Anirban Chakraborty Project Report

8/6/2019 Anirban Chakraborty Project Report

1/51

PROJECT REPORT ON

APPLICATION OF MUTUAL FUND IN THE

INSTITUTIONAL SALES

AT

KOLKATA MARKET

COMPANY NAME

DBS CHOLAMANDALAM AMC

Pertaining to the submission of Final Project for the requirement of the Degree

in Master of Business Administration under The University of Calcutta.

DONE BY:

Mr. ANIRBAN CHAKRABORTY

MBA

Reg No :- 009834 of 2001 2002

Roll No :- 107 / MBA / 095054

INDIAN INSTITUTE OF SOCIAL WELFARE AND BUSINESS MANAGEMENT

KOLKATA 700 073

1
http://www.iiswbm.edu/default.asp


2/51

DECLARATION

I, Mr. Anirban Chakraborty, hereby declare that this project report

entitled as A STUDY on, Application of Mutual Fund in the Institutional

Sales from 2nd June 2009 to 31st July 2009, at DBS Cholamandalam

AMC, Kolkata in the requirements for the Organizational Project of MBA

in IISWBM under University of Calcutta.

This project report has not been submitted earlier for the award of any other

Degree, Diplomain any other university.

ANIRBAN CHAKRABORTY

Reg No :- 009834 of 2001 2002

Roll No :- 107 / MBA / 095054

DATE :

2


3/51

TABLE OF CONTENTS:

TOPIC PAGE NO.

1. PREFACE 5

2. AKNOWLEDGEMENT 6

3. EXECUTIVE SUMMARY 7

4. INTRODUCTION 8-9

OBJECTIVE OF THE STUDY 9

5. COMPANY PROFILE 10-20

CHOLAMANDALAM DBS 10

PROFILE

AREA OF BUSINESS

o CHOLAMANDALAM DBS FINANCIAL SERVICES GROUP 11

DBS CHOLAMANDALAM AMC LTD 11

DBS CHOLAMANDALAM DISTRIBUTION LTD 12

DBS CHOLAMANDALAM SECURITIES LTD 12

o CHOLAMANDALAM FINANCIALS 12

o ABOUT DBS BANK 13

o DBS CHOLAMANDALAM ASSET MANAGEMENT 14

o ABOUT MURUGAPPA GROUP 15

GROUP COMPANIES 16

GROUP STRENGTH 18

GROUP TURNOVER 18

3


4/51

o CHOLA BRANCH NETWORK IN INDIA 19

6. LITERATURE SURVEY 21

7. CONCEPTUAL FRAMEWORK 22-35

o CONCEPT AND ROLE OF MUTUAL FUND 22

o MUTUAL FUND PRODUCTS 26

o FUND STRUCTURE AND CONSTITUENTS 29

o OFFER DOCUMENT AND KEY INFORMATION 31

MEMORADUM

o DIFFERENT MUTUAL FUNDS OF DBS CHOLA AMC 32

8. RESEARCH METHODOLOGY 36-39

o RESEARCH DESIGN 36

o SAMPLING UNIT 36

o SAMPLE SIZE 37

o FIELD WORK 37

o DATA COLLECTION METHOD 38

9. ANALYSIS OF DATA 40-44

10. CONCLUSION 45

11. RECOMMENDATION 46

12. LIMITATIONS 47

12. BIBLIOGRAPHY 48

13. ANNEXURE 49-50

4


5/51

PREFACE

In order that the fresh MBAs do not develop into ivory towards

professionals some amount of practical exposure and experience is included in

the MBA course curriculum. It is done with a view to give some practical

oriented along with the theoretical orientation.

I was assigned to do my major project in the DBS CholamandalamAMC [Kolkata]. I worked with the organization to study through, Application

of Mutual Fund in the Institutional Sales

I tried to analyze the market position of DBS Cholamandalam AMC and

to bring investment from the market. I shall be satisfied if this study and

finding prove beneficial to the organization in any way.

5


6/51

AKNOWLEDGEMENT

I wish to express my appreciation to all those whom I worked/interacted

and whose thoughts and insights helped me in increasing my knowledge and

understanding my project. I would like to thank DBS Cholamandalam AMC

[Kolkata] for approving me to do this Project in this Organization.

I would take this opportunity to thank Mr. Satyaki Bhattacharya,

Manager-Institutional sales of DBS Cholamandalam, for enlightening me with

the product knowledge on the very first day off my training, which has helped

me immensely during my field work.

My sincere thanks to Mr. Prabal Banerjee, Asst. vice President & Regional

Manager, Eastern Region for teaching me some important aspects of life and

helping me whenever I approached him.

I convey my thanks to IISWBM for giving a warm opportunity to do

my Project in this esteemed organization named DBS Cholamandalam AMC.

Thank You All

ANIRBAN CHAKRABORTY

Reg No :- 009834 of 2001 2002

Roll No :- 107 / MBA / 095054INDIAN INSTITUTE OF SOCIAL WELFARE AND BUSINESS MANAGEMENT

KOLKATA 700 073

6


7/51

EXECUTIVE SUMMARY

The project has been successfully completed in two months project starting

from 2nd June 2009 to 31st July 2009 from DBS Cholamandalam Asset

Management. Under the guidance of Mr. Satyaki Bhattacharyya, was my guider

form DBS Cholamandalam Asset Management.

