Ali Project Report

8/14/2019 Ali Project Report

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PROJECT REPORT

AT

(HSBC GROUP)

A Project Report submitted in partial fulfillment of the requirements

for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

(Industry Integrated)

TO

MADURAI KAMARAJ UNIVERSITY, MADURAI

BY

ALI AYAN

Reg No.A7752101

Under the guidance of

Mr. VARUN SRIVASTAVA

Area Sales ManagerIL&FS INVESTSMART SECURITIES LTD

HARIKISHAN INSTITUTE OF MANAGEMENT STUDIES, NEW DELHI

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JUNE 2009

Certificate

This is to certify that the Project Report at

II&FS INVESTSMART SECURITIES LTD , NEW DELHI

Submitted in partial fulfillment of the requirements for the award ofthe degree of



TO

MADURAI KAMARAJ UNIVERSITY, MADURAI

Is a record of bonafide Training carried out by

KUNAL KUMAR SINGH

Under my supervision and guidance and that no part of this report has

been submitted for the award of any other degree / diploma /

fellowship or similar titles or prizes.

FACULTY GUIDESignature:

Name:

Qualifications: MBA, M. Phil, PhD Signature & seal of the Learning Center

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STUDENTS DECLARATION

I hereby declare that the Project Report conducted at

IL&FS INVESTSMART SECURITIES LTD , NEW DELHI

Under the guidance of

Mr. VARUN SRIVASTAVA

Submitted in Partial fulfillment of the requirements for the

Degree of



TO

MADURAI KAMRAJ UNIVERSITY, MADURAI

Is my original work and the same has not been submitted for the

award of any other Degree/diploma /fellowship or other similar titlesor prizes.

Place: ---------------------

Date: Reg.No

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ACKNOWLEDGEMENT

An endeavor over a period can be successful only with the advice and support of

well-wishers. I take this opportunity to express my gratitude and appreciation to all

those who encouraged me to complete this project.

I am deeply indepted to prof: . Dean Harikishan Institute of

Management Studies, New Delhi for my successful completion of the project.

I express my profound and sincere thanks to .. Dean who acted as a

mariners compass and steered me through out my project voyage through his

exellent guidance and constant inspiration.

I shall be failing in my duty if I dont acknowledge my debt to Mr VARUN

SRIVASTAVA Area Sales Manager IL&FS INVESTSMART,NEW DELHI for his

valuable guidance and support,which helped me in giving a shape to my study.

I extend my hearty thanks to Mr. Sandeep Sahgal Manager of IL&FS

INVESTSMART,NEW DELHI for giving me an opportunity to take up the project

work and providing all the facilities for the same.

I also extend thanks to all other faculty members of Hrikishan Institute Of

Management Studies ,New Delhi for their external support and guidance.

I acknowledge with profound gratitude and reverence the help and guidance of one

and all in my endeavor for gainful project work I undertook at IL&FS

INVESTSMART,New Delhi.

PLAC: New Delhi ALI AYAN

MOB-09716636943

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CONTENTS

CHAPTER 1 INTRODUCTION

1.1 General Introduction1.2 Objectives of the study

1.3 Industry Profile.

CHAPTER 2 PROFILE OF THE ORGANIZATION

2.1 Origin of the Organization.

2.2 Growth and development of the Organization.2.3 Present status of the Organization.

2.4 Future plans of the Organization.

2.5 Functional Departments of the Organization.2.6 Organization structure and Organization chart.

2.7 Product and Service profile of the Organization.

2.8 Market profile of the Organization.

CHAPTER 3 DISCUSSIONS ON TRAINING.

3.1 Students work profile (Role and responsibilities).3.2 Description of live experience.

3.3 Students contribution to Organization.

CHAPTER 4 STUDY OF SELECTED RESEARCH PROBLEM

4.1 Statement of research problem.4.2 Statement of research objectives.

4.3 Research design and methodology.

4.4 Analysis of data.4.5 Summary of Findings.

CHAPTER 5 SUMMARY AND CONCLUSIONS5.1 Summary of Learning Experience.

5.2 Conclusions and Recommendations.

APPENDIX

Annexure like copy of questionnaires, interview schedule, leaflets, brochures,

Photographs to be enclosed.

Bibliography.

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CHAPTER 1 INTRODUCTION

1.1 General Introduction about the sector

Financial sector

The financial sector is in a process of rapid transformation. Reforms are

continuing as part of the overall structural reforms aimed at improving the

productivity and efficiency of the economy. The role of an integrated financial

infrastructure is to stimulate and sustain economic growth.

The US$ 28 billion Indian financial sector has grown at around 15 per cent

and has displayed stability for the last several years, even when other

markets in the Asian region were facing a crisis. This stability was ensured

through the resilience that has been built into the system over time. The

financial sector has kept pace with the growing needs of corporate and other

borrowers. Banks, capital market participants and insurers have developed a

wide range of products and services to suit varied customer requirements.

The Reserve Bank of India (RBI) has successfully introduced a regime where

interest rates are more in line with market forces.

Financial institutions have combated the reduction in interest rates and

pressure on their margins by constantly innovating and targeting attractive

consumer segments. Banks and trade financiers have also played an

important role in promoting foreign trade of the country.

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Banks

The Indian banking system has a large geographic and functional coverage.

