expected to be realized in future, there is a possibility
that the return actually realized is lower than the return expected to be realized. The
possibility of variation in the actual return is known as investment risk. Thus, every
investment involves return and risk.
Financial and economic meaning of investment
In the financial sense, investment is the commitment of a person’s funds to derive future
income in the form of interest, dividend, premiums, pensions, benefits or appreciation in
the value of their capital purchasing of shares, debenture, post office saving certificate,
insurance policies are all investments in the financial sense. Such investments generate
financial assets.
In the economic sense, investment means the net additions to the economy’s capital
stock which consists of goods and services that are used in the production of other
goods and services. Investment in this sense implies the formation of new and
productive capital in the form of new constructions, plant and machinery, inventories,
etc. such investments generate physical assets.
The two types of investments are, however, related and dependent. The money
invested in financial investments are ultimately converted into physical assets. Thus, all
investments results in the acquisition of some assets either financial or physical
CHARACTERSTICS OF INVESTMENTS
All investments are characterized by certain features. Let us analyze these
characteristic of investments.
Return
All investments are characterized by the expectation of a return. In fact, investments are
made with primary objective of deriving a return. The return may receive in the form of
tiled plus capital appreciation. The return may be received in the form of yield plus
capital appreciation. The dividend or interest received from the investment is the yield.
Different types of investments promise different types of returns. The return from an
investment depends upon the nature of the investments, the maturity period and the
host of other factors.
Risk
Risk is inherent in any investment. The risk may relate to loss of capital, delay in
repayment of capital , non-payment of interest, or variability of return. The risk of an
investment depends on the following factors.
1. The longer the maturity period, the larger is the risk.
2. The lower the credit worthiness of the borrower, the higher is the risk.
3. The risk varies with the nature of investment. Investments in ownership securities
like equity share higher risk compared to investments in debt instruments like
debentures and bonds.
Safety
The safety of an investment implies the certainty of capital without loss of money.
Liquidity
An investment which easily is saleable or marketable without loss of money and without
loss of time is said to possess liquidity.
OBJECTIVES OF INVESTMENTS
An investor has various alternative avenues of investments for his savings to flow to.
Savings kept as cash are barren and do not earn anything. Hence, savings are invested
in assets depending on their risk and return characteristics. The objective of the investor
is to minimize the risk involved in investment and maximize the return from the
investment.
Thus, the objective of investment can be stated as: maximization of return, minimization
of risk & hedge against inflation.
INVESTMENT PROCESS
The investment process is generally described in four stages. These stages are
investment policy, investment analysis, valuation of securities, and portfolio
construction.
I. Investment policy: determination of ingestible wealth determination of
portfolio objectives. Identification potential investments assets consideration
of attributes of investment assets allocation of wealth to asset categories.
II. Investment policy: valuation of stocks, debentures, other asset and bonds.
III. Investment analysis
a. Equity stock analysis
b. Screenings of industries
c. Analysis of industries
d. Quantitative analysis of stocks
e. Analysis of the economy
f. Debentures and bond analysis
g. Qualitative analysis of debentures
h. Other assets analysis
Portfolio construction: determination of diversification level
consideration of investment assets evaluation of portfolio for feedback.
Investment avenues
There are various investment avenues available to investors now a days. With the
opening up of the economy the number of investments has also increased and the
quality of the investments has improved due to the use of the professional activity of
players involved in this segment. Today investment is no longer a process of trial and
error and it became a systematized process, which involves the use of the professional
investment solution provider to player greater role in the investment process.
Different investors have different objectives of the investment and they have different
risk capacities. The below it has been listed down some of the investment avenues on
the basis of risk involved. Investments in government bonds or bank deposits carry
lesser risk whereas investment in equities has comparatively higher risk. From the
following we can also see that higher the risk higher the return. Thus every person
would invest according to his requirements and risk tolerance.
1. Stock Market
The Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) are the
two primary exchanges in India. In addition there are 22 regional stock
exchanges. However the BSE and NSE have established themselves as two
leading exchange and account for about 90% of the equity volume in trade in
India.
The primary index of BSE is BSE Sensex comprising 30 stocks. NSE has the
S&P NSE 50 index (nifty) which consists of 50 stocks. The BSE Sensex is the
older and more widely followed index. Both exchange have switched over from
the open outcry trading system to fully automated computerized mode of trading
known as BOLT (BSE on line trading) and NEAT (national exchange automated
trading) system. It facilitates more efficient processing, automatic order matching,
faster execution of trader and transparency.
A. Equity shares
Ordinary shares are also known as equity shares and they are the most
common form of shares in UK. An ordinary share gives the right to its
owner to share in the profits of the company (dividends) and to vote at
general meetings of the company. Since the profits of the companies can
vary widely from year to year, so can the dividends paid to ordinary
shareholders. In bad years, dividends may be nothing whereas in good
years they may be substantial. Ordinary shareholders can vote on all of
the issues raised at a general meeting of the company.
The nominal value of a share is the issue value of the share – it is the
value written on the share certificate that all shareholders will be given by
the company in which they own shares. The market value of a share is
the amount at which a share is being sold on the stock exchange and may
be radically different from the nominal value.
Types of stocks
1. Common Stock
Common Stock is also referred to as common or ordinary shares, as the name
implies, the most usual and commonly held from the stock in a company.
2. Preferred Stock
Preferred stock sometimes called preferred shares, have priority over common
stock in the distribution of dividends and assets.
3. Treasury Stock
Treasury stock is shares that have been bought back from the public. Treasury
stock is considered issued, but not outstanding.
4. Dual Class Stock
Dual class stock is shares issued for a single company with varying classes
indicating different rights on voting and dividend payments. Each kind of shares
has its own class shareholders entitling different rights.
Advantages of Equity Financing
You can use your cash and that of your investors when you start up your
business for all the startup costs, instead of making large loan payments to
banks or other organizations or individuals. You can get underway without the
burden of debt on your back.
If you have prepared a prospectus for your investors and explained to them that
their money is at risk in your brand new startup business, they will understand
that if your business fails, they will not get their money back.
Depending on who your investors are, they may offer valuable business
assistance that you may not have. This can be important, especially in the early
days of a new firm. You may want to consider angel investors or venture capital
funding. Choose your investor wisely.
Disadvantages of Equity Financing
1. Remember that the investors will actually own a piece of your business; how
large that piece is depends on how much money they invest. You probably
will not want to give up control of your business, so you have to be aware of
that when you agree take on investors. Investors do expect a share of profits
where, if you obtain debt financing banks or individuals only expect their loans
repaid. If you do not make a profit during the first years of your business, then
investors don’t expect to be paid and you don’t have the money on your back
of paying back loans.
2. Since your investors own a piece of your business, you are expected to act in
their best interest as well as your own, or you could open yourself up to a
lawsuit. In some cases, if you make your firm’s securities available to just a
few investors, you may not have to get into a lot of paperwork may overwhelm
you. You will need to check with the Securities and Exchange Commission to
see the requirements before you make decisions on how widely you want to
open up your business for investments.
B. Preference Shares
Preference shares offer their owners preferences over ordinary
shareholders. There are two major differences between ordinary
and preference shares:
Preference shareholders are often entitled to a fixed dividend even when
ordinary shareholders are not.
Preference shareholders cannot normally vote at general meetings. The
preference dividend is fixed in the sense that preference shares are often issued
with the rate of dividend fixed at the time of issue and you might see
something like this: 4% preference dividend $0.25 note, that if by any
chance a company cannot pay its preference share dividend then it
cannot pay any ordinary share dividend since the preference
shareholders have the right to receive their dividend before the ordinary
shareholders under all circumstances – hence the term 'preference'.
Types of preference shares
1. Cumulative preference shares
Preference shares are usually cumulative and th is means tha t i f t h i s
year ' s d iv idend wasn't paid, then it will be carried forward to next year.
2. Non-Cumulative preference shares
Some preference shares are non-cumulative, if the company can’t pay the
dividend for one particular year, the dividend for that year lapses.
3. Redeemable preference shares
A preference share may be redeemable which means that at some time
in the future, the company will effectively buy if back.
4. Irredeemable preference shares
A preference share may be irredeemable which means that at some time in the
future, the company will not effectively buy it back.
5. Convertible Preference Shares
Preference shares may be issued with the right of conversion into ordinary
shares. These are called Convertible Preference Share.
6. Non-Convertible Preference shares
Preference shares may be issued without the right of conversion into
ordinary shares. These are called Convertible Preference Share.
7. Participating Preference Share
If a preference share is a participating preference share then the owner of such a
share has the r igh t to par t i c ipa te in , o r rece ive , add i t iona l
d iv idends over and above the f i xed percentage dividend.
Advantages of preference shares
You are assured of a dividend
If you own ordinary shares, you are not automatically entitled to a
dividend every year. The dividend will be paid only if the company makes
a profit and declares a dividend. Th is i s no t the case w i th p re fe rence
shares . A p re fe rence shareho lder i s en t i t l ed to a d iv idend every
year . What happens i f the company doesn ' t have the money to pay
dividends on preference shares in a particular year? The dividend is then added
to the next year's dividend. If the company can't pay it the next year as well,
the dividend keeps getting added until the company can pay.
They get priority over ordinary shares
Ordinary shareholders get a dividend only after the cumulative preference
shareholders get theirs. Preference shareholders are given a preference
over the rest. That's why it is called a preference share.
Preference shares are safer
In case the company is wound up and its assets (land, building, offices, machinery,
furniture, etc.) are being sold. The money that comes from this sale is given to
shareholders. After all, shareholders invest in a business and own a portion of it.
Preference shareholders get the money first. Their accounts are settled before that
of the ordinary shareholders, who are the last to get paid.
Disadvantages of Preference Shares
They are not easily available
They are not traded on the stock exchange
C.Bank Deposits
1. Fixed Deposit
When you deposit a certain sum in a bank with a fixed rate of
interest and specified time period, it is called a bank fixed deposit (FD). At
maturity, you are entitled to receive the principal amount as well as the
interest earned at the pre-specified rate during that period. The rate of
interest varies between 4 and 6 per cent, depending on the maturity
period of the FD and the amount invested.
How to apply in fixed deposit?
One can get a bank FD at any bank, be it nationalized, private, or
foreign. You have to open a FD account with the bank, and make the deposit.
However, some banks insist that you maintain a savings account with them to
operate a FD. When a depositor opens an FD account with a bank, a
deposit receipt or an account statement is issued to him, which can be updated
from time to time, depending on the duration of the FD and the frequency of the
interest calculation. Check deposit receipts carefully to see that all particulars
have been properly and accurately filled in.
Features of bank deposit
1. Safety
Bank deposits are fairly safe because banks are subject to control of the Reserve
Bank of India (RBI) with regard to several policy and operational parameters. The
banks are free to offer varying interests in fixed deposits of different maturities.
Interest is compounded once a quarter, leading to a somewhat higher effective
rate.
2. Minimum deposit
The minimum deposit amount varies with each bank. It can range from as low as
Rs.100 to an unlimited amount with some banks. Deposits can be made in
multiples of Rs.100/.
3. Deposit period fixed
Before opening a FD account, try to check the rates of interest for
different banks for different periods. It is advisable to keep the amount in five
or ten small deposits instead of making one big deposit. In case of any premature
withdrawal of partial amount, then only one or two deposit need be prematurely
encased. The loss sustained in interest will, thus, be less than if one big deposit
were to be enchased. Check deposit receipts carefully to see tha t a l l
pa r t i cu la rs have been p roper ly and accura te ly f i l l ed in . The
th ing to consider before investing in an FD is the rate of interest and
the inflation rate. A high inflation rate can simply chip away your real returns.