The title of the project is Application of Mutual Fund in the Institutional

Sales.

The survey was done in the Kolkata region covering Small and Medium

Enterprises in areas such as N.S Road, R.N Mukherjee Road, A.J.C Bose Road,

B.B.D Bag, Park Street, Camac Street, Sarat Bose Road, Russell Street, Lake

Town, Gariahat, and Chowringhee etc.

This survey was done to find out whether the enterprises where ready to invest

in Debt market or not. The study was done to find out the debt market situation

exists and also whether the companies have investable surplus to invest in Debt

market.

For that we have used our research methodology in two ways first of all Primary

data as Informal interview, Phone calls and Fixing appointments and next was

Secondary data like Company database and from internet connection. Our

secondary object was to acquire new clients for DBS Cholamandalam Asset

Management.

From this entirely two months project we have gathered the knowledge of debt

market in the real field. We have got the idea about the corporate culture and

realize the behavior of different people in difference areas.

7


8/51

INTRODUCTION

The project title Application of Mutual Fund in the Institutional Sales is

related with Corporate Investment. The title shows an indication that to bring

investments from the companies in Mutual Fund.

To bring Investment several Mutual Fund policies of my company had to be

explained to other companies so that they invest their excess funds.

The Project also gives a clear idea about the Mutual Fund and the Investment

Market exists.

The title was given to me from the company because my work was related to

Corporate Investment in Mutual Fund.

We have visited several companies from the database given to us and had

approached them to invest their excess funds in our company. Our preachment

and convincing should fulfill the requirement of the companies. We used to

explain the corporate solutions that can be achieved through investing at

Mutual Fund of our company. We had generally visited the Small and Medium

Enterprises at the Kolkata market to conduct this survey.

This survey was done to find out whether the enterprises where ready to invest

in debt market or not. The study was done to find out the debt market situation

exists and also whether the companies have investable surplus to invest in Debt

market.

For that we have used my research methodology in two ways first of all Primary

data as Informal interview, Phone calls and Fixing appointments and next was

Secondary data like Company database and from internet connection. My

secondary object was to acquire new clients for DBS Cholamandalam Asset

Management.

8


9/51

OBJECTIVE OF THE STUDY

This study was done to survey the market situation of the Corporate Investment

exists. Enterprises which have Investable surplus generally invest their funds

somewhere to earn more Revenue. These types of funds are generally invested

in several sectors such as Mutual Fund, Real Estate, Banks, and Shares etc.

To get a complete knowledge about the Corporate Investments in

mutual fund.

To survey the potential market of DBS Cholamandalam AMC.

The study was done to find the investable pattern of the Small and

Medium

Enterprises.

The study was done to find out whether the companies have Investable

Surplus to

Invest.

The study was done to find out the market share of the investment

companies.

The study was done to acquire new clients for DBS Cholamandalam

Asset

Management.

Summary

This chapter deals with the objective of the study and what have I learnt from

the study. It also deals with little discussion of the project title that I have given.

9


10/51

COMPANY PROFILE

Cholamandalam DBS

Profile -

Cholamandalam DBS Finance Limited is a pan-Indian company with a joint venture

between Murugappa Group and DBS Bank of Singapore, offering a complete range of

financial services. It is one of India's largest domestically owned NBFCs with a gross asset

base (including securitised assets) of over Rs 4490 crore. Its bouquet of services comprises

personal loans, vehicle finance, corporate finance, capital market finance and home equity

loans.

CDFL is a leading player in automobile finance covering a wide range of vehicles such as

heavy and light trucks, cargo three-wheelers and multi-utility vehicles. The company has

presence in over 160 locations across India. The company has evolved with time and built a

portfolio of high quality. The company has maintained an unbroken track record of dividend

payment for over 26 years. Following its partnership with DBS Bank, CDFL has introduced

consumer finance into the Indian market.

10
http://www.cholamandalam.com/home.asp


11/51

Areas of business -

Since its incorporation in 1978 as Cholamandalam Investment & Finance Company Limited

(CIFCL), a NBFC, the company has successfully branched into valuable services in the

competitive scenario such as commercial vehicle finance focusing on high yield

segments with diversified customer base and exploring new segments like three-wheelers

and used vehicles; corporate finance sector servicing business needs of corporates,

currently intending to extend its services to small and medium enterprises (SMEs) in key

markets; personal loans & home equity loans business currently poised to expand

nationally through a delivery support channel across the country

To sustain and enhance the high quality CDFL service experience of customers, the

company is also working hard on its infrastructure and service capabilities technology

initiatives that will provide seamless transaction delivery across India and establishing call

centers to provide more efficient customer service delivery besides supporting and boosting

cross-sell and collection mechanism are in the pipeline.

CHOLAMANDALAM DBS FINANCIAL SERVICES GROUP

CHOLAMANDALAM DBS FINANCIAL SERVICES GROUP Cholamandalam DBS is a

pan-Indian, composite financial services provider. It comprises the parent company,

Cholamandalam DBS Finance Limited (CDFL), and its subsidiaries and associates DBS

Cholamandalam Distribution Limited, DBS Cholamandalam Asset Management Company

Limited and DBS Cholamandalam Securities Limited. The shares of CDFL are listed in the

Mumbai (BSE) and National (NSE) Stock Exchanges.