Presently the total asset size of the Indian banking sector is US$ 270 billion

while the total deposits amount to US$ 220 billion with a branch network

exceeding 66,000 branches across the country. Revenues of the banking

sector have grown at 6 per cent CAGR over the past few years to reach a

size of US$ 15 billion. While commercial banks cater to short and medium

term financing requirements, national level and state level financial

institutions meet longer-term requirements. This distinction is getting

blurred with commercial banks extending project finance. The total

disbursements of the financial institutions in 2001 were US$ 14 billion.

Banking today has transformed into a technology intensive and customer

friendly model with a focus on convenience. The sector is set to witness the

emergence of financial supermarkets in the form of universal banks

providing a suite of services from retail to corporate banking and industrial

lending to investment banking. While corporate banking is clearly the largest

segment, personal financial services is the highest growth segment.

The recent favourable government policies for enhancing limits of foreign investments to 49 per

cent among other key initiatives have encouraged such activity. Larger banks will be able to

mobilise sufficient capital to finance asset expansion and fund investments in technology.

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Capital Market

The Indian capital markets have witnessed a transformation over the last

decade. India is now placed among the mature markets of the world. Key

progressive initiatives in recent years include:

The depository and share dematerialisation systems that have enhanced

the efficiency of the transaction cycle

Replacing the flexible, but often exploited, forward trading mechanism with

rolling settlement, to bring about transparency

The infotech-driven National Stock Exchange (NSE) with a national

presence (for the benefit of investors across locations) and other initiatives

to enhance the quality of financial disclosures.

Corporatisation of stock exchanges.

The Securities and Exchange Board of India (SEBI) has effectively been

functioning as an independent regulator with statutory powers.

Indian capital markets have rewarded Foreign Institutional Investors (FIIs)

with attractive valuations and increasing returns.

The Mumbai Stock Exchange continues to be the premier exchange in the

country with an increase in market capitalisation from US$ 40 billion in

1990-1991 to US$ 203 billion in 1999-2000. The stock exchange has about

6,000 listed companies and an average daily volume of about a billion dollars

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Many new instruments have been introduced in the markets, including

index futures, index options, derivatives and options and futures in select

stocks.

Insurance

With the opening of the market, foreign and private Indian players are keen

to convert untapped market potential into opportunities by providing tailor-

made products:

The presence of a host of new players in the sector has resulted in a shift

in approach and the launch of innovative products, services and value-added

benefits. Foreign majors have entered the country and announced joint

ventures in both life and non-life areas. Major foreign players include New

York Life, Aviva, Tokio Marine, Allianz, Standard Life, Lombard General, AIG,

AMP and Sun Life among others.

With competition, the erstwhile state sector companies have become

aggressive in terms of product offerings, marketing and distribution.

The Insurance Regulatory and Development Authority (IRDA) has played a

proactive role as a regulator and a facilitator in the sectors development.

The size of the market presents immense opportunities to new players with

only 20 per cent of the countrys insurable population currently insured.

The state sector Life Insurance Corporation (LIC), the largest life insurer in

2000, sold close to 20 million new policies with a turnover of US$ 5 billion.

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The gross premia for the insurance sector was US$ 13 billion for 2001-02.

There are four public sector and nine private sector insurance companies

operating in general/non-life insurance business with a premium income of

over US$ 2.58 billion.

The markets potential has been estimated to have a premium income of

US$ 80 billion with a potential size of over 300 million people. The General

Insurance Corporation (GIC) (which covers the non-life sector) had a total

premium income of US$ 2 billion in 2001-02. This has the potential to reach

US$ 9 billion in the next five years.

Venture Capital

Technology and knowledge have been and continue to drive the global

economy. Given the inherent strength by way of its human capital, technical

skills, cost competitive workforce, research and entrepreneurship, India is

positioned for rapid economic growth in a sustainable manner. To realise the

potential, there is a need for risk finance and venture capital (VC) funding to

leverage innovation, promote technology and harness knowledge based

ideas.

The Indian venture capital sector has been active despite facing a

challenging external environment in 2001 and a competitive market

scenario.

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There were 34 VCFs and 2 Foreign VCFs registered with SEBI in March

2002.

According to a survey conducted by Thomson Financial and Prime

Database, India ranked as the third most active venture capital market in

Asia Pacific (excluding Japan). It recorded 115 deals in 2001 with average

investment per deal amounting to US$ 7.9 million. 57 VCFs invested US$

908 million in 101 Indian companies during 2001.

Disbursements for 2002 are expected to be US$ 2 billion and are estimated

to reach US$ 10 billion by 2007.

There is an increased interest in India: 70 VC funds operate in India with

the total assets under management worth about US$ 6 billion.

The amount has grown nearly twenty fold in the past five years. Most VCs

believe that 2002-03 will be driven by a relatively stable economy and new

initiatives that will boost the e-commerce sector, particularly on-line trading

and e-banking sectors.

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gaining many awards such as Best IT Usage Award by Computer Society in

India (in 1996 and 1997) and CHIP Web Award by CHIP magazine (1999).

The National Stock Exchange of India was promoted by leading Financial

institutions at the behest of the Government of India, and was incorporated

in November 1992 as a tax-paying company. In April 1993, it was recognized

as a stock exchange under the Securities Contracts (Regulation) Act, 1956.

NSE commenced operations in the Wholesale Debt Market (WDM) segment

in June 1994. The Capital Market (Equities) segment of the NSE commenced

operations in November 1994, while operations in the Derivatives segment

commenced in June 2000.