4. Returns from Fixed bank deposit
The rate of interest for Bank Fixed Deposits varies between 4 and 11 per cent,
depending on the maturity period (duration) of the FD and the amount
invested. Interest rate also varies between each bank. A Bank FD does
not provide regular interest income, but a lump-sum amount on its maturity.
Some banks have facility to pay interest every quarter o r every month , bu t
the in te res t pa id may be a t a d iscoun ted ra te in case o f month ly
interest. The Interest payable on Fixed Deposit can also be transferred to
Savings Bank or Current Account of the customer. The deposit period can vary
from 15, 30 or 45 days to 3, 6 months, 1 year and 1.5 years to 10 years.
Advantages of fixed bank deposit
Safest investment
Bank depos i t s a re the sa fes t inves tmen t a f te r Pos t o f f i ce
sav ings because a l l bank deposits are insured under the Deposit
Insurance & Credit Guarantee Scheme of India. It is possible to get loans up to
75- 90% of the deposit amount.
Any Where in India
One can get a bank FD at any bank, be it nationalized, private, or
foreign. You have to open a FD account with the bank, and make the deposit.
However, some banks insist that you maintain a saving account with them to
operate a FD. When a depositor opens an FD account with a bank, a
deposit receipt or an account statement is issued to him, which can be updated
from time to time, depending on the duration of the FD and the frequency of the
interest calculation. Check deposit receipts carefully to see that all particulars
have been properly and accurately filled in.
2. Time deposit
How to start a Time Deposit?
A Time Deposits account can be opened at any post-office in the country.
Account may be opened by an individual i.e. Single Joint A/B (not more than two
adults) Trust, Regimental Fund and Welfare Fund. On opening a Time Deposit,
you will receive an account statement stating the amount deposited and the
duration of the account. The account can be closed after 6 months of opening the
account. On such closer the amount invested is returned with/without interest
depends on the time the deposit was maintained.
Features of Time Deposit
Time Deposits can be made for the periods of 1 year, 2 years, 3 years
and 5 years. The minimum investment in a post-office Time deposit is
Rs 200 and then its multiples and there is no prescribed upper limit
on your investment. Account may be opened by an individual, Trust,
Regimental Fund and Welfare Fund. The account can be closed after 6 months
but before one year of opening the account. On such closure the amount
invested is returned without interest. two year, three year and five year
accounts can be c losed a f te r one year a t a d iscoun t . They
invo lve a loss in the in te res t acc rued fo r the t ime the accoun t
has been in opera t ion . In te res t i s payab le annually but is calculated
on a quarterly basis at the prescribed rates. One can take a loan against a time
deposit with the balance in your account pledged as security for the loan.
D.REAL ESTATE
The growth curve of Indian economy is at an all-time high and contributing to the
Upswing is the real estate sector in particular. Investments in Indian real estate
have been s t rong ly tak ing the g rowth curve o f Ind ian economy
up over o ther options for domestic as well as foreign investors. The boom in
the sector has been so appealing that real estate has turned out to be a
convincing investment as compared to other investment vehicles such as capital
land debt markets and bullion market. It is attracting investors by offering a
possibility of stable income yields, moderate capital appreciations, tax structuring
benefits and higher security in comparison to other investment options.
A survey by the Federation of Indian Chambers of Commerce and Industry
(FCCI) and Ernst and Young has predicted that Indian real estate industry is
poised to merge as one of the most preferred investment destinations for global
reality and investment firms in next few years.
The potential of India’s property market has a revolutionizing effect on the overall
economy of India as it transforms the skyline of the Indian cities mobilizing
investments segments ranging from commercial, residential, retail, industrial,
hospitality, healthcare etc. But maximum growth is attributed to its growth from
the booming IT sector, since an estimated 70 per cent of the new construction
is for the IT sector.
Factors Favoring Investments:
Tremendous growth has been taking place in both residential as well as
commercial segments that is attracting huge investments phenomenal price escalation
(More than100% in several places) in last couple of years.Lower interest rates,
easy availability of housing finance, burgeoning income
andbetter job prospects, increase of nuclear families have given a boost
to the demand for residential properties in India. The net yields(after accounting
for all outgoings) onresidential property are currently at 4-6% p.a. However,
these investments have benefitedfrom the improving residential capital
values. As such, investors can count on potentialcapital gains to improve
their overall returns. Capital values in the residential sector haverisen by about 25-
40% p.a. in the last 2 years.The real market in India has been growing due to increasing
demand from retailers, higher disposable incomes and openings up of FDI in retail. The capital
appreciation in this sector is close to 20-35% p.a. However, the risks associated with this
sector are higher as retailers are prone to cyclical changes typical of a business
cycle. Changing consumer behavior combined with increasing disposable
incomes will ensure future growth of the retail sector in India. In the present
day scenario, there is the powerful investment tool that brings
burgeoning financial returns, it is INDIAN REAL ESTATE!!! Investors
should the parameters minutely and meticulously to find out why
investing in Real Estate now is best viable option.
High Demand for Commercial Real Estate:
The commercial property market has been growing at an annual rate of approximately3
0% over the past eight years across major locations in India. Moreover, there is an up
shooting demand for 200 million sq. ft. over the next fiveyears.
Real estate industry research has also thrown light on investment opportunities in the
commercial office segment in India. The demand for office space is expected to
increase significantly in the next few years, primarily driven by the IT and ITES industry
that requires an projected office space of more than 367million sq. ft. till 2012-13.
Retail Sector Facilitating Real Estate Growth:
Apart from the IT and ITES industry influencing the Indian real estate sector, India isalso
getting into the knowledge based manufacturing industry on a large scale. Retail, oneof
India's largest industries, has presently emerged as one of the most dynamicand fast
paced industries of our times with several players entering the market.
The contemporary retail sector in India which is reflected in sprawling shopping centers
and multiplex- malls is also contributing to large scale investments in the Real
Estatesector with major national and global players investing in developing
theinfrastructureand construction of the retailing business.
SEZs- The Emerging Investment Option:
Moreover, as real estate sector expands beyond the city limits with
government promoting industrial belts, real estate developers are eyeing
Special Economic Zones (SEZs) as an extension of their business.
Several upcoming special economic zones are also expected to provide
the momentum to the commercial office space development in related
area where the land comes cheaper; and a SEZ developer is entitled for
taxexemptions like a I0-year corporate tax holiday.
FDI - Inviting Real Estate Investments:
Not surprisingly, most foreign investors have aimed India in a big way, largely
through joint ventures. Along with curtailing the risk factor, it provides
the participating companies an exit route. Since 2005, when FDI in
Indian Real State was permitted, US $7-8 billion have been parked
in.The Government o f Ind ia ' s l i be ra l i za t ion and economic
re fo rms p rogrammedencourages industrial policy reforms that have
reduced the industrial licensingrequirements,removed restrictions on
investment and expansion, and facilitatedeasy access to fo re ing
techno logy and FDI . Inc reased in f low o f inves tment a r i s ing ou t
o f f l ex ib le FDI po l i c ies i s su re to have a d i rec t and pos i t i ve
impac t on the Rea l Es ta te scenar io o f Ind ia .
Why Invest in Real Estate in India?
The Indian economy and the real estate sector in particular are high on itsride
toprosperity. As India's economic growth curve raises, real estate India has
emerged as one of themost appealing investment areas for domestic as well
as foreigninvestors. Indian realestate has huge potential demand in almost
every sector, butespecially commercial,residential, retail, industrial,
hospitality, healthcaree tc . Bu t max imum growth i sa t t r ibu ted to i t s
g rowth f rom the booming IT sector, since an estimated 70 per cent of
thenew construction is for the IT sector.
Key Facts
Selling and buying Indian property is now considered as the most profitable and
attractive business opportunity in the present real estate scenario in India. New
demands have added to strength of real estate markets across the commercial,
residential and retail sectors in India. Not surprisingly, demand for Indian property
has been increasingly steady for the past few years ant it has exceeded supply.
There has also been an upward swing on the real estate price values in the
recent years. Due to the huge demand and rising prices, investment and speculative
interest in real estate is growing while excess money supply, stock market gains
and policy changes are adding to the trend in favor of the real estate sector.
In the last one year, the capital values of the commercial office
spaces hasincreased by up to 40%owing to the increase in the demand from IT / ITES and
BPOsector across major metros in India.
India hasa distinct regulatory and financing management in place.
Real estate boom in India is supported byi t s own f lou r i sh ing
economy on asustainable basis. Here, growth of the property market is not a
result of renovationand overhauling; but rapiddevelopment that witness for India riding
the high growth wave.
E. MUTUAL FUNDS
They buy shares in companies with high potential for growth (some of
which might not pay dividends). The NAV of such fund will tend to be
erratic since these so-called growth shares experience high price
volatility. They also make quick profits by investing in the small cap
shares and by investing in the Initial Public Offering (IPO’s) of small
companies. However, growth strategy may differ from one fund to
another. Not all growth funds operate similarly.
Income Funds
The a im o f income funds i s to p rov ide regu la r and s teady
income to inves to rs . Such schemes generally invest in fixed income
securities such as bonds, corporate debentures an d Government securities.
Income Funds a re idea l fo r cap i ta l s tab i l i t y and regu la r income.
They aim to provide safety of principal and regular (monthly, quarterly or
semiannually) income by investing in bonds, corporate debentures and
other fixed incomeinstruments. The AMC in this case will also be
guided by ratings given to the issuer of debt by credit rating agencies.
Wherever a debt instrument is not rated, specific approvalof the board of the
AMC is required. Since most corporate debt is illiquid, the fund triesto provide
liquidity by investing in debt of varying maturity.
Balanced Funds
The aim of balanced funds is to provide both growth and regular
income. Such schemes periodically distribute a part of their earning and invest
both in equities and fixed income securities in the proportion indicated
in their offer documents. In a rising stock market, the NAV of these
schemes may not normally keep pace, or fall equally when the market falls.The
investors looking for a combination of income and moderate growth, the idea is
to get the best of both the worlds, equity shares and debt. The
proportion of the two asset classes depends on the fund manager’s
preference for risk against
return.Bu t because the investments are highly diversified, investors reduce thei
r market risk. Normally about 50 to 65 per cent of a portfolio's assets are invested
in equity shares.
Money Market Funds
The aim of money market funds is to provide easy liquidity, preservation of capital
and modera te income.
These schemes genera l l y inves t in sa fe r shor t - te rm ins t ruments .
Returns on these schemes may fluctuate depending upon the interest rates
prevailing inthe market. These are ideal for Corporate and individual investors as a
means to park their surplus funds for short periods. Also known as Liquid Plans,
these funds are a playon volatility in interest rates. Most of their investment is in
fixed-income instrumentswith maturity period of less than a year. Since they accept
money even for a few days,they are best used to park short-term money, which
otherwise earns a lower return in asavings bank account.
Advantages of Mutual Funds:
There are numerous benefits of investing in mutual funds and one of the key
reasons for i t s phenomena l success in the deve loped marke ts l i ke
US and UK is the range o f bene f i t s they o f fe r , wh ich a re
unmatched by mos t o ther inves tment avenues . We haveexplained
the key benefits in this section. The benefits have been broadly split
intouniversal benefits, applicable to all schemes and benefits
applicable specifically toopen-ended schemes.
Professional Management
The primary advantage of funds (at least theoretically) is the professional
managemento f the money . Inves to rs purchase funds because they
do no t have the t ime o r the expertise to manage their own portfolios. A
mutual fund is a relatively inexpensive wayfor a small investor to get a full-time
manager to make and monitor investments.
MutualFunds p rov ide the serv ices o f exper ienced and sk i l l ed
p ro fess iona ls , backed by adedicated investment research team that
analyses the performance and prospects of companies and selects suitable
investments to achieve the objectives of the scheme.