DBS Cholamandalam AMC Ltd (DCAMC) -

Cholamandalam AMC Limited (DCAMC) is the asset management company and the

investment manager of Chola Mutual Fund, which offers mutual funds to retail and

institutional investors. Established in 1996, DCAMC manages funds in excess of Rs 15

11


12/51

billion across 14 schemes with over 100,000 customers. Known for its prudent philosophy

in fund management, DCAMC offers the entire range of cash, debt and equity products.

DCAMC is present in over 14 locations and also has a strong distribution network in place.

DBS Cholamandalam Distribution Limited (DCDL)

DBS Cholamandalam Distribution Limited (CDSL) is in the business of distribution of a

wide array of financial services products - both in-house and third party - to high-net worth

and retail clients. Products offered include mutual funds, fixed income, share trading,

savings instruments, capital bonds, IT/PAN processing services, equity IPOs and life and

general insurance. The company combines reach in over 22 cities with richness of its

investment advisory services. Established in 2000, the company already mobilizes over

Rs.2500 crores of investments in a year.

DBS Cholamandalam Securities Limited (DCSec)

DBS Cholamandalam Securities Limited (DCSec) is a securities brokerage firm offering

stock broking and equity research services to institutional investors, including many of the

largest mutual funds in India, and to select individual clients. DCSec is a member of

Bombay Stock Exchange and National Stock Exchange. It is also a depository participant

with NSDL.

Cholamandalam Financials

Cholamandalam DBS Finance Limited (Chola DBS) has posted a growth of 15 per cent in

the year 2005-06 in the disbursements of its core products - commercial vehicles, multi-

utility vehicles and cars. Total disbursements for all categories of vehicles stood at Rs. 1295

crore.

The company's gross asset base (including assets de-recognised) grew by 18 per cent to Rs.

2309 crore. The Profit after Tax (PAT) grew to Rs. 35.20 crore, from Rs. 34.07 crore the

previous year.

12


13/51

About DBS Bank

Headquartered in Singapore, DBS is one of the largest financial services groups in Asia.

The largest bank in Singapore and the fifth largest banking group in Hong Kong as

measured by assets, DBS have leading positions in consumer banking, treasury and markets,

asset management, securities brokerage, equity and debt fund raising. Beyond the anchor

markets of Singapore and Hong Kong, DBS serves corporate, institutional and retail

customers through its operations in Thailand, Malaysia, Indonesia, India and The

Philippines. In China, the Bank has branches and representative offices in Shanghai,

Beijing, Guangzhou, Shenzhen, Fuzhou, Tianjin, Dongguan and Hangzhou. The Bank's

credit ratings are one of the highest among banks competing in the Asia-Pacific region, and

the highest among banks in Singapore.

About DBS India

Our presence in India dates back to 1994 when DBS Bank opened a representative office in

Mumbai, which was upgraded to a full branch in March 1995. A second branch licence was

granted in 2005 for New Delhi. DBS services its clients from all the major cities in India

through its advisory relationship team. As one of Asia's largest financial services groups,

DBS has the resources, expertise and experience to provide a full range of corporate and

investment banking services to large corporations, financial institutions as well as SMEs in

India.

Working closely with its headquarters in Singapore, the Bank offers wealth management,

advisory services, trade finance, funding, transactional services and a whole range of

treasury solutions. DBS India has extensive experience in providing innovative financial

13


14/51

solutions to a number of blue-chip companies in India. A key player in the Asian capital

markets, DBS is a well-recognised name in corporate banking, loan syndication and fund-

raisin.

DBS CHOLAMANDALAM ASSET MANAGEMENT(KOLKATA)-

DBS Cholamandalam Asset Management was established in 1996, it manages funds in

excess of 2100crores (as on 31st March 2008) across 23 schemes over 200000 customer

accounts. It is known for prudent & discipline investment philosophy, DCAM products

cover the entire range of debt, equity & cash asset classes.DCAM is present over 20

locations in the country and also has a strong distribution network.

DBS Cholamandalam is joint venture between Murugappa Group and DBS Bank of

Singapore. The Company along with its subsidiaries and affiliates offers individual and

institutional customers a range of Financial Services-vehicle finance, capital market finance,corporate finance, mutual funds, securities brokering and distribution of investment and

insurance product. The Companies shares are listed on BSE and NSE.

PRODUCTS-

DBS Chola Mutual Fund offers the entire range of funds across asset classes in equity, debt

and money market.Within each asset classes you will find Funds that adhere to distinct

investment styles, so that you can build your portfolio that best suits your goals and

objectives.

EQUITY-

OPEN ENDED SCHEMES

14


15/51

1) DBS Chola Growth Fund.

2) DBS Chola Opportunity Fund.

3) DBS Chola Midcap Fund.

4) DBS Chola Multi- Cap Fund.

5) DBS Chola Global Advantage Fund.

6) DBS Chola Tax Saver Fund.

7) DBS Chola Hedged Equity Fund.

8) DBS Chola Contra Fund.

CLOSE ENDED SCHEMES

1) DBS Chola Infrastructure Fund.

2) DBS Small Cap Fund.

(A 3 year close ended equity fund with automatic conversion into an open ended scheme

upon maturity)

DEBT-

1) DBS Chola Triple Ace.