Since the early 1950s till the early 1990s, Indian policy makers had been

nourishing the goal of Socialist pattern of society. They had been following

the development planning strategy of the former Soviet Russia in a mixed

economic framework. From July 1991, in the face of an unprecedented

foreign exchange crisis, Indian economy started experiencing an IMF-World

Bank dictated regime of liberalisation.

One aspect of this is financial liberalisation. There is a move towards

privatisation of nationalised banks these banks are selling their shares in

the stock market. Transnational banks are encouraged to operate in the

Indian banking sector. Attempts are made to attract foreign direct

investment in different sectors. There is an increasing entry of foreign

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portfolio capital due to stock market liberalisation. People are encouraged to

invest in stocks through income tax benefits and abolition of capital gains

tax. There is a move to develop a national pension fund which will be

invested in different stocks to get returns out of which pension will be

provided to retired people. It is expected that boosting up of stock market

will accelerate the process of capital accumulation and growth.

Stock market development has been an important part of financial

liberalisation in the less developed countries (LDCs). In the pro-liberalisation

circle, stock market is assigned to play an important role in the capitalist

development of LDCs.

There are many studies supporting the positive link between stock market

development and growth. Let us mention some of the recent studies. One

important study was undertaken by Levine and Zervos (1998). Their cross-

country study found that the Development of banks and stock markets has a

positive effect on growth. In another study Levine (2003) argued that

although theory provides ambiguous relationship between stock market

liquidity and economic growth, the cross-country data for 49 countries over

the period 1976-93 suggest a strong and positive relationship (see also

Levine, 2001). Henry (2000) studied a sample of 11 LDCs and observed that

stock market liberalisations lead to private investment boom. Recently,

Bekaert et al (2005) analysed data of a large number of countries and

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observed that the stock market liberalisation leads to an approximate 1 %

increase in annual real per capita GDP growth.

There are some economists who are sceptical. Long time back Keynes

(1936) compared the stock market with casino and commented: when the

capital development of a country becomes the by-product of the activities of

a casino, the job is likely to be ill-done.

Referring to the study of World Bank (1993) Singh (1997) pointed out that

stock markets have played little role in the post-war industrialisation of

Japan, Korea and Taiwan. He argued that the recent move towards stock

market liberalisation is unlikely to help in achieving quicker industrialisation

and faster long-term economic growth in most of the LDCs.

In this perspective this study examines the nature of relationship between

stock market and growth through capital accumulation in India.

Figure 1: Indias Real Share Prices (log-values), 1950-2004

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Figure 2: Indias Annual Growth Rate of Real Industrial Output, 1961-2003

Figure3 : Indias Annual Growth Rate of Real GDP, 1951-2003

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B. Growth and present status of the industry

The ever-growing and fast-maturing 'India Market' is a lucrative business

destination for developed countries. With 7-8% of GDP growth, huge

analytical, young and English speaking work force the 'pull' for opportunities

are luring. The bandwidth of 'India Market' is enviably wide and very deep.

'Markets in India' are well protected by legal guidelines and efficient

administrators. With a liberal and proactive government at the center the

road ahead for 'Markets of India' is very rosy. 'Market India' has witnessed

exponential growth over past one and half decade. Liberal and transparent

financial policies has effected free-in-flow of FII and as a result of which

'India Market' has grown to a colossal monster in the international market.

Foreseeing sure and substantial returns on investments (ROI) companies are

pro- actively listing on the stock market indexes. Government agencies once

much hated for red tape and bribes has shed its image. Professionalism is

their new mantra. Public Enterprises like IOC, ONGC, BHEL, NTPC, SAIL,

MTNL, BPCL, HPCL and GAIL, SBI, LIC, Hindustan Antibiotics Limited, Air

India etc. to name a few, are giving Private Indian companies a good run for

their money. Private giants like Reliance Industries Limited, Infosys, Tata,

Birla Corporation, Jet Airways, Ranbaxy, Biocon, Bajaj Auto, ICICI are

breaking their own records every financial years.

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Board of India which supervises the functioning of the stock markets in

India.

Thus, the growing financial capital markets of India being encouraged by

domestic and foreign investments is becoming a profitable business more

with each day. If all the economic parameters are unchanged Indian Equity

Market will be conducive for the growth of private equities and this will lead

to an overall improvement in the Indian economy.

Indian Stock Market including both NSE-National Stock Exchange and the

BSE-Bombay Stock Exchange have certainly taken a tremendous beating in

the past few weeks. We are sure most of us here knew that the correction in

the trading curve was round the corner which would be healthy, and the

markets would bounce back from 18k levels with the help of mutual fund

investments & buying of Indian stocks again. However the anticipation went

wrong, and the US recession story along with global and Indian commodity

prices have added fuel to the global equity market turmoil on a whole.

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C. Future of the industry

The stock market is booming in spite of the low agriculture output. The

monsoon is good in an overall sense but still the question remains who takes

the credit? The answer is the karma of the people. I appreciate the Indian

politicians and the industrialists who being pawns of destiny are doing things

positive and productive. India, as a country is running a very good period

and the position of planets in the transit are giving wonderful results.

Less than one percent of population own stocks and less than 1000

individuals control the market, the majority being the FIIS, the promoters of

the company. The credit should go to media for making stock market

headlines.

The question many people in the market ask:

Will the bull run continue? What heights we can reach?