Diversification
M u t u a l F u n d s i n v e s t i n a n u m b e r o f c o m p a n i e s a c r o s s a
b r o a d c r o s s - s e c t i o n o f industries and sectors. This diversification
reduces the risk because seldom do all stocksdec l ine a t the same t ime
and in the same propor t ion . Cus tomers can ach ieve
th isdiversification through a Mutual Fund with far less money than you
can do on your own. By owning shares in a mutual fund instead of owning
individual stocks or bonds,your risk is spread out. The idea behind diversification
is to invest in a large number of assets so that a loss in any particular investment
is minimized by gains in others.
Liquidity
Just like an individual stock, a mutual fund allows the customers to
request that your shares be converted into cash at any time. In open-
end schemes, the investor gets themoney back promptly at net asset value
related prices from the Mutual Fund. In closed-end schemes, the units can be
sold on a stock exchange at the prevailing market price or the investor can
avail of the facility of direct repurchase at NAV related prices by
theMutual Fund.
Flexibility
Through fea tu res such as regu la r inves tment p lans , regu la r
w i thdrawa l p lans anddividend reinvestment plans, you can systematically
invest or withdraw funds accordingto your needs and convenience.
Choice of Schemes
Mutual Funds offer a family of schemes to suit the customers varying
needs over alifetime. Mutual funds offer a tremendous variety of schemes. This
variety is beneficialin two ways: first, it offers different types of schemes to
investors with different needsand risk appetites; secondly, it offers an opportunity
to an investor to invest sums acrossa variety of schemes, both debt and equity.
Tax benefits
Any income distributed after March 31, 2002 will be subject to tax in the
assessment of all Unit holders. However, as a measure of concession to
Unit holders of open-endedequity-oriented funds, income distributions for the
year ending March 31, 2003, will betaxed at a concessional rate of 10.5%.In
case of Individuals and Hindu Undivided Families a deduction up to
Rs.9, 000 fromthe Total Income will be admissible in respect of income from
investments specified inSection 80L, including income from Units of the Mutual
Fund. Units of the schemes arenot subject to Wealth-Tax and Gift-Tax
Limitations of Mutual funds
No Control over Costs
I nves to r has to pay inves tment management fees as long as he
rema ins in the fund.Investors who invest on their own can build their own
portfolios of shares, bonds and other securities Investing through funds
means he delegates this decision to fund managers.
Managing Portfolio of Funds
Availability of large number of funds can actually mean too much of
choice for the investor. He may again need advice on how to select a
fund to achieve hisobjectives.
No Guarantee
When the en t i re s tock marke t goes down, the Mutua l Fund shares
will also go down even if the portfolio is balanced though the risk is low.
Administrative fees or sales commissions are charged by all the funds to
compensate brokers and financial planners.
F. METALS
GOLD
Introduction
The rea l va lue o f go ld i s no t tha t i t p rov ides a qu ick ,
specu la t i ve f i x , bu t tha t
i t can provide a sure and steady means ofprotecting wealth and enhance the co
nsistency of returns. With gold's role as a portfolio diversifier, a hedge
against inflation and exposure to the dollar, there are several compelling
arguments for investing a portion of one's portfolio in the yellow metal.
Portfolio Diversification:
Most investment portfolios are invested primarily in traditional
financial assets such asstocks and bonds. The reason for holding diverse
investments is to protect the portfolioagainst fluctuations in the value of any
single asset class. Portfolios that contain gold aregenerally more robust and
better able to cope with market uncertainties than those thatdon't.Adding
gold to a portfolio introduces an entirely different class of asset. Gold is
unusual because it is both a commodity and a monetary asset and is an effective
diversifier because its performance tends to move independently of other
investments.
Dollar Hedge:
Gold is often cited as being an effective hedge against fluctuations in
the US dollar, theworld's main trading currency. If the dollar
appreciates, the dollar gold price falls andsimilarly a fall in the dollar
relative to the other main currencies produces a rise in thegold price.Like
all physical commodities, gold is an asset that bears no credit risk. Holding
assets inthe yellow metal involves no counterparty and is no one's liability. In
addition to that, the physical properties of the metal make it an excellent
alternative to money.
Durable:
Gold is durable. Unlike many of the other commodities examined, other things
remainingequal (i.e. assuming no changes in price), there is no
depreciation in the value of gold,other than any storage costs that
might apply. Gold is fungible. It is, at least in theory, infinitely divisible with
virtually no losses (other than any operational costs the processmight
incur).Furthermore, gold has a high value to volume ratio, which makes
it easily transferable,with low transport and storage costs. Moreover,
gold is one of the deepest commoditymarkets with the highest levels of
liquidity, second only to oil.
Inflation:
The purchasing power of gold has not diminished since Biblical times. According
to theOld Testament, during the reign of King Nebuchadnezzar, an
ounce of gold bought 350loaves o f b read . Today , an ounce o f go ld
s t i l l buys 350 loaves . The va lue o f go ld therefore, in terms of real
goods and services that it can buy, has remained remarkablystable.In
contrast, the purchasing power of many currencies has generally
declined. There is agrowing body of research to bolster gold's reputation as a
protector of wealth against theravages of inflation. Market cycles come
and go, but gold has maintained its long termvalue.
Safe Haven:
In volatile and uncertain times, we often witness a ‘flight to quality', as investors
seek to protect their capital by moving it into assets considered to be safer stores
of value.Gold is among only a handful of financial assets that is not matched by a
liability. It can provide insurance against extreme movements on the value of
traditional asset classes that can happen in unsettled times.
Liquidity
Gold's liquidity is one of its critical investment attributes. Gold can be
traded around the clock in large size, at narrower spreads and more rapidly than
many competing diversifiers or main stream investment.
SILVER
Introduction
Silver is a white colored shiny element that is highly ductile and malleable and is
used inmak ing jewe l ry , co ins and tab leware . I t i s a lso used in
chemica l exper iments as i t provides a high electrical and thermal
conductivity. It is found in the metallic state andalso in a large amount of minerals
mainly in argentite. That is why it is called argentumin LatinSilver is a metal that
is associated with metals like gold, lead, zinc and copper, though it’sunusual
properties makes it very different from them. It is used in making various kindsof
jewelry, as it is considered as a precious metal second to gold but its
contribution inthe various industrial sectors as a raw material makes it
unmatchable. No other metal canreplace silver as it has an endless number of
uses.Silver is produced throughout the world but an interesting fact
remains that the primarysource o f s i l ve r i s no t the s i l ve r m ines bu t
the o ther sources o f s i l ve r . S i l ve r m ines produce a small amount of
silver that is 25% of the world’s total production and the restof it is derived as
a by-product from gold mines (15%), copper mines (24%), lead andzinc
mines (34%) and other sources. The total production of silver in the world figures
to be around 615 million ounces and Mexico is the leading
silver producing country. Thetotal demand of silver in the world amounts to be
around 29 thousand tons. About 95% of this demand is contributed largely by
three industrial sectors namely photography, jewelry and silverware sectors.
The idea of silver as a holding asset and as a source of coinage is losing
popularity to the idea of silver as an industrial commodity. The demand of silver
in 2002 from these sectors was: -
Photography sector – 342 million ounces
Jewelry sector – 205 million ounces
Silverware sector – 259 million ounces
The countries that are the major consumers of silver are: -
United states,
Canada,
Mexico,
United Kingdom,
France,
Germany,
Italy,
Japan
India.
Production of silver in India
India hardly produces any silver and is basically a silver importing country. It
holds the20th place in the list of silver producing countries and the total
production of silver inIndia in 2004 was around 2.1 million ounces.
The three major silver producing states inIndia are: - Rajasthan, Gujarat,
Jharkhand.Rajasthan is the leading silver producing state in India with a
production of around 32thousand tons . Gu ja ra t fo l lows on the
second p lace w i th a p roduc t ion o f a round 20 thousand tons.
Indian Silver Market:
As mentioned above, India is primarily a silver importing country, as
the production of India is not sufficient to satisfy the ever-growing
domestic demand. The production of silver in India stands out at the figure
of around 2.1 million ounces placing it at the 20th position in the list of major
silver producing countries. The import of silver in India hovers over 110 million
ounces that shows the huge size of Indian domestic demand.However,
this import level fell sharply as a result of the decline in demand due to rise
insilver prices and inconsistent monsoon on which the income of the rural sector
depends.India stands third after United States and Japan among the leading
consumers of silver inthe world.
Major trading centers of Silver
London
Zurich
New York (COMEX)
Chicago (CBOT)
Hong Kong
Tokyo Commodity Exchange (TOCOM)
In India, silver is traded at the following places 1) Delhi 2) Indore 3)
Rajasthan 4)Madhya Pradesh 5) Mathura (Uttar Pradesh) 6) Rajkot (Gujarat).
Also, silver is traded in the Indian commodity exchanges like:-
National Commodity and Derivatives Exchange Ltd.
Multi Commodity Exchange of India Ltd.
National Multi Commodity Exchange of India Ltd.
G.COMMODITY
Introduction
A physical substance, such as food, grains, and metals, which is
interchangeable with another product of the same type, and which investors
buy or sell, usually through futures contracts. The price of the commodity is
subject to supply and demand. Risk is actuallythe reason exchange trading
of the basic agricultural products began. For example, afarmer risks
the cost of producing a product ready for market at some time in the
future because he doesn't know what the selling price will be.
Definition
Commodity is defined as any bulk good traded on an exchange or in the cash
market.One of the first forms of trade between individuals began by what is
calledthe barter system wherein goods were traded for goods. Lack of a
medium for exchange was thesole initiator of this system. People sold
what they had inexcess and bought what theylacked. Animals were the first
few commodities to be exchanged. Some examples ofcommodities include
grain, oats, gold, oil, beef,silver, and natural gas.
Commodities Exchange in India:-
In India, there are 26 registered commodities exchanges. Out of them only 3
commodities exchange offer online screen based trading system. They are
National Multi Commodities Exchange of India Limited(NMCE)
National Commodities and Derivatives Exchange of India Limited(NCDEX)
Multi Commodities Exchange of India Limited(MCX)
H. INSURANCE
Definition
The insurance that covers loss of an interest in a property due to legal
defectsand that is required if the property has a mortgage.Title insurance is a
police issued by title insurance company, assuring that thetitle is a clear in the
name of title owner. That means if owner wish to
salethe property, that time he don't
have any problem to sell that. If any problemcreates after selling the
property to the new owner that time title insurancecompany will pay the
damage for that or take action to solve that problem.
Origin and growth of Insurance Sector in India
Insurance sector in India is one of the booming sectors of the economy and is
growing atthe rate of 15-20 per cent annum. Together with banking services, it
contributes to about7 per cent to the country's GDP. Insurance is a
federal subject in India and Insuranceindustry in India is governed by
Insurance Act, 1938, the Life Insurance Corporation Act,1956 and General
Insurance Business (Nationalization) Act, 1972, Insurance Regulatory and
Development Authority (IRDA)Act, 1999 and other related Acts. The origin of life
insurance in India can be traced back to 1818 with the establishment of the
Oriental Life Insurance Company in Calcutta. It was conceived as a means to
providefor English Widows. In those days a higher premium was
charged for Indian lives thanthe non-Indian lives as Indian lives were
considered riskier for coverage. The BombayMutual Life Insurance Society
that started its business in 1870 was the first company tocharge same premium
for both Indian and non-Indian lives. In 1912, insurance regulationformally
began with the passing of Life Insurance Companies Act and the
ProvidentFund Act.By 1938, there were 176 insurance companies in
India. But a number of frauds during1920s and 1930s ta in ted the
image o f insurance indus t ry in Ind ia . In 1938 , the
f i r s tcomprehens ive leg is la t ion regard ing insurance was
i n t roduced w i th the pass ing o f Insurance Ac t o f 1938 tha t p rov i
ded s t r i c t S ta te Cont ro l over insurance bus iness . Insurance sector
in India grew at a faster pace after independence. In 1956, Governmentof India
brought together 245 Indian and foreign insurers and provident
societies under one nationalized monopoly corporation and formed Life
Insurance Corporation (LIC) byan Act of Parliament, viz. LIC Act, 1956,
with a capital contribution of Rs.5 cr.The (non-life) insurance
business/general insurance remained with the private sector till1972. There
were 107 private companies involved in the business of general
operationsand their operations were restricted to organized trade and
industry in large cities.