2) DBS Chola Freedom Income-Short Term Fund.

3) DBS Chola Liquid Fund.

4) DBS Chola Short Term Floating Fund.

5) DBS Chola GILT Investment Fund.

6) DBS Chola Interval income Fund quarterly Plan C.

About Murugappa Group

Headquartered in Chennai, the $1.6 billion Murugappa Group is Indias leading

business conglomerate, which fosters an environment of professionalism for its strong

workforce of 28,000 employees. The group has 29 registered companies, which are market

leaders in diverse areas on business viz. engineering, abrasives, finance, general insurance,

15


16/51

sanitary ware, cycles, sugar, farm inputs, fertilizers, plantations, bio products and

nutraceuticals. The Group has manufacturing units in 12 states. The Group has forged strong

joint venture alliances with leading international companies like Roca of Spain, Cargill of

Geneva, Cerdak of South Africa, DBS Bank of Singapore, Mitsui Sumitomo of Japan and

Groupe Chimique Tunisien of Tunisia and has consolidated its status as one of the fastest

growing diversified business house in India.

Murugappa Group Companies-

Carborundum Universal Ltd - Pioneering presence in

Abrasives, Refractories, Electro minerals and Industrial Ceramics.

Cholamandalam Investment & Finance Co. Ltd -Leadingholistic financial services provider in the country

Coromandel Fertilisers Ltd - Indias largest fully integrated fertilizer

complex One of the leading players in the phosphatic fertilizer industry.

16


17/51

Godavari Fertilisers & Chemicals Ltd-Second largest producer of DAP inIndia.Market leaders of DAP in Andhra Pradesh and other markets.

EID Parry (India) Ltd Parryware - Market leader in vitreous Sanitary

ware.One of the largest Integrated Sugar complexes with co-generated Power.Largest producer of Neem based pesticides in the world.

Parry Agro Industries Ltd-One of High yielding plantations in the country

Parry Nutraceuticals Ltd-Leader in the production of nutritional

Supplement Spirulina algae. World class facility in production of algae

17


18/51

Tube Investments of India Ltd- Market leader in the manufacture of

specialty Steel Tubes and Strips, Metal Forming. Biggest exporter of chains.

Wide range of cycles.

Group Strengths -

Abrasives 43% Market shareCoated 2 Million Sq.Mts. p.a

Bonded 10,000 tons p.a.Phosphatic Fertilizers 2 Million tons p.a

Sugar 350,000 tons p.a

Steel Tubes, Strips 250,000 tons p.aRetail Finance 350 Million US $ p.a

Tea 18 Million Kgs.

Chains 45 Million ESS ft p.aSanitary ware 38% market share in

(Premium & Mid segment)

Cycles 3 Million nos p.a

Group Turnover-

18

2400

2600

2730

31

00

3700

3896

4196

4206 5

266 6

250

19

95-

96

19

96-

97

19

97-

98

19

98-

99

19

99-

00

20

00-

01

20

01-

02

20

02-

03

20

03-

04

20

04-

05


19/51

(Source: www.dbscholamandalam.com)

Chola Branch Network In INDIA.

Mumbai

Pune

IndoreBaroda

Ahmedabad

Jaipur

Bangalore

Cochin

Madurai

Coimbatore

Chennai

Hyderabad

JharkhandKolkata

PatnaLucknow

Chandigarh

Delhi

Ludhiana

Branches DR

19


20/51

(Soruce: www.dbscholamandalam.com)

Summary of The Company profile :-

DBS Cholamandalam is a Murugappa Groups South Indian based

company. It was formed in the year 1900 by Mr.Ramanathan Chettiar. It has its

presence in countries like Myanmar, Singapore, U.S.A, U.K, China, South Africa

etc.

It is one of the Largest Family promoted, professionally managed business

group. DBS Chola believes in value for money to customers through quality

products and services.

It deals with products like Sanitary Ware, Phosphatic Fertilizers, Abrasives,

Atomotive Chains, Steel Tubes, Car Door Frames, CRF Sections for Wagons,

Neemazol Bio Pesticides, Textiles and Rubber Plantation, General insurance,

Stock Broking, Tea Estate and Mutual Fund etc.

Today Murugappa Group has 40 manufacturing facilities across 12 States

in India with over 28,000 employees. Its Turnover in the year 2006-2007 is

Rs.6,250 crores.

20


21/51

LI

As per the book SecurityInvestors generally plans f

year to few years

According to the same book

limited risk.

21


22/51

CONCEPTUAL FRAMEWORK

1.Concept and Role of Mutual Fund

What is a Mutual Fund?

It is a pool of money, collected from investors, and is invested according to certain

investment objectives. The contributors and beneficiaries are the same class of people

namely the investors. A mutual funds business is to invest the funds thus collected,

according to the wishes of the investors who created the pool.E.g. money market mutual

fund seeks investors to invest predominantly in Money Market Instruments.

What are the important characteristics of a Mutual Fund?

The ownership is in the hands of the investors who have pooled in their funds.

It is managed by a team of investment professionals and other service providers.

The pool of funds is invested in a portfolio of marketable investments.

The investors share is denominated by units whose value is called as Net Asset Value

(NAV) which changes everyday.

The investment portfolio is created according to the stated investment objectives of the

fund.