First of all, mark my words Indian bourses in the future will be one of the

best investments in the world. There will be a time when it can even reach

3000 points in the nifty. India will begin one of the best dasas of the Sun,

which will work in its favour. So before 2009 Indian bourses should see an all

time high.

Now this bull run will continue.

There can be some correction in the BSE sensex in the 7500 points

level.

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The market will hover between the 6000- 7000 till mid august.

There will be huge fluctuations.

Investors and new entrants to the market to cool down a bit and come well

below 7000.

In any case if you are long terms players then step-in and buy now and

forget for another 10 years. You will make a killing in the Indian markets.

Most of the tech companies and the main index will do well but slightly in the

lower side of expectations.

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CHAPTER 2 PROFILE OF THE ORGANISATION

2.1 ORIGIN OF THE ORGANISATION

IL&FS Investsmart Ltd is one of the leading financial services organizations

in India. The company is providing customized financial management

solutions to individuals and corporate. Their principal activities are to provide

brokerage related, investing and financial services. They also provide loan

and credit activities, insurance products and security dealing services. IL&FS

Investsmart Ltd was incorporated as Investsmart India Ltd on September 1,

1997, as a wholly owned subsidiary of Infrastructure Leasing & Financial

Services Ltd. The company commenced equity broking on NSE and BSE in

February 1998 and August 1999 respectively. In June 2000, the company

commenced derivative broking on NSE and in January 2001, they launched

investment advisory products. In January 2002, with the view of consolidate

the IL&FS's interests in the capital markets, IL&FS Merchant Banking

Services Ltd and DebtonNet India Ltd were merged with the company. The

company also forayed into insurance distribution by setting up wholly owned

subsidiaries namely Investsmart Insurance Agency Pvt Ltd and Investsmart

Insurance Distribution Pvt Ltd. In March 2003, the name of the company was

changed from Investsmart India Ltd to IL&FS Investsmart Ltd. During the

year 2003-04, the company acquired 4 branches of Tata TD Waterhouse

Securities Pvt Ltd. They incorporated a wholly owned subsidiary, IL&FS

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Investsmart Commodity Brokers Ltd and also acquired IL&FS Academy for

Insurance and Finance Ltd during the year. During the year 2004-05, the

company has Inducted two strategic partners namely, Softbank Asia

Infrastructure Fund L P (SBAIF) and E*Trade Financial Corporation. SBAIF is

a large private equity fund with funds under management exceeding USD 6

billion and E*Trade is one of the largest retail broking and banking equity

based in US with the presence in all major world markets. During the year,

the company commenced derivative broking on BSE and also commenced

commodity broking business through their wholly owned subsidiary, IL&FS

Investsmart Commodity Brokers Ltd. During the year 2005-06, the company

incorporated a wholly owned subsidiary namely IL & FS Investsmart Asia

Pacific Pvt Ltd in Singapore to undertake securities services related business.

During the year 2009-07, the company incorporated IL&FS Investsmart

Securities Ltd as a wholly owned subsidiary and transferred their Portfolio

Management Services to the subsidiary company. Also, they acquired 100%

stake in Tajir Investment & Properties Ltd, a Non-Banking Finance Company

on a going concern basis. During the year 2007-08, the company transferred

Merchant Banking and Underwriting Business to IL&FS Investsmart

Securities Ltd. The company received the 'Best Performing National Financial

Advisor Award' from CNBC for the two years.

The Company was set up as Investsmart India Limited, a wholly owned

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subsidiary of Infrastructure Leasing & Financial Services Limited for carrying

on capital market activities such as share and stock broking,underwriting,

placement of securities etc. The Company was incorporated on September

01, 1997 and received the Certificate of Commencement of Business on

October 07, 1997.

Change In the Registered office of the Company

IL&FS has set up a financial centre in Bandra Kurla Complex in Mumbai with

a view to house all its subsidiaries, ventures etc. at the sameplace for

administrative convenience and to pursue group synergy. Pursuant to this,

on June 14, 2000 the registered office of the Company was changed from

Mahindra Towers, 4th Floor, 'B1 Wing, Dr. G. M. Bhosale Marg, Worli, Mumbai

400 018 to The IL&FS Financial Centre, Plot C-22, G Block, Bandra-Kurla

Complex, Bandra (E), Mumbai 400 051. Subscription by ORIX Corporation,

Japan in 2000 ORIX subscribed to 80,00,000 equity shares in March 2000

representing 27.59% of the paid up capital at that point of time. ORIX is an

integrated financial services group based in Tokyo, Japan, providing

innovative value-added products and services to both corporate and retail

customers. With operations in 24 countries worldwide, ORIX's activities

include leasing, corporate finance, real estate-related finance and

development, life insurance, and investment and retail banking. ORIX is

made up of 202 consolidated subsidiaries and 74 affiliates. ORIX has 974

offices in Japan, with 234 locations throughout the United States, Asia,

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Oceania, Europe, the Middle East and Northern Africa .Amalgamation of

IL&FS Merchant Banking Services Limited (IMBSL) and.DebtonNet India

Limited (OIL) with IL&FS In vests mart Ltd (erstwhile In vests mart India

Limited) IL&FS, in addition to its core activity of infrastructure financing, was

also registered with SEBI as a Category merchant banker since the inception

of the SEBI (Merchant Banking Regulations) 1992. Consequent to changes in

SEBI regulations on segregating merchant banking from fund based

activities, IL&FS set up IL&FS Merchant Banking Services Limited (IMBSL) as

a wholly owned subsidiary. IMBSL was set-up to provide full-fledged

merchant banking services and was registered as a Category I merchant

banker with SEBI.