TheGenera l Insurance Bus iness (Na t iona l i sa t ion ) Ac t , 1972
na t iona l i sed the genera l insurance business in India with effect from
January 1, 1973. The 107 private
insurancecompan ies were ama lgamated and
g rouped in to four compan ies : Na t iona l InsuranceCompany, New
India Assurance Company, Oriental Insurance Company and
UnitedIndia Insurance Company. These were subsidiaries of the
General Insurance Company(GIC).
Insurance as Investment
Agreed, insurance may not be the best place to invest your hard-earned money.
But thereare su f f i c ien t reasons fo r one to be l ieve tha t i t can be a
h igh ly luc ra t i ve avenue to facilitate savings. People often talk about yield
on investment and tend to compare their values with those available on
various insurance schemes. This is particularlytypicalw i th in the
Ind ian sub-con t inen t where one conven ien t l y fo rge ts the
e lement o f r i sk covered by life insurance.It is extremely unfair to compare
the performance of insurance against other investmentswithout considering
the core features of insurance. The very essence of insurance is
to protect your family from the uncertainty of your life. Hence it proves very logic
al toevaluate the costs involved towards this feature. Ask yourself this
questionwhen you pay insurance premium for your car, do you get
anything if fortunately nomishap happens? This means that you spent the
amount to secure a valuable property.Hence you must accept that out of the total
amount paid by you for your life insurance, ascertain amount is used for
providing the risk cover and only the balance can be utilized assavings.In other
words, the total premium you pay minus the amount evaluated as the
cost of insurance must be considered as the amount invested to get the
maturity amount. If youcalculate the yield from returns, you will be in for a
surprise.
Indian Insurance Industry
I nsurance may be descr ibed as a soc ia l dev ice to reduce o r
e l im ina te r i sk o f l i f e and property. Under the plan of insurance, a
large number of people associate themselves bysharing risk, attached
to individual. The risk, which can be insured against include fire,the
per i l o f sea , dea th , inc iden t , & burg la ry . Any r i sk con t ingen t
upon these may be insured against at a premium commensurate with the risk
involved.Insurance i s ac tua l l y a con t rac t be tween 2 par t ies
whereby one par ty ca l led insure r undertakes in exchange for a fixed
sum called premium to pay the other party happeningof a certain event.
Insurance is a contract whereby, in return for the payment of premium by the
insured, the insurers pay the financial losses suffered by the insured as a
result of the occurrence of unforeseen events.Wi th the he lp o f Insurance ,
la rge number o f peop le exposed to a s im i la r r i sk
makecontributions to a common fund out of which the losses suffered by the
unfortunate few,due to accidental events, are made good
I. TAX SAVING SCHEME
Public Provident Fund (PPF):
Introduction:
Under this scheme, there is a return at the -interest rate of 8% p.a. The
minimum investment limit is Rs.500/- and limitation is Rs.70, 000/-. It
can be obtained any time throughout the year. It can be operated either
single or jointly.In case of minor, with parent/guardian, there is also a
facility of nomination inthis scheme.
Highlights:
The Public P r o v i d e n t F u n d S c h e m e i s a s t a t u t o r y s c h e m e o f
t h e CentralGovernment of India.
The Scheme is for 15 years.
The rate of interest is 8% compounded annually.
The minimum deposit is 500/- and maximum is Rs. 70,000/- in a financial year.
One deposit with a minimum amount of Rs.500/- is mandatory in each
financial year.
The deposit can be in lump sum or in convenient installments, not more than 12
installments in a year or two installments in a month subject to total deposit of Rs.70,000/-.
It is not necessary to make a deposit in every month of the year. The amount of deposit can
be varied to suit the convenience of the account holders.
The account in which deposits are not made for any reasons is treated
asdiscontinued account and such account cannot be closed before maturity.
The discontinued account can be activated by payment of minimum deposit of Rs.500/- with
default fee of Rs.50/- for each defaulted year.
Account can be opened by an individual or a minor through the guardian.
The depos i t s sha l l be in mu l t ip le o f Rs .5 / - sub jec t to m in imum
amount of Rs.500/-.
The depos i t s in a m inor accoun t i s c lubbed w i th the depos i t s o f
the accoun t o f the guard ian fo r the l im i t s i f Rs .70 ,000 / - .
The PPF scheme is operated through Post Office and Nationalized banks.
Deposits in PPF qualify for rebate under section 80-C of Income Tax Act.
Deposits are exempt from wealth tax.
Nomination facility available. Best for long term investment.
Why You Should Invest in a Public Provident Fund Account?
Your money in the PPF account is perfectly safe, earns 8% (at the moment),
qualifies for Section 80C of the Income Tax Act, and at the moment is
EEE (Exempt ExemptExempt -the money you invest, the interest earned, and
the final withdraw able amount are all taxexempt).
You can invest a low of 500 rupees and a high of 70,000 rupees a year (over a
maximum of twelve installments per year). You are allowed to withdraw
money or take a loan; there’s a weird formula to compute the same, but 1
advice against doing so ever.
If you invest Rs.10,000 a year your final balance stands at Rs.293,243.
If you invest 35,000 rupees a year the final balance becomes 1,026,350 rupees;
at 70,000 rupees a year, the final balance is a whopping 2,052,700 rupees. At
the end of 15 years, you can extend your subscription in blocks of 5 years or else close the
account and reap the benefits. The RPF is a great way to set aside money for say
your child's higher education. You can open a PPF account at State Bank
of India (SBI) or any of its subsidiaries or at the local post office. An
individual is allowed to have only one PPF account.
COMPANY PROFILE
History
Reliance Capital Limited (RCL) was incorporated in year 1986 at Ahmedabad in Gujarat
as Reliance Capital & Finance Trust Limited. The name RCL came into effect from
January 5, 1995. In 2002, RCL shifted its registered office to Jamnagar in Gujarat
before it finally moved to Mumbai in Maharashtra, in 2006.
In 2006, Reliance Capital Ventures Limited merged with RCL and with this merger the
shareholder base of RCL rose from 0.15 million shareholders to 1.3 million.
RCL entered the Capital Market with a maiden public issue in 1990 and in subsequent
years further tapped the capital market through rights issue and public issues. The
equity shares were initially listed on the Ahmedabad Stock Exchange and The Stock
Exchange Mumbai. Presently the shares are listed on The Stock Exchange Mumbai and
the National Stock Exchange of India.
RCL in the initial years engaged itself in steady annuity yielding businesses such as
leasing, bill discounting, and inter-corporate deposits. Later, in 1993 diversified its
business in the areas of portfolio investment, lending against securities, custodial
services, money market operations, project finance advisory services, and investment
banking.
RCL was accredited a Category 1 Merchant banker by the Securities Exchange Board
of India (SEBI). It had lead managed/co-managed 15 issues of an aggregate value of
Rs. 400 crore and had underwritten 33 issues for an aggregate value of Rs. 550 crore.
All these companies were listed on various exchanges.
RCL obtained its registration as a Non-banking Finance Company (NBFC) in December
1998. In view of the regulatory requirements RCL surrendered its Merchant Banking
License.
RCL has since diversified its activities in the areas of asset management and mutual
fund; life and general insurance; consumer finance and industrial finance; stock broking;
depository services; private equity and proprietary investments; exchanges, asset
reconstruction; distribution of financial products and other activities in financial services.
Overview
Reliance Capital, a constituent of CNX Nifty Junior and MSCI India, is a part of the
Reliance Group. It is one of India's leading and amongst most valuable financial
services companies in the private sector.
Reliance Capital has interests in asset management and mutual funds; life and general
insurance; commercial finance; equities and commodities broking; investment banking;
wealth management services; distribution of financial products; exchanges; private
equity; asset reconstruction; proprietary investments and other activities in financial
services.
Reliance Mutual Fund is amongst top two Mutual Funds in India with over six million
investor folios. Reliance Life Insurance and Reliance General Insurance are amongst
the leading private sector insurers in India. Reliance Securities is one of India’s leading
retail broking houses. Reliance Money is one of India’s leading distributors of financial
products and services.
Reliance Capital has a net worth of Rs. 11,991 crore (US$ 2.2 billion) and total assets of
Rs. 40,588 crore (US$ 7.5 billion) as on March 31, 2013.
Business mix of Reliance Capital
Asset
Management
Mutual Fund, Offshore Fund, Pension fund, Portfolio
Management
Insurance Life Insurance, General Insurance
Commercial
Finance
Mortgages, Loans against Property , SME Loans, Loans for
Vehicles, Loans for Construction Equipment, Business Loans,
Infrastructure financing
Broking and
Distribution
Equities, Commodities and Derivatives, Wealth Management
Services, Portfolio Management Services, Investment Banking,
Foreign Exchange, Third Party Products
Other
Businesses
Private Equity, Institutional Broking, Asset Reconstruction,
Venture Capital
Chairman’s Profile
Shri Anil D. Ambani, regarded as one of the foremost corporate
leaders of contemporary India, Shri Anil D. Ambani, is the
Chairman of Reliance Capital Limited, Reliance Infrastructure
Limited, Reliance Communications Limited and Reliance Power
Limited. He is also on the Board of Reliance Infratel Limited and
Reliance Anil Dhirubhai Ambani Group Limited. He is the President
of the Dhirubhai Ambani Institute of Information and Communication Technology,
Gandhinagar, Gujarat.
An MBA from the Wharton School of the University of Pennsylvania, Shri Ambani is
credited with pioneering several path-breaking financial innovations in the Indian capital
markets. He spearheaded the country’s first forays into overseas capital markets with
international public offerings of global depositary receipts, convertibles and bonds.
Under his Chairmanship, the constituent companies of the Reliance Group have raised
nearly US$ 7 billion from global financial markets in a period of less than 3 years.
Shri Ambani has been associated with a number of prestigious academic institutions in
India and abroad.
He is currently a member of:
Wharton Board of Overseers, The Wharton School, USA
Board of Governors, Indian Institute of Management (IIM), Ahmedabad
Executive Board, Indian School of Business (ISB), Hyderabad
In June 2004, Shri Ambani was elected as an Independent member of the Rajya Sabha
– Upper House, Parliament of India, a position he chose to resign voluntarily on March
29, 2006.
Awards and Achievements
Awarded by Light Readings as the Person of the Year – 2008 for outstanding
achievements in the communication industry.
Voted 'the Businessman of the Year' in a poll conducted by The Times of India –
TNS, December, 2006.
Voted the 'Best role model' among business leaders in the biannual Mood of the
Nation poll conducted by India Today magazine, August 2006.
Conferred 'the CEO of the Year 2004' in the Platts Global Energy Awards.
Conferred ‘The Entrepreneur of the Decade Award’ by the Bombay Management
Association, October 2002.
Awarded the First Wharton Indian Alumni Award by the Wharton India Economic
Forum (WIEF) in recognition of his contribution to the establishment of Reliance
as a global leader in many of its business areas, December, 2001.
Short Biographic Profile
Anil Dhirubhai Ambani
Born on: June 4, 1959
Birthplace: Mumbai, India
Father's name: Dhirubhai Hirachand Ambani
Mother's name: Kokilaben Dhirubhai Ambani
Education: Bachelor of Science from the University of Mumbai and
MBA from The Wharton School, University of Pennsylvania, USA
Family: Married to Tina and has two sons Jai Anmol and Jai Anshul
Business address: Reliance Communications Limited, I Block, 2nd
Floor, Dhirubhai Ambani Knowledge City, Navi Mumbai - 400710, India
Telephone: +91 22 3037 5522, +91 22 3037 5534
Fax: +91 22 3037 5577
E-mail:anil.ambani@relianceada.com
Vision
Reliance Capital's vision is that:
By 2015, it will be a company that is known as:
"The most profitable, innovative, and most trusted financial services company in India
and in the emerging markets".