What are the advantages of Mutual Funds to Investors?

Portfolio diversification.

Professional Management.

Reduction in Risk.

Reduction in Transaction costs.

Liquidity.

Convenience and Flexibility.

22


23/51

How do Mutual Funds help the financial planning objectives of investors?

Mutual fund comprises of 39 funds, offering nearly 500 products.

Competition in industry has led to innovative alterations to standard products.

Investors can choose the manner in which their returns would be distributed.

Investors can choose options that suit their return requirements and risk profile.

How does a Mutual Fund reduce the risk for the Investor?

Mutual Funds invest in a portfolio of securities, thus achieving diversification.

How does a Mutual Fund enable an investor to hold a diversified portfolio?

By offering ready made diversified portfolio, mutual funds enable investors to hold adiversified portfolio.

What does Professional Management of the Mutual Fund mean, to the investor?

Mutual Funds are managed by investment managers who are appointed by trustees andare bound by investment management agreement.

AMCs are required to be adequately capitalized and are closely regulated by SEBI.

AMCs are prohibited to indulge in any other business.

There are a number of safeguards and prudential regulations in the interest of the

investors.

Investment managers and funds are bound by the AMFI code of ethics.

How can Mutual Fund reduce transaction Costs?

Mutual Funds benefit the investor because of economies of scale, which helps inreducing transaction costs.

23


24/51

What are the liquidity features of a mutual fund investment?

Most of the funds are open ended. Investors can buy sell units at the prevailing NAV

Funds can provide liquidity even if the underlying market may not have the liquidity.

How do Mutual Funds enable regular Savings?

Mutual funds are issued as account statements, with the facility to hold units in fraction

up to 4 decimal units. It is simpler for investors to make additional investments;

repurchase, reinvest, convert holdings and to alter investments.

What information does the Mutual Fund usually provide to the investor?

Daily NAVs.

Complete portfolio of the Fund.

Credit quality of their portfolios.

Behavior of NAV since inception.

Additional Information like,

Maturity profile of their investments.

Commentaries of the Fund Managers.

What are the disadvantages of investing through Mutual Funds?

No control over the costs. Regulators therefore limit the expenses of Mutual Funds.

No tailor made portfolios.

Managing a portfolio of funds.

24


25/51

What are the important phases in history of mutual funds in India?

25

1 9 6 3 - 1 9 8 7U T I s o le p l a y e r in t h e i n d u s t r y , c r e a t e d b y a n A c t o f P a rl ia m e n t ,

U T I la u n c h e s fi rs t p r o d u c t U n i t S c h e m e 1 9 6 4

U T I c r e a t e s p r o d u c t s s u c h a s M IP 's , c h i ld r e n s p l a n s , o ffs h o r e fu

U T I m a n a g e d a s s e t s o f 6 7 0 0 C r a t t h e e n d o f t h is p h a s e

1 9 8 7 - 1 9 9 3In 1 9 8 7 P u b l ic S e c t o r B a n k s a n d F I's

S B I m u t u a l fu n d w a s t h e fi rs t n o n - U T I m u t u a l fu n d

U T I's c o rp u s g re w t o R s . 3 8 , 2 4 7 C r a n d p u b lic S e c t o r F u n d s m a

1 9 9 3 - 1 9 9 6In 1 9 9 3 , M u t u a l F u n d In d u s t ry w a s o p e n t o p r i va t e p l a y e r s .

S E B I's f ir s t s e t o f r e g u l a t io n s fo r t h e i n d u s t ry fo r m u l a t e d i n 1 9 9

S i g n i fi c a n t in n o va t i o n s , m o s t ly i n it i a t e d b y p r iva t e p la y e r s

1 9 9 6 - 1 9 9 9Im p l e m e n t a t io n o f n e w S E B I re g u l a t io n s l e d t o ra p i d g ro w t hB a n k m u t u a l fu n d s w e r e re c a s t a s p e r S E B I g u id e l in e s

U T I c a m e u n d e r vo l u n t a ry S E B I s u p e r vis io n .

1 9 9 9 - 2 0 0 0R a p i d g r o w t h , s i g n i fi c a n t in c r e a s e i n c o r p u s o f p r iva t e p l a y e r s

T a x b r e a k o ffe r e d c re a t e d a r b i tr a g e o p p o r t u n i t ie s

B o n d f u n d s a n d l iq u i d fu n d s re g i s t e re d h i g h e s t g ro w t h

U T I's m a rk e t s h a re d r o p s t o n e a r ly 5 0 %


26/51

2. Mutual Fund Products

How does a Mutual Fund Offer a choice of products to the investor?

Depending on the investment portfolio that is created, and the segments of the various

markets in which the funds are invested, there is a choice of funds to the investors.

What are the generic choices of mutual fund investor?

Nature of Participation: open or closed ended funds.

Nature of Income Distribution: Dividend, growth, reinvestment. Periodicity of

dividends can also be selected

What are open-ended funds?

In an open ended fund, investors can buy and sell units of the fund, at NAV related

prices, at any time, directly from the fund.

Open ended scheme are offered for sale at a pre- specified price, say Rs. 10, in the

initial offer period. After a pre-specified period say 30 days, the fund is declared open

for further sales and repurchases

Investors receive account statements of their holdings

What are closed end funds?