IL&FS also had a 50% stake in another company called DebtonNet India

Limited (OIL), which was set up along with. National Stock Exchange Of

India Limited. DIL was set up to provide an automated and transparent

platform, using the Internet, for book built debt issuances. Over a period of

time DIL had enhanced the scope of the platform to provide a wide range of

information, news and analytics relevant to the debt market. With a view to

consolidate IL&FS's interests in the capital markets IMBSL and DIL were

merged into the Investsmart India Limited. Prior to this, IL&FS had taken

over the 50% stake of National Stock Exchange of India Limited in DIL. The

scheme of amalgamation was approved by the High Court on August 01,

2002 and was effective from January 01,2002.

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2.2 Growth and Development of the Organization

UK banking giant HSBC will acquire 73.21% of IL&FS Investsmart for Rs

1002.55 crore (around $241.6 million), paving its entry into the retail

brokerage arena. This would also give the group an entry into the non-

banking finance market, which it has been looking at entering for the past

couple of years. It is also keeping the options of delisting the broking

company open.

Under the terms of the agreements, HSBC proposes to acquire a 43.85%

stake from E*TRADE Mauritius and an additional 29.36% from IL&FS for

Rs 200 per share. HSBC will also pay IL&FS Rs 82 crore as part of a

three-year non-compete agreement. It will also make an open offer to

acquire up to another 20% of Investsmart. The open offer will be

announced on May 20.HSBC tookeover IL&FS Investsmart. E*TRADE and

Softbank Asia Infrastructure Fund L P had in 2004 collectively acquired

34% equity in IL&FS Investsmart at Rs 54 per share. In late 2006,

E*Trade had made an open offer for Rs 210 per share. On Friday, the

scrip closed on BSE at Rs 198.80. HSBC Securities and Capital Markets

(India) Private Ltd, the Group's securities arm in India, will pick up IL&FS

stake while HSBC Mauritius will pick up the stake of E*TRADE Mauritius.

Investsmart provides equity and commodity broking, investment banking,

insurance broking and distribution, mutual funds distribution and related

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financing services. It has 88 branches and 190 franchisee outlets.

However, the RBI is not in favour of allowing foreign entities to get into

the commodity broking space. HSBC may have to offload the commodity

broking piece."We have not taken a decision on the commodity broking,"

says Ms Kidwai. HSBC will also use the investment banking capabilities of

Investsmart for its maid-market clients. According to Tarun Kataria, MD

and head of corporate, investment banking and markets, HSBC India,

Investmart has a strong management team and they are very much part

of our future growth plans. This acquisition will allow us to scale our

institutional brokerage business. Investmart also allows us a platform to

do mid cap research and mid size ECM transactions. The group could look

at delisting the company depending on the response to the open offer.

2.3 Present Status of the Organisation

IL&FS INVESTSMART LIMITED, a financial services company, provides

customized financial management solutions for retail customers,

institutional investors, and corporate clients in India. Its retail offerings

include mutual fund advisory, portfolio management, IPO advisory and

distribution, and insurance advisory services, as well as equities and

derivatives, and commodity trading services. The companys institutional

offerings comprise financial advisory and capital-raising services, as well

as investing and trading strategies. In addition, it also provides online

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trading services. HSBC Holdings has offered to delist IL&FS Investmart

from the BSE and NSE. IL&FS Investmart was started in 1999 as a

broking arm of IL&FS. The company had issued a GDR and E*Trade and

SAIF Partners subscribed to the issue triggering an open offer. HSBC

holding bought about 73% from E*Trade, SAIF Partners, and IL&FS for Rs

1,311 crore. It later acquired another 20% stake, increasing its stake to

93.8%. However, HSBC has now offered to delist the company from the

BSE as well as the NSE. HSBC currently holds 93.8% stake in IL&FS

Investmart. As far as HSBC stake goes, in 2008 they bought 73.2% stake

from E*trade, SAIF Partners and IL&FS and then made an open offer for

20%. The open offer was for Rs 200 per share and currently its sitting on

Rs 144-145.

In last evenings announcement to the exchanges, the HSBC board took a

final approval and they are looking at delisting by offering to buyback the

remaining 6.2% shares and delist the company from the Indian stock

exchanges.

Valuation of IL&FS Investsmart

Valuation wise this is will not be as far as what Motilal or Edelweiss is

because the market share in the Indian retail market is just constituted

by several large players which constitute 60% of the market share and

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the rest of the market share is split across the board, across small

brokerages and regional players.

IL&FS doesnt have a market share of more than 1% but what is

interesting is that it has a good branch network and this is what HSBC

wanted. Even when they bought that 70% stake, the whole idea was to

get into the branch network.