In achieving this vision, the company will be both customer-centric and innovation-
driven.
Social Responsibility
Organizations, like individuals, depend for their survival, sustenance and growth on the
support and goodwill of the communities of which they are an integral part, and must
pay back this generosity in every way they can...
This ethical standpoint, derived from the vision of our founder, lies at the heart of the
CSR philosophy of the Reliance Group.
Reliance Group is committed to being an ideal corporate citizen and doing more than its
fair share to support various deserving causes, in the field of medicine in particular;
setting up and operating Kokilaben Dhirubhai Ambani Hospital. Reliance Capital
supports this and other CSR ventures.
Each of Reliance Capital’s different businesses vigorously implements their own CSR
initiatives. Indeed, their CSR efforts are counted when calculating the business’s
performance. Some of the work done by them include blood donation camps, donation
of old computers to various schools, donations are given to NGOs working with children
or the aged or to the Missionaries of Charity across the country, direct cash aid for
paying the medical expenses of life threatening requirements for some under-privileged
people etc.
Other businesses work with self-help groups to provide them with funding and other
advice to function better. Some other businesses have also worked with educational
institutions to promote financial literacy and financial inclusiveness.
This is in addition to supporting the charitable activities of the Reliance Group, both in
healthcare and in caring for older people – Silvers. The Company also follows an active
program of energy abatement. This is not just in its corporate office, but also in other
large offices in big cities.
Reliance Capital Limited Competition
Indians rely on Reliance Capital to provide financial services. The company, which
is part of the Anil Dhirubhai Ambani Group, offers non-banking services including asset
management, mutual funds, life and general insurance, private equity and proprietary
investments, consumer finance, and stock brokerage services through its various
subsidiaries. Reliance Capital has numerous investments in the infrastructure sector
including power, ports, and telecommunications in addition to dabbling in the
entertainment sector with the acquisition of a controlling stake of Adlab Films in 2005.
Top Competitors for Reliance Capital Limited
Standard Chartered PLC
ICICI Bank Limited
Bank of India
STANDARD CHARTERED PLC
We've been in India for over 150 years
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Customers and Clients Come First
We use our global capabilities and deep local knowledge in India to provide a wide-
range of products and services to meet the needs of our personal banking and business
customers.
We build our products and services around you and have a number of commitments to
help ensure that our customer have the best possible experience with us.
Sponsorships
We're proud sponsors of:
The Standard Chartered Mumbai Marathon - title sponsor for the last ten years
Asia Cup - official partner of the bi-annual cricket tournament
The Economic Times Awards for Corporate Excellence - title sponsor from 2012 to 2016
Liverpool Football Club - our four year sponsorship started in June 2012.
Awards
Our products and services are often recognised by industry leaders. Here are a few of
our recent awards:
Best Foreign Bank 2012 - Bloomberg Financial Leadership Awards
Financial Advisor of the Year Award 2012 - UTI CNBC
Best Private Bank in India by the Asian Private Banker at the Awards for Distinction
2012.
Listings and Subsidiaries
Standard Chartered PLC, our UK based parent, became the first foreign company to list
in India through the issuance of Indian Depository Receipts in June 2010.
We also have a number of subsidiaries operating in India:
Standard Chartered Securities (India) Ltd, the vehicle for the equities business
Standard Chartered Private Equity Advisory (India) Private Limited
Standard Chartered Investments and Loans (India) Limited
Standard Chartered Finance limited and SCOPE International.
History
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial
institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was
reduced to 46% through a public offering of shares in India in fiscal 1998, an equity
offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition
of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary
market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was
formed in 1955 at the initiative of the World Bank, the Government of India and
representatives of Indian industry. The principal objective was to create a development
financial institution for providing medium-term and long-term project financing to Indian
businesses.
In the 1990s, ICICI transformed its business from a development financial institution
offering only project finance to a diversified financial services group offering a wide
variety of products and services, both directly and through a number of subsidiaries and
affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first
bank or financial institution from non-Japan Asia to be listed on the NYSE.
After consideration of various corporate structuring alternatives in the context of the
emerging competitive scenario in the Indian banking industry, and the move towards
universal banking, the managements of ICICI and ICICI Bank formed the view that the
merger of ICICI with ICICI Bank would be the optimal strategic alternative for both
entities, and would create the optimal legal structure for the ICICI group's universal
banking strategy. The merger would enhance value for ICICI shareholders through the
merged entity's access to low-cost deposits, greater opportunities for earning fee-based
income and the ability to participate in the payments system and provide transaction-
banking services. The merger would enhance value for ICICI Bank shareholders
through a large capital base and scale of operations, seamless access to ICICI's strong
corporate relationships built up over five decades, entry into new business segments,
higher market share in various business segments, particularly fee-based services, and
access to the vast talent pool of ICICI and its subsidiaries.
In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger
of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial
Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was
approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court
of Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at
Mumbai and the Reserve Bank of India in April 2002. Consequent to the merger, the
ICICI group's financing and banking operations, both wholesale and retail, have been
integrated in a single entity.
Investor Relations
ICICI Bank disseminates information on its operations and initiatives on a regular basis.
The ICICI Bank website serves as a key investor awareness facility, allowing
stakeholders to access information on ICICI Bank at their convenience. ICICI Bank's
dedicated investor relations personnel play a proactive role in disseminating information
to both analysts and investors and respond to specific queries.
Awards
ICICI Bank ranks 10th in Fortune India's list of 50 most admired companies in India.
Ms. Chanda Kochhar, MD & CEO, has been ranked as the most powerful business
woman in India in the Forbes' list of 'The World's 100 Most Powerful Women 2013'
ICICI Bank Limited has been conferred the Best Remittance Business award at The
Asian Banker's International Excellence in Retail Financial Services 2013 Awards
ceremony.
ICICI Bank was honored with the Medici Innovation Hall of Fame Award, instituted by
The Medici Institute in collaboration with the Medici Group, USA.
ICICI Bank and its IT partner Fundtech won The Asian Banker Technology
Implementation Award for the Convergence Banking project from Asian Banker.
Ms Chanda Kochhar received the 'Transformation Leader Award' by NDTV Profit
Business Leadership Awards 2012.
For the second consecutive year, Mr. N.S.Kannan, Executive Director & CFO, received
the "Best Performing CFO", in the Banking / Financial Services category by CNBC - TV
18.
For the third year in a row, Ms. Chanda Kochhar, Managing Director & CEO, is in the
Power List 2013 of 25 most powerful women in India, by India Today.
Ms. Chanda Kochhar is the only Indian to be featured in the Dow Jones list of Most
Influential Female Executives in the World of the last decade. She is ranked 12th in the
global list.
ICICI Bank awarded the Most Admired Infrastructure Debt Financer and PPP Project of
the Year: Yamuna Expressway Project, in the 5th KPMG Infrastructure Today Awards
by ASAPP Media Information Group, publishers of Infrastructure Today in association
with KPMG
For the 4th consecutive year, ICICI Bank won the Celent Model Bank for the next
generation technology oriented banking solutions.
ICICI Bank was awarded a "Special IT Innovation Award" by Lenovo - NASSCOM and
CNBC-TV18.
ICICI Bank was the winner of "6th Loyalty Awards" for My Savings Rewards by AIMIA
(global leader in Loyalty).
ICICI Bank UK PLC's online savings product HiSAVE won the "Highly Commended"
(2nd rank) at the Consumer Moneyfacts Awards.
ICICI Bank received the "Gram Samvad",Service for Low cost/Small budget marketing
initiative Award by Rural Marketing Association of India (RMAI).
Ms. Chanda Kochhar awarded the Businessperson Of The Year 2012 by Business
India. She is the first woman recipient of this award in 31 years.
ICICI Bank won the Best domestic bank, India by The Asset Triple A Country Awards.
History
Bank of India was founded on 7th September, 1906 by a group of eminent businessmen
from Mumbai. The Bank was under private ownership and control till July 1969 when it
was nationalized along with 13 other banks.
Beginning with one office in Mumbai, with a paid-up capital of Rs.50 lakh and 50
employees, the Bank has made a rapid growth over the years and blossomed into a
mighty institution with a strong national presence and sizable international operations. In
business volume, the Bank occupies a premier position among the nationalized banks.
The Bank has 4322 branches in India spread over all states/ union territories including
specialized branches. These branches are controlled through 50 Zonal Offices. There
are 29 branches/ offices (including five representative offices) and 3 Subsidiaries and 1
joint venture abroad.
The Bank came out with its maiden public issue in 1997 and follow on Qualified
Institutions Placement in February 2008. . Total number of shareholders as on
30/09/2009 is 2, 15,790.
While firmly adhering to a policy of prudence and caution, the Bank has been in the
forefront of introducing various innovative services and systems. Business has been
conducted with the successful blend of traditional values and ethics and the most
modern infrastructure. The Bank has been the first among the nationalized banks to
establish a fully computerized branch and ATM facility at the Mahalaxmi Branch at
Mumbai way back in 1989. The Bank is also a Founder Member of SWIFT in India. It
pioneered the introduction of the Health Code System in 1982, for evaluating/ rating its
credit portfolio.
Presently Bank has overseas presence in 20 foreign countries spread over 5 continents
– with 53 offices including 4 Subsidiaries, 4 Representative Offices and 1 Joint Venture,
at key banking and financial centers viz., Tokyo, Singapore, Hong Kong, London,
Jersey, Paris and New York.
Contribution of foreign branches in the global business of the Bank as at 31.03.2013 is
as under:
Deposits 22.98%
Advances 30.36%
Business Mix 26.19%
Vision
To become the bank of choice for corporates, medium business and Upmarket Retail
customers and development banking for small business, mass market rural market.
Mission
To provide superior, proactive banking services to niche markets globally, while
providing cost effective, responsive services to others in our role as a development
bank, and in doing so, meet the requirements of our stakeholders.
Quality Policy
We at Bank of India are committed to become the bank of choice by providing
Superior, Pro-Active, Innovative, State of The Art banking services with an attitude
of care and concern for the customers and patrons.
L&T FINANCE HOLDINGS
Overview
L&T Finance Holdings Ltd. is a financial holding company offering a diverse range of
financial products and services across the corporate, retail, housing and infrastructure
finance sectors, as well as mutual fund products and investment management services,
through direct and indirect wholly-owned subsidiaries. Our Company is registered with
the RBI as an NBFC.
We are promoted by Larsen & Toubro Limited, one of the leading companies in India,
with interests in engineering, construction, electrical and electronics manufacturing and
services, information technology and financial services.
We are headquartered in Mumbai, and have a presence in 23 states in India. Our
network of offices has been established to cater to the growing business needs of our
diverse customer base, which includes individual retail customers as well as large
companies, banks, multinational companies and small and medium-enterprises, and to
provide them with satisfactory customer service according to their varying requirements.
Our operations are arranged into five business groups, being the Infrastructure Finance
Group, the Retail Finance Group, the Corporate Finance Group, the Investment
Management Group and the Housing Finance Group.
Infrastructure Finance Group
Our wholly-owned subsidiary, L&T Infrastructure Finance Company Limited (L&T Infra),
conducts our infrastructure finance business (our Infrastructure Finance Group) which
provides financial products and services to our customers engaged in infrastructure
development and construction, with a focus on the power, roads, telecommunications,
oil and gas and ports sectors in India. L&T Infra is registered with the RBI as a
Systemically Important Non Deposit-accepting Non-Banking Financial Company
(NBFC-ND-SI) and an Infrastructure Finance Company (IFC), which allows it to optimize
its capital structure by diversifying its borrowings and accessing long-term funding
resources, thereby expanding its financing operations while maintaining its competitive
cost of funds. In addition, L&T Infra has been notified as a Public Financial Institution
(PFI) under Section 4A of the Companies Act.