A closed -end fund is open for sale to investors for a specified period, after which

further sales are closed. Any further transactions happen in the secondary market where closed-end funds are

listed.

The price at which the units are sold or redeemed depends on the market prices, which

are fundamentally linked to the NAV.

Investors receive either certificates or depository receipts, for their holdings

26


27/51

What is the dividend option?

Investors, who choose the dividend option on their investments, will receive dividends

from the mutual fund as and when such dividends are declared.

Dividends are paid in the form of warrants, or are directly credited to the investors

bank accounts.

Normal dividend plan : Timing of payout is decided by the fund

Pre-Specified Distribution schedules: Option of daily , weekly, monthly, quarterly, half-

yearly or annually

What is the growth option?

Investors with longer-term investment horizons and limited requirements for, income

choose this option. The return to this investor is the rate at which his initial investments

have grown over the period for which he has invested in the fund.

What is the re-investment option?

Investors re-invest the dividends that are declared by the mutual fund, back to into the fund

itself, at NAV that is prevalent at the time of re-investment.

What are the Mutual Fund types?

Fund Types Based on nature of Investments- Equity, Bond and Money Market Funds.

Fund Types by Investment Objective Growth Funds, Value Funds, Income Funds.

Fund types based on Risk Profile.

What is aggressive growth fund?

They target maximum capital appreciation, invest in less researched or speculative stocks

and may adopt speculative investment strategy to attain their objective of high returns for

the investor.

27


28/51

What are Growth Funds?

Investment in companies whose earnings are expected to rise at an above average rate.

Primary objective is to have capital appreciation in 3-5 Year span. Less volatile than

aggressive growth funds.

What are Sectoral Funds?

Sectoral funds choose to invest in one or more chosen sectors of the equity market. They

are not as well diversified as simple equity funds as they tend to focus on fewer sectors.

They can exhibit volatile returns.

What are offshore funds?

These funds invest in equities in one or more foreign countries thereby achieving

diversification across the countrys borders.

What are Hybrid funds?

Mutual Funds mix these different types of securities in their portfolios. These funds seek to

hold a relatively balanced holding of debt and equity securities in their portfolios.

What are Balanced Funds?

Funds that invest both in debt and equity markets are called as balanced funds. Typical

balanced fund would have equal investment in both markets.

What are Asset Allocation Funds?

These funds follow variable asset allocation policies and move in and out of asset class

depending on the outlook for specific markets.

What are Debt funds?

28


29/51

Those funds that invest predominantly in Debt Securities. They are also known as Income

funds as they pay periodic interest to investors.

What are liquid and money market funds?

These debt funds invest only in instruments with maturities less than a year. The investment

portfolio is very liquid and enables investors to hold their investments for very short

horizons of a day or more.

What are Load and No-Load Funds?

Marketing of a new mutual fund scheme involves initial expenses. These expenses can be

recovered from the investors at different times. At the time of investors entry into thefund/scheme buy deducting a certain portion of the initial contribution. By charging the

fund with a fixed amount each year, during the stated number of years. At the time of

investors exits from the fund. If the initial expenses are borne by the investment manager

then the fund is said to be a no- load fund.

3. Fund Structure and Constituents

What is the regulatory structure of mutual funds in India?

The structure of mutual funds in India is governed by SEBI (Mutual Fund) Regulations,

1996. It is mandatory to have a three tier structure of Sponsor-Trustee-Asset

Management Company. The Sponsor is the promoter and he appoints the Trustees who

are responsible to the investors of the fund. AMC is the business face of the mutual fund

as it manages all the affairs of the fund.

Who manages the Mutual Fund?

The Sponsor, acting through the trustees, appoint all the functionaries to manage M.F

29


30/51

Investment Managers, known as AMC.

Registrars and Transfer Agents.

Brokers.

Selling agents and Distributors.

Custodians.

Depository participants.

Bankers.

Legal advisors.

Auditors.

What are the rights of the Trustees?

Trustees appoint the AMC, in consultation with the sponsor and according to SEBI

Regulations.

All Mutual Fund Schemes floated by the AMC have to be approved by the Trustees.

Trustees can seek information from the AMC regarding the Operations and compliance

of the mutual fund.

Trustees can seek remedial actions from AMC, and in cases dismiss the AMC.

Trustees review and ensure that net worth of the AMC is according to stipulated norms,

every quarter.

What are the regulatory requirements for the AMC?

AMC must have a minimum net worth of Rs. 10 Cr., at all times

Only SEBI registered AMC can be appointed as investment managers of mutual funds.

An AMC cannot be an AMC or Trustee, of another Mutual Fund

AMCs cannot indulge in any other business, other than that of asset management

At least half of the members of the Board of an AMC have to be independent.

The 4th Schedule of SEBI regulations spells out rights and obligations of both trustees

and AMCs

30


31/51

How are Indian mutual funds organised?

Though the trust is the mutual fund, the AMC is its operational face.

The AMC is the first functionary to be appointed and is involved in the appointment of

all other functionaries.

The AMC structures the mutual fund products, markets them and mobilises the funds,

manages the funds and services the investors.

All the functionaries are required to report to the trustees who lay down the ground rules

and monitor their working.

4.Offer Document and Key Information Memorandum

Where can the investor find out the details about a mutual fund scheme, before

investing his money?