SERVICES PROVIDING BY THE IL&FS INVESTSMART LTD

Retail offering

Institutional Offering

Advisory report

Online Trading

Advisory Services

2.4 Functional Department of the Organisation

EQUITY

DERIVATIVES

IPO

PMS

ONLINE TRADING

COMMODITIES

INSURANCE

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2.5 ORGANISATION STRUCTURE AND ORGANISATION

CHART

HOME

RETAIL OFFERING

INSTITUTIONAL OFFERING

MARKETS

ADVISORY REPORT

ONLINE REPORT

ADVISORY SERVICE

2.6 Product and Services of the organization

competitors

A. Online product offering

1. SMARTSTART

features

Trade on NSE & BSE

Simple order entry for Equity & Derivatives

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Fully Customizable display

User friendly Get Quote screen

Integrated Accounts (Bank. Demat & Trading)

Live order status

Track your orders real-time

Dynamic buying power

Works behind a Proxy

Back office access

2. SMARTINVEST

Features

Instant Loading

Works behind a Proxy

Live Streaming quotes

Multiple Watch lists

NSE& BSE Access

Single order form for Cash and FnO

Point and Click order entry

Hot Key Functions

Market Depth Window

Back Office access

3. SmartTRADE

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Features

Fully Customizable display

Dynamic Charts with Indicators

EOD Charts

Real-Time market data

Advanced Alert capabilities

Live order status

Track your orders real time

Real time position updates

Dynamic buying power

Derivative chain

Lock terminal option

Message window docking

ADVISORY SERVICES

1.Why invest?

Saving v/s Investing is not a new debate. While savings pertains to money

put away for short time periods, Investing on the other hand is a decision

catering to a longer time duration.

Saving V/s investing

Savings is normally the money that is put away for short term periods

and is associated with low risk and low return.

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The after tax returns generated from savings rarely outpace inflation.

Investing on the other hand is a conscious decision.

Monies are invested for a longer duration of time, over 3-5 years.

The returns generated are generally higher when compared to the

returns from savings.

2.7 MARKET PROFILE OF THE ORGANISTION

IL & FS Investsmart Limited (Bombay Stock Exchange)

Sector: Financials industry: Investment Services

As of 26 Jun 2009

198.75INR

Price Change

+9.45

Percent Change

+4.99%

Analyst Recommendations

OVERVIEW

IL & F S Investsmart Limited provides financial management solutions. The

Companys business comprises of loan financing and credit facilities. It

provides individuals and corporates with customised financial management

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solutions. It provides personalised investment management services

including planning, advisory, execution and monitoring of the of investment

services. The Company offers financial advisory and capital-raising services

to corporates. As of March 31, 2008, the Company had 143 institutional

clients.

QUICK FINANCIAL SYNOPSIS

BRIEF: For the fiscal year ended 31 March 2009, IL & FS Investmart Ltd.'s

revenues decreased 44% to RS2.19B. Net loss totaled RS1.09B, vs. a profit

of Rs549.6M. Revenue reflects a decrease income from operations and lower

other operating income. Net loss reflects an increase in rent, higher

depreciation, the presence of provision for contingencies, an increase in

other expenditure and the presence of exceptional items.

COMPANY ADDRESS

IL & FS Invest smart Limited

The IL&FS Financial

Centre, Plot C - 22, G-Block

Bandra-Kurla Cmplex, Bandra(E)

Mumbai 400 051

P: +9122.26533333

F: +9122.26533075

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TOTAL EMPLOYEES

1997

COMPANY WEB LINKS

- Home Page

- News Releases

- Investor Relations

- Corporate History/Profile

- Executives

- Products/Services

- Employment Opportunities

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CHAPTER 3 DISCUSSION ON TRAINING

3.1 Students work profile(role and responsibilities)

I worked there with IL&FS INVESTSMART with a profile of sales trainee. This

profile offers me to understand the need of customer and provide them the

best deal possible with maximization of the profit, both for the company as

well as for the customer.

The most important aspect for the role of trainee is trust. So far

fulfillment of the targets one needs to:

Capitalize on the old and loyal clientage which can be building slowly

by advising people in the best possible way.

Generating new leads through various activities.

Generation of leads

Since I was new in the field so I had to start from scratch and

generate new leads to sustain in the market.

Cold calling is one of the trusted ways of getting to the customers without

meeting them. Although the rate of conversion remained very less.for cold

calling the quality and accent remains a very important criterion . this

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activity give me mixed result. I often got success and generated many leads

through it but it also landed me in awkward position where the customer

were in different mood and made us hear words for which a marketer

should be always prepared to hear.corporate calls always remained more

difficult to crack with respect to retail sector.

The corporate were the most difficult and most temping to get the

business from. It took me one one day to crack Hi-tech Gears.

At IL&FS INVESTSMART after getting the product knowledge in the first week

at the branch I was also allotted distributor to work with. In the initial phase

I was accompanied by more experienced staff. After I became known to the

market and procedure I started attending calls alone only.

After the third week my performance also improved and I was able to get

close to the targets, though it looked difficult to achieve in the beginning. To

get awareness of the every product I attended diversified calls. This helped

me to implement cross selling to get better results.

LIMITATIONS:

1. Cold Calling

Voice and accent plays a major role.

The right time to call a customer cannot be decided, as the customer

may in a different mood at the time of calling.

Time consuming

Less success rate

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2. Corporate

Time consuming

Contacts with higher authorities play a major role

3.1 Description of live experience

I was supposed to use the database provided by the company to make cold

calls or by directly meeting people to get new leads.

While making cold calls, we need to have:

Good Communication Skills (Voice quality is clear and articulate)

Persistent and able to bounce back from rejection

Good organizational skills.

Ability to project a telephone personality (Enthusiasm, friendliness)

Flexibility: can adapt to different types of clients and new situations.

Using a good database is very essential.