Retail Finance Group and Corporate Finance Group
Our wholly-owned subsidiary, L&T Finance Limited (L&T Finance), conducts our retail
finance business and our corporate finance business (our Retail Finance
Group and Corporate Finance Group, respectively). L&T Finance is registered with
the RBI as a Systemically Important Non Deposit-accepting Non-Banking Financial
Company (NBFC-ND-SI) and an Asset Finance Company (AFC).
Our Retail Finance Group provides financing to our retail customers for the acquisition
of income generating assets and for income-generating activities. It comprises the
segments of construction equipment finance, transportation equipment finance, rural
products finance and microfinance. In addition, our Retail Finance Group caters to the
non-financing needs of our retail customers through the distribution of in-house financial
products such as insurance and mutual funds.
Our Corporate Finance Group provides financial products and services to our
corporate customers, and comprises the segments of corporate loans and leases (in the
form of asset-backed loans, term loans, receivables discounting, short-term working
capital facilities and operating and finance leases), supply chain finance (which includes
vendor and dealer finance products) and capital markets products.
Company Structure
Larsen & Toubro Limited is the promoter of our company. L&T was
incorporated on February 7, 1946. L&T is one of the leading companies in India,
with interests in engineering, construction, electrical and electronics
manufacturing and services, information technology and financial services.
L&T Finance Holdings Limited was incorporated in 2008, and is
registered with the RBI as an NBFC-ND-SI and has applied to the RBI for
registration as a CIC-ND-SI.
L&T Infra was incorporated in 2006, and is registered with the RBI as an
NBFC-ND-SI, is classified as an IFC and has been notified as a PFI under
Section 4A of the Companies Act. L&T Infra is the entity through which we
conduct the operations of our Infrastructure Finance Group.
L&T Finance was incorporated in 1994, and is registered with the RBI as an
NBFC-ND-SI and classified as an AFC. L&T Finance is the entity through which
we conduct the operations of our Retail and Corporate Finance Groups.
L&T Investment Management formerly DBS Cholamandalam Asset
Management Limited, was acquired by L&T Finance on January 20, 2010,
together with DBS Cholamandalam Trustees Limited, the trustee company for
DBS Chola Mutual Fund. DBS Cholamandalam Asset Management Limited, DBS
Cholamandalam Trustees Limited and DBS Chola Mutual Fund were renamed
"L&T Investment Management Limited", "L&T Mutual Fund Trustee Limited" and
"L&T Mutual Fund" respectively in February 2010. Further on November 23,
2012, L&TIM and L&TMFTL acquired L&T Fund Management Private Limited
(formerly known as FIL Fund Management Private Limited) and L&T Trustee
Services Private Limited (formerly known as FIL Trustee Company Private
Limited respectively). L&TIM is the entity through which we conduct the mutual
fund business in India.
L&T Housing Finance Limited formerly Indo Pacific Housing Finance
Limited, is registered with the National Housing Bank as a housing finance
company under the NHB Act, 1987. Incorporated in 1994, it was acquired by L&T
Finance Holdings on October 9, 2012 and was later renamed "L&T Housing
Finance Limited" with effect from December 4, 2012. L&T Housing Finance is the
entity through which we conduct the operations of our Housing Finance Group.
FamilyCredit Limited is registered with the RBI as an NBFC-ND-SI. It was
acquired by L&T Finance Holdings on December 31, 2012.
L&T FinCorp Limited is registered with the RBI as an NBFC-ND-SI.
L&T Capital Markets is a subsidiary of L&T Finance Holdings Limited. It
focuses on a client-centric approach, robust execution capabilities and attentive
client servicing. Its purpose is to create long-term value and adhere to the
highest principles of integrity, transparency and ethical practices, creating long
lasting relationships based on trust.
L&T Capital Market's customized execution addresses unique and different
needs of the wealthy and their heirs. Its methodology and approach identify
Investment Managers of different styles and asset classes who have
demonstrated their ability in generating consistent long-term risk-adjusted
returns.
The following solutions are offered:
Wealth Advisory
Estate Planning
Financial Planning
Alternate Investments
Mutual Funds
L&T Access serves as the non-branch acquisition engine for the L&T
Financial Services group, aimed at improving efficiency and productivity at the
overall group level.
Furthermore, we have made the following investments:
We hold less than 5% interests in City Union Bank Limited;
We hold an 8.90% interest in Invent ARC and in Invent/10-11/S3 Trust
We hold a 30% interest in NAC Infrastructure & Equipment Limited
Milestone
Key Strengths
MUTHOOT FINANCE
OVERVIEW
“Desire is the key to motivation, but it’s determination and commitment to an unrelenting
pursuit of your goal — a commitment to excellence — that will enable you to attain the
success you seek.” — Mario Andretti
Growth and money cannot sustain an organization for as long as uniqueness and
excellence can. We at Muthoot Finance Limited are harbingers of this belief since our
inception. Moreover, being a part of the rapidly growing family, Muthoot Group, fosters
in our culture, profound values of integrity, honesty and humility.
Knowing Our Roots
These values were inculcated when the company was formed, with the vision of
“creating an organization capable of serving the versatile needs of a growing Indian
financial market”. The purpose at hand is to identify and utilize untapped sections of the
market and reach out to as wide an audience as possible.
The focus of the company is on creating liquidity with an asset class, namely gold, that
has the largest consumer market in India. We see it as one of the preeminent ways of
creating wealth in the economy. With over 6 million loan accounts in its loan portfolio,
Muthoot Finance is recognized as a pioneer in gold financing. Undoubtedly, gold
funding is our niche; nonetheless our lendings are not restricted to gold loans. An
assorted asset portfolio impels us on the road to pioneer a competent financial market.
The Larger Picture
At Muthoot Finance, we understand the responsibility that rests on our shoulders. Being
a company with an increasing asset base, we take upon ourselves the onus of ensuring
smoother processes of monetary transactions, whether they are money transfer, gold
loans or gold bonds.
Being entrusted with the purpose of delivering value enables us to consider each
customer’s need as unique. We cater to gold loan requirements varying from a principle
loan amount of Rs. 1500 up to the maximum extent of Rs 10,000,000 (1 crore). This is
instrumental in accomplishing our objective of holistic growth for the economy.
Numbers Speak
Trusting numbers alone would be a myopic view of estimating our growth. However,
they do give an insight into our strength. We’ve deployed 25,000 people in over 4100
branches spread over 21 states and 4 Union Territories. With such rapid growth
potential, Muthoot Finance is an a market player dedicated to make a positive impact on
countless people, ranging from farmers to salaried employees seeking financial aid. A
diversified portfolio of assets is what sets us apart from the competition. It is
accentuated by the unbridled trust that our customers have bestowed on us, over the
years. It is this mutual trust that has, in turn, and over the years, created the long
relationships between Muthoot Finance and its invaluable customers. Such conviction
is, indeed, humbling.
SOCIAL RESPONSIBILITY
Corporate Social Responsibility
The Muthoot Group nurtures a commitment of giving back manifold to the society. In the
wake of an age where the society expects the corporate sector to step in and take up
the responsibility for community growth, we at the Muthoot Group focus our CSR
initiatives towards sustainability.
Our Beliefs
At Muthoot Finance Ltd. we foster a spirit of reliability. We work towards a new
framework driven by trust, and propelled by integrity. The core purpose is to create
awareness and consistency for those classes of the economy that have little or no trust
in the financial system of the country. We want to reinforce their belief in the economic
system of the country by being a bankable organization. Our value system has fortified
the roots of our heritage. It is due to these indispensible values and our commitment to
keeping the customer first that we have been rapidly growing since the past 126 years
Components of CSR at Muthoot Finance
Corporate Social Responsibility at Muthoot Finance Ltd. comprises an economic, legal
as well as philanthropic outlook that society entrusts an organization with. Education,
healthcare, sanitation, financial parity and the environment are only a few constituents
of the elaborate purview of Muthoot Finance Ltd’s CSR.
Our Efforts
As a beacon of CSR, Muthoot Finance Ltd. has been continually setting benchmarks for
responsibility towards corporates as well as the community. All CSR initiatives of
Muthoot Finance are implemented by the Muthoot M George Foundation. The efforts
are propelled by the motive of creating a balance between corporate practices and
community welfare by harnessing untapped resources that can make
considerable differences to economic and social health. We commit our social
responsibility initiatives to a sustainable future.
MILESTONE
The growth story
1887 The Group comes into being as a trading business
in a Kerala village.
1939 Commences Gold Loan business.
2001 Muthoot Finance receives RBI License to function as an NBFC.
2004 Receives highest rating of F1 from Fitch Ratings for a shirt-term
debt of Rs. 200 mn.
2005 Retail Loan and debenture portfolio crosses Rs. 5 bn.
2007
Retail Loan portfolio crosses Rs. 14 bn.
Net owned funds cross Rs. 1 bn.
Accorded SI-ND-NBFC status.
Branch network crosses 500 branches.
2008
Retail Loan portfolio crosses Rs. 21 bn.
Retail debenture portfolio crosses Rs. 1 bn.
Fitch affirms the F1 short term debt rating with an enhanced amount of
Rs. 800 mn.
Converted into a public limited company.
2009
Retail Loan portfolio crosses Rs. 33 bn.
Retail debenture portfolio crosses Rs. 19 bn.
Net owned funds crosses Rs. 3 bn.
Gross annual income crosses Rs. 6 bn.
Bank credit limits cross INR 10 bn.
Branch network crosses 900 branches.
2010
Retail Loan portfolio crosses Rs. 74 bn.
Retail debenture portfolio crosses Rs. 27 bn.
CRISIL assigns ‘P1+’ rating for short term debt of Rs. 4 bn, ICRA
assigns A1+ for short term debt of Rs. 2 bn.
Net owned funds crosses Rs. 5 bn.
Gross annual income crosses Rs. 10 bn.
Bank credit limits cross Rs. 17 bn.
Branch network crosses 1,600 branches.
2011 Retail Loan portfolio crosses Rs. 158 bn.
Retail debenture portfolio crosses Rs. 39 bn.
CRISIL assigns long-term rating of AA- Stable for Rs. 1 bn subordinated
debt issueand for Rs. 4 bn non-convertible debentures issue
respectively.
ICRA assigns long-term rating of AA- Stable for Rs. 1 bn subordinated
debt issueand for Rs. 2 bn non-convertible debentures issue
respectively.
PE Investments of Rs. 2556.85 mn in the Company by Matrix partners,
LLC the Welcome Trust, Kotak PE, Kotak Investments and Baring India
PE.
Net owned funds cross Rs. 13 bn.
Gross annual income crosses Rs. 23 bn.
Bank credit limit crosses Rs. 60 bn.
Branch network crosses 2,700 branches.
2012 Retail Loan portfolio crosses Rs. 246 bn.
Retail debenture portfolio crosses Rs. 66 bn.
ICRA assigns long-term rating of AA- Stable and short-term rating
of A1+ for Rs. 9,353 cr Line of credit.
Successful IPO of Rs. 9,012.50 mn in April 2011.
Raised Rs. 6.93 bn through Non-convertible Debenture Public Issue
- Series I.
Raised Rs. 4.59 bn through Non-convertible Debenture Public Issue
- Series II.
Net owned funds crossed Rs. 29 bn.
Gross annual income crosses Rs. 45 bn.
Bank credit limit crosses Rs. 92 bn.
Branch network crosses 3,600 branches.