The mutual fund is required to file with SEBI a detailed information memorandum

called the prospectus, in a prescribed format giving all the information of the fund and

the scheme.

An abridged version of the offer document, in a prescribed format is appended to the

application form.

Investors can get a summary of the offer document in the abridged version known as

the Key Information Memorandum

What does the Offer Document usually contain?

It contains information regarding,

Objective of the scheme

Asset allocation

31


32/51

Sale and repurchase procedure

Load and expense structure of the scheme

Accounting and valuation policies

It also contains

Its constituents

Operational details as how to apply

Rights and duties of the investors

Why is the offer document important to investors?

Information about the product, and its fundamental attributes, are specified in the offer

document. It forms the basis of investors decisions. Offer Document is a legal document

that specifies the details of the offer made by the mutual fund.

What are the Mandatory summary disclosures to be made on the cover page of the

offer document?

1. Name of the mutual funds.

2. Name of the scheme.

3. Type of scheme.

4. Name of the AMC.

5. Classes of units offered for sale.

6. Price of units.

7. Name of the guarantor in case of assured return schemes.

8. Opening, closing and earliest closing date of offer.

9. Mandatory statements.

5. Different Mutual Funds of DBS Chola AMC

32


33/51

DBS Cholamandalam AMC has special 3 types of Funds

a) DBS Chola Liquid Fund

b) DBC Chola Short Term Floating Rate Fund

c) DBS Chola Freedom Income-Short Term Fund

a) DBS Chola Liquid Fund-

Investment objective- The investment objective will be to generate reasonable returns

while maintaining safety and providing the investor superior liquidity. To achieve these

objective investments will be predominantly made in a well-diversified and highly liquidportfolio of money market instruments, government securities and corporate debt.

(sourcewww.dbscholamandalam.com)

Fund Managers Comment- DBS Chola Liquid Fund is a very short-term fund with

investments in fixed income assets of residual maturity of one year or less. The strategy for

managing the funds is to invest in the highest rated instruments which are liquid in thesecondary market.

b) DBC Chola Short Term Floating Rate Fund

33

ASS

NCD,

53.06%


34/51

Investment objective- The investment objective of the scheme is to generate regular

income to investment in a portfolio comprising substantially of floating rate debt/money

market instrument, fixed rate debt/money market instruments swapped for floating rate

return and fixed rate debt securities, govt. securities & money market instruments.

Asset Profile

CP, 8.70%

PTC, 26.78%

T-BILL, 0.01%

CASH, 7.49%

CD, 12.73%

NCD, 59.26%

(Source www.dbscholamandalam.com)

Fund Managers Comment- DBS Chola Short Term Floating Rate Fund is a quasi liquid

fund with more than 50% of the assets in floating rate assets. Investments are in highest

rated instruments.

c) DBS Chola Freedom Income-Short Term Fund-

Investment objective- An income scheme with at least 80% investments in fixed income

securities with the objective of generating regular and stable income for the unit holders ofthe scheme. The balance will be invested in money market instruments of high quality. The

scheme will not invest in equities or equity related instruments.

34


35/51

Asset Profile

CP, 13.84%

PTC, 19.74%

T-BILL, 0.04%

CASH, 5.14%

CD, 24.22%

NCD, 47.30%

(Source www.dbscholamandalam.com)

Fund Managers Comment- DBS Chola Freedom Income is a short-term fund. The

scheme seeks to provide better returns than liquid fund. The duration of the fund is longer

than the liquid fund.

Summary:

Mutual Fund is a pool of money collected from investors. Here the several benefits of

Mutual Fund have been discussed. Also the Mutual Fund products of DBS Chola AMC

have been discussed.

35


36/51

RESEARCH METHODOLOGY

Research Methodology is a way to systematically solve the research problem. Itmay be understood as a science of studying how research is done scientifically. Thesection includes the overall research design, the sampling procedure, the datacollection method, the field work and analysis and procedure.

Research design : For this research project exploratory and descriptive method is used.Data collection method : Data collect for the research can be classified as primarydata and secondary data.

RESEARCH DESIGN :-

A framework for conducting the marketing research project. It specifies the details of the procedures necessary for obtaining the information needed to structure and/or solve

marketing research problems.

The project is mainly Descriptive cum Exploratory.

Descriptive :-

It describes market characteristics or functions. It is preplanned and structured design.

Descriptive research is marked by the prior formulation of specific hypotheses. The several

methods are secondary data, surveys, panels and observational.

Exploratory :-

To provide insights and understanding of the problem. It was often the front end of total

research design. It is flexible and versatile. The several methods are expert surveys, pilot

surveys, and qualitative research etc.

Keeping in mind the above mentioned concept of various types of research and taking care

of our study we have taken the descriptive cum exploratory research.

SAMPLING UNIT :-

36


37/51

A Sampling Unit is an element, or a unit containing the element, that is available for

selection at some stage of the sampling process.

Before selection for survey a sampling unit was taken. The sampling unit was the Small and

Medium Enterprises which we had visited. The informations about these Small and

Medium Enterprises were given from the company database and we had selected randomly

from there.