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Eighty percent of our business comes from 20 percent of our customers" is

a frequent statement at any sales convention. There's hardly a sales

executive who is not aware of the 80/20 rule.

While talking to customers, I analyze their needs. Whether they want to go

for investment purpose or insurance or both. Suggest them the plan that

best suits them. If they agree to it then either we send across the agents to

close the deal or close it themselves.

Problems faced while selling products:

Customer dissatisfied with the services.

People fear that Reliance Money Being a Private company and a new

entrant may be able to sustain or not.

Insurance means LIC for people.

Past experience, word of mouth.

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Misguidance by agents.

People do not want insurance products.

Lack of knowledge and awareness about general and life insurance.

People risk appetite is very low, so they are afraid of mutual fund as

well.

People relate the problems of mobile phones of Reliance

Communication with IL&FS INVESTSMART.

SWOT ANALYSIS

Weakness Inexperienced Staff

Low awareness due to

lack of advertisement.

Lack of loyal clientage

Developing product.

Strength Co-operative and

Experienced Branch

Managers

Good Database

Reliance Brand

Low pricing

Opportunity Untapped Market

Increased spending power

Changing Mindset of

Customers

Unpredictable Sensex

Threat Reach

Stiff competition from

existing players in the

market

Better products

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CHAPTER 4 STUDY OF SELECTED RESEARCH

PROBLEM

4.2 Statement of Research objectives

To f ind the market potential and market penetrat ion ofIL&FS Investsmart product offerings in New delhi.

To collect the real time information about preference level

of customers using Demat account and their incl inat ion

towards var ious other brokerage f irms e.g. Indiabulls,

Sharekhan, Indiainfoline, Religare, Alankit , Unicon.

To expand the market penetration of IL&FS Investsmart.

To provide pricing strategy of competi tors to f ight cut

throat competition.To increase the product awareness of

IL&FS Investsmart as single window shop for investment

solutions

4.3 Research design and methodology

It was important to collect detailed information on various aspects for

effective analysis. As Marketing today is becoming more of a battle based

on information based society companies with superior information enjoys a

competitive advantage.

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Methodology Adopted

The information was collected through person interview and

interview was conducted through the mode of questionnaire.

4.4 Analysis of Data

Data collection

The data collection was collected through primary as well as secondary

source.

PRIMARY DATA :

Primary data was collected from 155 respondents using a schedule of

question and a survey was conducted. The tabular and graphical data

was Microsoft exel.

SECONDARY DATA :

Secondary data was collected mainly from internet ,printed journals on

the capital markets of India ,newspaper articles and books written on

the Indian stock markets.

SAMPLING:

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Judgment, non-random sampling was used. Respondents were request

to help with the schedule at their offices , homes or at the IL&FS

office.

4.5 SUMMARY OF FINDING

1. Preference of Investment

Fig4.5.1 Result of Preference of Investment

Interpretation: This shows that although the mutual funds market is on the

rise yet, the most favored investment continues to be in the Share Market.

So, with a more transparent system, investment in the Stock Market can

definitely be increased.

2. Awareness on Online Share Trading

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Fig4.5.2 Result of Awareness of Online Share Trading

Interpretation: With the increase in cyber education, the awareness

towards online share trading has increased by leaps and bounds. This

awareness is expected to increase further with the increase in Internet

education.

3. Awareness of IL&FS Invest smart as a Brand

Fig4.5.3 Result of Awareness of Reliance money as a Brand

Interpretation: This pie-chart shows that reliance money has a reasonable

amount of Brand awareness in terms of a premier Retail stock broking

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company. This brand image should be further leveraged by the company to

increase its market share over its competitors.

4. Awareness of Reliance Money Facilities

Fig4.5.4 Result of Awareness of Reliance money Facilities

Interpretation: Although there is sufficiently high brand equity among the

target audience yet, it is to be noted that the customers are not aware of the

facilities provided by the company meaning thereby, that, the company

should concentrate more towards promotional tools and increase its focus on

product awareness rather than brand awareness.

5. Satisfaction Level among Customers with current broker

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Fig4.5.5

Result of satisfaction level among customers with current broker

Interpretation: This pie-chart corroborate the fact that Strategicmarketing, today, has gone beyond only meeting Sales targets andgenerating profit volumes. It shows that all the competitors are striving hard

not only to woo the customers but also to make them Brand loyal bygenerating customer satisfaction.

6. Frequency of Trading

Fig4.5.6 Result of Frequency of Trading

Interpretation: Inspite of the huge returns that the share market

promises, we see that there is still a dearth of active traders and investors.

This is because of the non transparent structure of the Indian share

market and the skepticism of the target audience that is generated by the

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volatility of the stock market. It requires efficient bureaucratic intervention

on the part of the Government.

7. Percentage of earnings invested in Share Trading

Interpretation: This shows that people invest only upto 10% of theirearnings in the stock market, again reiterating the volatile and non-transparent structure of the Indian stock market. Hence, effective andefficient steps should be undertaken to woo the customers to invest more inthe lucrative stock market.

Fig4.5.7 Result of percentage of earning invested in share trading

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CHAPTER 5 SUMMARY AND CONCLUSIONS

5.1 SUMMARY OF LEARNINGS EXPERIENCE

To get initial success in this field is very difficult. Although the business

generation becomes easier with time as we serve more people who then get

added up in the loyal clientage. Thus time and service are two most factors

to get in this field.