2013
Raises INR 2.59 bn through Non-convertible Debenture Public Issue
- Series III.
Obtains RBI License to start operating 9,000 White Label ATMs
TRADE PROFILE
Reliance Money is carrying such as it is giving a service of online trading with less
brokerage charge, and it also having financial products such as Life Insurance, General
Insurance, Investment facility in Equity, Mutual Funds, PMS, and also it is carrying a money
transfer and money exchange and also dealing with gold coins.
PRODUCT & SERVICES:
A. TRADING PORTAL:
1. EQUITY BROKING: An equity investment generally refers to the buying and holding of shares of stock on
a stock market by individuals and firms in anticipation of income from dividends and capital
gains, as the value of the stock rises. Typically equity holders receive voting rights, meaning that
they can vote on candidates for the board of directors (shown on a proxy statement received by
the investor) as well as certain major transactions, and residual rights, meaning that they share
the company's profits, as well as recover some of the company's assets in the event that it
folds, although they generally have the lowest priority in recovering their investment.
The Equities markets offers range of investment opportunities and we at Reliance
Securities bring along with us the added advantage of our innovative products to suite your
investment profile and help you make the right decision.
Under Reliance Securities, equity broking is divided amongst eight heads called equity
financial services:
DELIVERY CASH:
The same-day settlement of a currency trade in the forex market. This means that
delivery and settlement of the transaction occur on the same date that the currency
trade is made. In order for this to occur, the forex position must be opened and closed
within the same trading day. Also referred to as "same-day settlement." Delivery Cash is
further divided into two sub heads:
DELIVERY:
DELIVERY (CNC)
DELIVERY (NRML)
TRADING INTRADAY:
Intraday Trading, also known as Day Trading, is the system where you take a position on
a stock and release that position before the end of that day's trading session. There by
making a profit for you in that buy-sell or sell-buy exercise. All in one day.
Active traders can take advantage of market movements by leveraging with our unique
products. In addition, we also provide intraday live market calls that help the customer
trade efficiently.
The Intraday Trading is further subdivided into two categories:
MARGIN INTRADAY SQUARE-OFF (MIS):
The Margin Intraday Square-off (MIS) facilitates you to take leverage in intraday
position in cash & futures. Unlike CNC, instead of blocking 100% as margin, it
only blocks a pre-specified percentage as margin. You can Buy and Sell stocks on
NSE and BSE during the trading hours. You need to square off all open positions
under MIS product before 3:20 p.m. on same trading day. MIS is a product that
offers approximately 5 times exposure in cash segment, 6.5 times in stock
futures and 10 times in index futures.
There are two additional features in the MIS that enhance your intraday buying
positions viz.
Plus Multiplier:
Plus Multiplier is a product that offers approximately 10 times exposure
in cash segment, 8 times in stock futures and 15 times in index futures.
Super Multiplier :
Super Multiplier is a product that offers approximately 10 times exposure
in cash segment, 10 times in stock futures and 18 times in index futures.
AFTER MARKET ORDERS (AMO):
A facility that gives you an option to place orders even after or before the trading hours,
using our online trading platforms. As a customer, you can place AMO in Equity (NSE
and BSE) and Derivatives (NSE) as per below timing:
Online: From 5:30 P.M. IST onwards up-to 9:14 A.M IST next trading day
Call & Trade: Daily from 8:30 A.M. IST onwards up to 9:14 A.M. IST
All accumulated orders will be sent to exchange on market open
Due to scheduled system maintenance process, AMO orders will not be accepted
between 12:00 AM (midnight) to 7:00 AM.
EXPOSER AGAINST STOCK:
This product provides trading opportunities to clients by accepting Demat shares as
collateral. The client can pledge these share positions as collateral to gain additional
margin.
We provide an intraday limit on defined set of stocks based on a certain haircut
percentage. This facility is activated for all Reliance Securities Limited (RSL) customers
except NRI. Delayed Payment Charges (DPC) will be levied on debits arising out of
positions taken against collateral.
COMPETITIVE TARIFFS:
At Reliance Securities we not only offer customized services but also offer various tariff
plans where you can pick one that best suits your profile. Some of them are as fallows:
RMAX
RFIXED
RFLEXI
DP CHARGES
OTHER CHARGES
R-MODEL PORTFOLIO:
R-Model Portfolio is a tool as well as a service which combines the power of Securities
Trading and Portfolio Allocation to invest in a portfolio of stocks created by the Reliance
Securities Research Team
2. DERIVATIVES:
A derivative is a financial instrument which derives its value from the value of underlying
entities such as an asset, index, or interest rate—it has no intrinsic value in
itself. Derivative transactions include a variety of financial contracts,
including structured debt obligations and deposits, swaps, futures, options, caps, floors,
collars, forwards, and various combinations of these. In practice, derivatives are
a contract between two parties that specify conditionsunder which payments are to be
made between the parties. A derivative includes future and options.
3. COMMODITY BROKING:
Reliance Securities also executes orders to buy or sell commodity contracts on behalf of
clients and charges them a commission.
4. OFFSHORE INVESTMENT:
Offshore investment is the keeping of money in a jurisdiction other than one's country of
residence. Offshore jurisdictions are a commonly accepted solution to reducing tax
burdens levied in most countries to both large and small scale investors alike. Offshore
investing includes investment strategies outside of an investor's home country.
Investment opportunities in money-market, bond and equity assets are available through
offshore companies.
5. DEMAT ACCOUNT:
A Demat account is an account in which the shares and securities are held electronically.
Reliance Securities offers demat services through Reliance Capital and are a registered
member with NSDL and CDSL.
1. MUTUAL FUNDS:
A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. 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.
Reliance Securities Online Trading account, helps to purchase and redeem mutual fund
schemes of all major fund houses online without the hassle of filing up lengthy application
forms.
2. IPO’s:
Initial Public Offerings (IPO’s) have always been the first step towards investing. IPO
investments have seen a huge rise during last decade with Retail Investment
participation increasing to Rs. 2, 00,000.
With RSL Online Trading account investing in IPO’s is just a click away without any paper
work, It also gives you the option of investing through various banks.
It gives unique single cash feature, allows to invest in IPO’s from the same ledger
account and Allotment of Share happens in the same demat account.
3. NRI OFFERINGS:
NRI clients can place orders using the new trading platform such as Insta Express. NRI’s
can execute their securities transactions under the provisions of the RBI guidelines for
NRI Portfolio Investment Scheme (PIS).
4. NON-CONVERTIBLE DEBENTURES (NCD’s)/BONDS:
Non Convertible Debentures (NCDs) or Bonds are nothing but debt instruments issued by
a corporation. Ordinarily, a company can raise money by either issuing shares or taking a
loan. They can take a loan from a bank, financial institutions, raise money abroad, or take
a loan from the public. When they take a loan from the public - the instrument used is
called a debenture or a bond. Further, there are two types of debentures - Convertible
Debentures, and Non Convertible Debentures.
5. CORPORATE FD’s:
Corporate Fixed Deposits are Fixed Deposits placed by investors with Companies for a
fixed term carrying a prescribed rate of interest. The companies in turn use these funds to
fulfil their capital requirement from time to time. Corporate FDs are attractive investment
avenue for conservative investors who do not want to take the risk of vagaries of stock
market. Corporate FDs also offer higher interest rates than normal bank FDs.
Corporate FD is being offered by the respective Company mentioned in the list of FDs.
Reliance Securities is acting only as a Distributor.
6. RMOBILE EXPRESS:
RMobile Xpress is a smart mobile trading application that allows you to be in touch with
market anytime and anywhere during market hours. Just subscribe for the plan of your
choice and enjoy trading at your finger tips.
FEATURES OF RMOBILE XPRESS:
Place Orders anytime from anywhere.
Access Streaming Market Watch.
Get Intraday Charts.
View Order Book, Trade Book, Trading Limits & Holdings, Quotes, and Market
Depth.
Check status of orders & trade reports.
View your days / net position.
FINDINGS AND INTERPRETATION
Q)Which age groupdo you belong?
Age Group No. of Persons
18-30 13
30-45 44
45-55 38
55 and Above 5
This can be shown graphically as:
18-30 30-45 45-55 55 & Above05
101520253035404550
Age Group
Age Group
From the above graph, it is clear that 13% of the respondents belong to 18-30 years
age group, 44% belong to 30-45 years age group, 38% belong to 45-55 years age
group and only 5% belong to more than 55 years age group. So we can say 26-45
year age group investors are active age group while only 5%investor belongs to
senior citizen age group.
Q) Are you an Income Tax payee?
TAX PAYEE No. of Persons
YES 86
NO 14
This can be shown graphically as:
86%
14%
Tax Payee
YESNO
From the above graph, it is clear that 86% of defense employees are tax payer while
14% of defense employees don’t pay tax as they are not eligible for it.
Q) How much is your annual income?
INCOME (in lakhs) PERCENTAGE
Below 1 13
1-3 48
3-5 21
5 and Above 18
This can be shown graphically as:
Below 1 1 to 3 3 to 5 5 and Above05
101520253035404550
Income (in lakhs)
Income
Perc
enta
ge
With the help of above graph, we can say that 13% investors have an annual
income less than 1,00,000 48% investors have an annual income between
1,00,001-3,00,000, 21% investors have an annual income between 3,00,001-
5,00,000, and 18% investors have an annual income more than 5,00,001.
So we can say majority of investors belong to middle class category and only
few percent say 21% investors belong to upper middle class,
18% investor belong to higher class category and minority of investor belong
to lower class category.
We can clearly see that highly unequal income distribution in Lucknow city.
Q) Where do you generally prefer to invest in?
INVESTMENTS PERCENTAGE
PPF 7%
Fixed Deposit 45%
Mutual Funds 18%
Real Estate 10%
Gold ETF 8%
LIC 12%
This can be shown graphically as:
PPF Fixed deposit
Mutual Funds
Reaal estate Gold ETF LIC0%5%
10%15%20%25%30%35%40%45%50%
INVESTMENTS
INVESTMENTS
From the above graph, it is clear that defense employees generally prefer to invest in
Fixed Deposits.
Q) How much percentage of your income you invest yearly?
INCOME NO. of Persons
0-20% 61
20-35% 17
35-50% 12
50% and above 10
This can be shown graphically as:
0-20 %
20-35%
35-50%
50% and Above
0 10 20 30 40 50 60 70
No. Of Persons
No. Of Persons
From the above graph, it is clear that 61 out of 100 defense employees mainly invest
0-20% of their income yearly.
Q) Which Of the following policies do you own?
POLICIES No. of Persons
Child Planning 38
Education Planning 27
Retirement Planning 19
Tax Planning 16
This can be shown graphically as:
38%
27%
19%
16%
No. Of Persons
Child PlanningEducation PlanningRetirement PlanningTax Planning
From the above graph, it is clear that 38% of defense employees prefer to invest in
child planning, 27% of them invest in education planning, 19% and 16% of them invest
in retirement and tax planning respectively.
Q) Have you taken any loan and if yes, then for what purpose?
LAON TAKEN PERCENTAGE
YES 37%
NO 63%
This can be shown graphically as:
Loan
YESNO
If yes, then for what purpose?
PURPOSE OF LOAN No. OF PERSONS
Housing Loan 18
Vehicle Loan 9
Education Loan 7
Business Loan -
Marriage Loan 3
This can be shown graphically as:
Housing loan
Vehicle Loan
Education Loan
Business loan
Marriage Loan
0
2
4
6
8
10
12
14
16
18
Purpose Loan
Purpose Loan
From the above graph, it is clearly stated that only 37% of defense employees go for
loan options. Ashousing loan is the top most priority for them. Then it is the vehicle,
education and marriage loans. The defense employees don’t like to take loan for
business purpose.
Q) For how much period you would prefer to invest?