Also the corporate remains a very important segment which gets

business in bulk but retail cannot be ignored which makes your business

ticking.

Customer remains in the pivotal position.

5.2 CONCLUSION AND RECOMMENDATIONS

Based on the findings of our project we would like to suggest the following:-

After sales services and follow up calls are important for getting new

references so trained telesales should be appointed for this purpose whose

sole work should be to make feedback calls.

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Investsmrt is having too many financial products right from Demat

account to General Insurance and not all the salespeople are familiar with

each and every product so the work force should be segregated each group

dealing in a specific product and the sales target should be given likewise.

While interacting with the investors I found that most of the customers

are unaware about the Mutual fund. Some of the people look upon mutual

funds and equity trading as gambling. Thus a mutual fund awareness

program can help to increase the penetration of mutual funds in the market.

INVESTSMART should declare in black ink that they will charge just 1

paisa per transaction. People tend to think that there must be some hidden

charges.

Rs950 account opening charges are too high when targeting a

corporate so the company should be flexible on this amount.

INVESTSMART should provide periodic training for updating the

product knowledge of various financial advisors.

Company should have a scheme of rewards and recognition to

employees and the field persons to boost their motivation.

KEY ISSUES AND CONCLUSIONS

Based on the above SWOT analysis and study of the available data I have

come to the following conclusions:

HUGE POTENTIAL:

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All though relatively new entrants in the market, INVESTSMART is

slowly but surely gaining a strong hold because it is finally able to grasp the

investment climate in Delhi. Secondly the branch managers at all the

branches are very knowledgeable with a lot of experience in the financial

markets so under their leadership can definitely expand its base

The entire workforce consists of mostly youngsters, which means they

can be encouraged and motivated to do good work because they have a long

way to go and most of them are eager to climb the ladder.

Right now Reliance is at its nascent stage and will surely grab the

major market under its belt very soon like in other fields.

Huge investments taking place:

The Stock Market has been very buoyant until now especially in the

past 3 years. This particular trend is very favorable because a soaring

SENSEX means higher returns, which encourages the investors to invest

their money in the market. Although in the past 3 months the market has

shown very unpredictable trend and has already lost over 1000 points.

So in order to make the best the only thing required is to recruit more

field staff who should be trained in a proper way to get better results.

In case of insurance, it requires push selling because people always

associate it with emergencies and unpleasant situations like death and they

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dont want to think about such situation let alone prepare for them, which

means it requires a lot of conviction on part of the executives.

Large untapped market:

People have just opened up to the idea of ULIPs because till now they

knew only two kinds of insurance plans, endowment and term plans so the

concept of high returns with protection is very new to them and slowly and

slowly these are becoming popular so there is a huge market waiting to be

tapped.

In the past few years there has been a tremendous inflow of funds in

the Indian market which has lead to the sky rocketing SENSEX. In fact there

has been a tremendous response from the investors not only in shares but

mutual funds as well. The Rs5700Cr infused in the market through the HSBC

INVESTSMART Equity mutual Funds is an example of the growing trust of

investors who earlier shied from such investments due to stock market

fiascos like the Harshad Mehta scam or the US64 disaster in which investors

lost huge amounts of money as well as their trust in financial instruments.

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With the FDI limits being relaxed, a lot of avenues will open up in the

insurance sector and insurance companies are expected to come up with

new plans with a great deal of customization and flexibility.

APPENDIX

QUESTIONNAIRE

Q1. In which of these Financial Instruments do you invest into?

Shares Mutual Funds Bonds Derivatives

Q2. Are you aware of online Share trading?

Yes No

Q3. Heard about IL&FS INVESTSMART?

Yes No

Q4. Do you know about the facilities provided by IL&FS INVESTSMART?

Yes No

Q4. Do you know about the facilities provided by IL&FS INVESRTSMART?

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Yes No

Q5. With which company do you have your DEMAT account?

Reliance money ICICI Direct IL&FS INVESTSMART India Bulls

Others (please specify)

Q6. What differentiates your Share trading company from others? (in regards of

brokerage, satisfaction, services, products )

Q7. Are you currently satisfied with your Share trading company?

Yes No

Q8. How often do you trade?

Daily Weekly Monthly Yearly

Q9. What percentage of your earnings do you invest in share trading?

Up to 10% Up to 25% Up to 50% Above 50%

Q13. How do you rate these share trading companies?

1. 2. 3.

4. 5.

Q14. What more facilities do you think you require with your DEMAT account?

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a. Reliance moneyb. ICICI Directc. India Bullsd. IL&FS INVESTSMARTe. Others (Please


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Name :

Age :

Sex : Male Female

Phone No :

Occupation:

References and Bibliography

Articles

Capital Market Review 2003-04,Published by SHCIL

Books

Financial Management Prashanna Chandra,6thedition

Financial Management Khan & Jain ,3th edition

Securities Analysis and Portfolio Management ,Fischer & Jordon

Research Methodology ,David .R. Cooper and Schindler

Websites

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Personal Information


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www.shcil.com

www.icicidirect.com

www.investsmart.com

www.nseindia.com

www.economicstimes.com

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http://www.shcil.com/http://www.icicidirect.com/http://www.investsmart.com/http://www.nseindia.com/http://www.economicstimes.com/http://www.shcil.com/http://www.icicidirect.com/http://www.investsmart.com/http://www.nseindia.com/http://www.economicstimes.com/

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