Periods Percentage
Short Term 73%
Long Term 27%
This can be shown graphically as:
73%
27%
Percentage
Short TermLong Term
Q) What is the purpose behind investment?
Purpose Percentage
Returns 57%
Liquidity 10%
Wealth 13%
Tax savings 17%
This can be shown graphically as:
Returns
Liqudity
Waelth
Tax Savings
0% 10% 20% 30% 40% 50% 60%
57%
10%
13%
17%
Percentage
Q) Do you currently own an investment portfolio?
Currently Owned Percentage
YES 69%
NO 31%
This can be shown graphically as:
Currently Owned0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
NoYes
RESULT
It is proved that (accept) there is no significant influence of socio-economic profile on
saving, objective, return, risk, preferred investment period, internal of investment,
minimum investment level, research and type of research for investment, reinvest and
advice. According to rank wise analysis we can say that insurance is the preference for
investment.
Insurance is the present need of the investors. Second Preference of Investor is Bank
deposit and third preference is the Stock Market.As today Insurance is getting very
good response as an investment avenues, it is openingwide door for the investors as
well as for the agents and subagents who can offer variousinvestment avenues with
their concern avenues to their clients.Further, people are very much concern about
Savings, Tax saving and Liquidity. So thesefactors give them freedom of thinking
and option to invest in more than one avenue. Ithelps investor selecting
the appropriate investment avenue for asset allocation accordingto needs.
Investor can diversify its portfolio according to risk and return on investment.At last the
survey concludes with more requirement of financial advisor who
providesmore knowledge to the investors regarding various avenues.
Investment decisions are ultimately the responsibility of investors. As such, investors
need to be better supported by the enhancement of disclosure requirements,
establishment of investor’s protection measures, and investors education to strengthen
decision making skills and knowledge. For many investors, the painful experience of the
financial crisis was a wakeup call on the unparalleled importance of self-responsibility.
Responsibility credit investment requires a significant input of human resources and
physical resources, with extensive experience as a guide. The key to successful
investment lies in taking the time to nurture investment professionals with a broad
perspective and keen sensitivity to information. Investors who simply pursue large
spread will likely continue to suffer losses whenever a credit event occurs.
However, we do not intend to revert to a bygone era that tried to shield investors against
all risk in the high yield corporate bond market. After all, if risk could be avoided, there
would be no yield spread.
Conclusion and Findings
Income level of investors is an important factor, which affects portfolio of the
investors.
It is clear that 86% of defense employees are tax payer while 14% of defense
employees don’t pay tax as they are not eligible for it.
Majority of investors belong to middle class category and only few percent say
21% investors belong to upper middle class. We can also say that there is a
highly unequal income distribution in Lucknow city.
27% of investors are preferred to invest in long-term avenues where as 73% of
investors are preferred to invest in short-term avenues.
The investors decisions are driven by the economic indicators such as GDP, inflation
rate, unemployment rate, NNP, GNP, Government Policies etc. the study shows how
different factors and instruments have different risk, returns and tax considerations while
taking investment decisions and are of diverse natures. It is very difficult to come to any
definite conclusion that how a particular market instrument is doing and how they will
perform in the future, but still the study concludes to an extent that the particular
instruments or product like equity of government security has performed well in the past,
and supported with strong demands will perform well in the future.
Indian economy has grown from a position of 2 to 3% of growth rate to a position of
8.5% at present in a very less time. The economy has done immensely well and so is
the performance of the equity market, which has given a very high return to the
investors. Thus equity market is presently very booming and expected even more in the
future. The study takes a random sample of 100 prospective and existing clients that
denotes the whole population of investing community, which is limited to the extent of
accurate results. The population for the future of the investing community is that it will
give very high returns for the securities that are fundamentally strong and not by any
other means.
Thus to conclude, the study says that the Indian investment community have shown
much interest in investing different financial products available in the market due to
spiraling growth of Indian GDP, better performance by the companies, liberal rules and
regulations by the authority like SEBI to protect the investors’ interest and this process
will grow much more quicker in the future.
Scope for further research:-
The study is concluded by taking a limited number of sample sizes, which is stated
earlier. And the study reflects the perception of these investors who are residing in
Lucknow. There might be a chance that the perception of investors of different nature
are varied due to diversity in social life, living pattern, income level etc. that needs to be
studied further.
LIMITATIONS
Useful Financial insights are not easily available.
Due to time constraint sufficient research on all the investment tools is difficult.
The survey sample is not very large for analysis.
Properly convincing people to invest inproducts is challenging.
Due to recession there is liquidity crunch in the market.
There might have been tendencies among the respondents to amplify or filter their
responses under the testing conditions.
The research is confined to Lucknow and does not necessarily shows a
pattern applicable to other parts of the country.
APPENDICES
QUESTIONNAIRE
Name: ________________________________________________________________
Address:______________________________________________________________
Postal code _____________Residential Contact number: ___________________
Mobile number: ___________________________
Email id: ___________________________________________________
Annual income: _____________________________
Q1) Which age group do you belong?
a) 18 - 30 b) 30 - 45 c) 45 - 55 d) 55 & above
Q3) Are you an income tax payee?
a) Yes b) No
Q4) How much is your yearly income?
a) Below 1lakh b) 1-3lakhsc) 3-5lakh d) 5lakhs & above
Q5) Where do you generally prefer to invest in?
a) PPF b) Fixed deposit c) Mutual funds d) Real estate e) Gold ETF
f) LIC
Q6) How much % of your income you invest yearly?
a) 0-20% b) 20-35% c) 35-50% d) 50% & above
Q7) Which of the following planning policies you own?
a) Child planning b) Education planning c) Retirement planning d) Tax
planning
Q8) Have you taken any loan and if yes then for what purpose ?
a) Yes b) No
If yes then tick one or more applicable-
a) Housing loan b) Vehicle loans c) Education loan d) Business loan
e) Marriage loan
Q9) For how much period you would prefer to invest?
a) Short term (0-5yrs) b) Long term (5 & above)
Q10) What is the purpose behind investment?
a) Returns b) Liquidity c) Wealth d) Tax savings
Q11) Do you currently own an investment portfolio?
a) Yes b) no
Q12) What is the minimum investment that you have made annually
in the recent past?
a) Less than $5,000 b) $5,000 – $10,000 c) $10,000 – $15,000 d)
$15,000 – $20,000 e) $20,000 – $30,000 f) More than $30,000
Q13) Are your investments taken care of by an investment agency?
If yes then please mention the name of the agency.
Yes
No
Agency Name:_________________
Q14) Which of the following areas have you invested in so far?
Stock Market
Mutual Funds
Bonds
Real Estate
Retirement
Forex
Offshore
Gold
Options and Futures
HYIP
Thank you
( )
Date: - Signature
FINAL STATEMENT OF THE COMPANY
Profit and loss account
For the year ending March 2012 and 2013
Particulars MAR'13
(Rs. Cr.)
MAR'12
(Rs. Cr.)
Change %
Operating Income 3,838.00 3,275.00 17.19%
Net Sales 3,838.00 3,275.00 17.19%
EXPENDITURE:
Increase/Decrease in Stock 0.00 0.00 0.00%
Purchase of Shares / Units 0.00 0.00 0.00%
Employee Cost 165.00 141.00 17.02%
Operating & Establishment Expenses 73.00 58.00 25.86%
Administrations & Other Expenses 133.00 135.00 -1.48%
Provisions and Contingencies 597.00 300.00 99.00%
Expenses Capitalized 0.00 0.00 0.00%
Total Expenditure 968.00 634.00 52.68%
PBIDT (Excel OI) 2,870.00 2,641.00 8.67%
Other Income 43.00 72.00 -40.28%
Operating Profit 2,913.00 2,713.00 7.37%
Interest 2,180.00 2,066.00 5.52%
Depreciation 29.00 26.00 11.54%
Profit Before Taxation & Exceptional Items 704.00 621.00 13.37%
Exceptional Income / Expenses 0.00 0.00 0.00%
Profit Before Tax 704.00 621.00 13.37%
Provision for Tax 42.00 102.00 -58.82%
PAT 662.00 519.00 27.55%
Extraordinary Items 0.00 0.00 0.00%
Adj. to Profit After Tax 0.00 0.00 0.00%
Profit Balance B/F 1,144.00 1,972.00 -41.99%
Appropriations 1,806.00 2,491.00 -27.50%
Equity Dividend (%) 130.00 75.00 73.33%
Earnings Per Share (in Rs.) 27.02 21.18 27.55%
Book Value (in Rs.) 464.74 447.06 3.95%
Balance Sheet as on March 2012 and 2013
Particulars MAR'13
(Rs. Cr.)
MAR'12
(Rs. Cr.)
YoY
%Change
EQUITY AND LIABILITIES
Share Capital 246.00 246.00 0.00%
Share Warrants & Outstanding’s
Total Reserves 11,266.00 10,798.00 4.33%
Shareholder's Funds 11,512.00 11,044.00 4.24%
Long-Term Borrowings 0.00 0.00 0.00%
Secured Loans 10,844.00 9,560.00 13.43%
Unsecured Loans 1,558.00 1,305.00 19.39%
Deferred Tax Assets / Liabilities 6.00 -3.00 -300.00%
Other Long Term Liabilities 14.00 0.00 100.00%
Long Term Trade Payables 0.00 0.00 0.00%
Long Term Provisions 205.00 167.00 22.75%
Total Non-Current Liabilities 12,627.00 11,029.00 14.49%
Current Liabilities
Trade Payables 1.00 7.00 -85.71%
Other Current Liabilities 5,171.00 4,583.00 12.83%
Short Term Borrowings 4,190.00 3,453.00 21.34%
Short Term Provisions 231.00 206.00 12.14%
Total Current Liabilities 9,593.00 8,249.00 16.29%
Total Liabilities 33,732.00 30,322.00 11.25%
ASSETS
Non-Current Assets 0.00 0.00 0.00%
LOANS 238.00 199.00 19.60%
Gross Block 274.00 265.00 3.40%
Less: Accumulated Depreciation 123.00 102.00 20.59%
Less: Impairment of Assets 0.00 0.00 0.00%
Net Block 151.00 163.00 -7.36%
Lease Adjustment A/c 0.00 0.00 0.00%
Capital Work in Progress 0.00 0.00 0.00%
Intangible assets under development 3.00 0.00 100.00%
Pre-operative Expenses pending 0.00 0.00 0.00%
Assets in transit 0.00 0.00 0.00%
Non-Current Investments 13,309.00 13,225.00 0.64%
Long Term Loans & Advances 10,107.00 8,622.00 17.22%
Other Non-Current Assets 1,248.00 925.00 34.92%
Total Non-Current Assets 25,056.00 23,134.00 8.31%
Current Assets Loans & Advances
Currents Investments 366.00 600.00 -39.00%
Inventories 0.00 0.00 0.00%
Sundry Debtors 0.00 193.00 -100.00%
Cash and Bank 745.00 436.00 70.87%
Other Current Assets 431.00 475.00 -9.26%
Short Term Loans and Advances 7,009.00 5,394.00 29.94%
Total Current Assets 8,551.00 7,098.00 20.47%
Net Current Assets (Including Current
Investments)
-1,042.00 -1,151.00 -9.47%
Total Current Assets Excluding Current
Investments
8,185.00 6,498.00 25.96%
Miscellaneous Expenses not written off 125.00 90.00 38.89%
Total Assets 33,732.00 30,322.00 11.25%
Contingent Liabilities 1,301.00 1,005.00 29.45%
Total Debt 20,833.00 18,260.00 14.09%
Book Value (in Rs.) 464.73 447.06 3.95%
Adjusted Book Value (in Rs.) 464.73 447.06 3.95%
BIBLIOGAPHY
Websites
1. www.nseindia.com
2. www.bseindia.com
3. www.sebi.com
4. www.investmetnz.com
5. www.google.com