SAMPLE SIZE :-

It is the total size of the units that are used for the analysis of data. The sample size

determined statistically represents the final or net sample size that must be achieved in order

to ensure that the parameters are estimated with the desired degree of precision and the

given level of confidence. In surveys, that represents the number of interviews that must be

completed. In order to achieve this final sample size, a much greater number of potential

respondents have to be contacted. The initial sample size has to be much larger because

typically the incidence rates and completion rates are less than 100%.

We were given a database of around 100 companies to cover in 40 days, but due to time

constraints we could only visit 50 companies and collected necessary datas from them. The

analysis is done on a sample size of 40 collected from the 50 companies we have visited.

So my sample size is 40.

FIELD WORK :-

Marketing research data are rarely collected by the persons who design the research.

Researchers have two major options for collecting their data. They can develop their own

organization or they can contract with a field work agency. In either case, data collection

involves the use of some kind of field force. The field force operates in Personal Interviews,

observations, office telephones and internet surveys. The field workers who collect the data

typically have little research background or training.

37


38/51

The main work of the project was to bring out investment from the Small and Medium

Enterprises by explaining them the corporate solutions DBS Cholamandalam was providing.

It was an individual application (survey) carried on in the market.

The company representatives were interviewed individually. Date and time was allotted to

make appointment with them. We had visited the companies directly to make these

appointments.

The universe from where samples are taken comprises of Small and Medium Enterprises.

The company dignitaries were interviewed to collect information.

The survey was done in the Kolkata Region covering Small and Medium Enterprises in

Areas such as :-

N. S ROAD

R. N. MUKHERJEE ROAD

A. J. C BOSE ROAD

B.B.D BAG

PARK STREET

CAMAC STREET

SARAT BOSE ROAD

RUSSEL STREET

CHOWRINGHEE

GARIAHAT

LAKE TOWN etc

The problem that arises during the survey with the samples was that many of the companies

cannot be visited and therefore the result is only on the visited samples.

DATA COLLECTION METHOD :-

The task of data collection begins after a research problem has been defined and research

design/plan chalked out. While deciding about the method of data collection to be used for

38


39/51

the study, the researcher should keep in mind two types of data i.e. Primary and Secondary

data.

Primary Data :

The primary data are those which are collected afresh and for the first time, and thus happen

to be original in character. There are several types of primary data such as Questionnaire,

individual survey, interview method, phone calls, panel group, focus group, electronic

media, observations etc. From these several primary data we have used individual survey,

interview method and phone calls as these were required for my collection of data. To study

the market position individual survey is the appropriate method to collect the primary data.

Information from the company representatives were collected only by meeting them and

asking the question through the help of questionnaires.

Secondary Data :

Secondary data means data that are already available i.e., they refer to the data which have

already been collected and analyzed by someone else. When the researcher utilises

secondary data, then he has to look into various sources from where he can obtain them.

There are several types of secondary data available such as RBI Bulletin, newspapers,

leaflets, several books, company database, several websites etc. From this secondary data

we have taken help of company database and some websites to get informations.

Summary :-

To make this survey several companies were visited and necessary datas were collected

through the help of data instrument. Also the places were the companies are visited and the

limitations faced were discussed.

39


40/51

ANALYSIS OF DATA

The selection of the analysis of the data is based on the research objectives. The datas are

collected with the help of Personal Interviews and by filling the Questionnaire. Data

analysis is not an end in itself. Its purpose is to produce information that will help address

the problem in hand.

Table 1.1: Companies Interested to Invest In Mutual Fund.

21, 52%19, 48% Interested

Not Interested

Sample size-40

Interpretation : In the Pie-chart it shows that majority of the companies (52%) have

shown interest to invest in Mutual Fund when we interviewed them and explained them the

corporate solution achievable through investment in Mutual fund.

40


41/51

Table 1.2: Presently enterprises having investable surplus and enterprises

running at overdraft.

7, 18%

33, 82%

Have Investable Surplus Running at Overdraft

Sample size-40

Interpretation: In the Pie-chart it shows that 82% of the enterprises are having investable

amount to invest, whereas remaining 18% of the enterprises are running at O/D in Bank, so

they have no investable surplus.

Table 1.3: Companies Having Their Treasury Dept located at.

Sample size-40

27

13

0

5

10

15

20

25

30

Kolkata Outside Kolkata

Kolkata Outside Kolkata

Interpretation: In the Bar-graph it shows that most of the companies we have visited have

their treasury dept in Kolkata and investment is done from Kolkata.

41


42/51

N.B-Companies not having investable surpluses are not being considered for rest of the

analysis.

Table 1.4: Companies first preference to invest their funds in Area.

14

5

9

1

4

0

2

4

6

8

10

12

14

Mutual

Fund

Banks Shares Real

Estate

Others

Mutual Fund

Banks

Shares

Real Estate

Others

Sample size 33

Interpretation: In the Bar-graph it shows that majority of the companies love to invest in

Mutual Fund before investing in any other place.

Table 1.5: Market share of the investable amount a small and medium

enterprise can afford.

Sample size 33

11, 33%

13, 40%

7, 21%

2, 6%

Below 100000

Below 500000

Below 1000000

Above 1000000

42


43/51

Interpretation: In the Pie-chart it shows that enterprises mostly try to afford investment

below 500000 (40%) and avoid investing a huge amount.

Table 1.6: Market share of Enterprises preferred Investment Companies.

a)

Sample size 33

b)

Sample size 33

43

4

10

3

7

1

2

6

0 5 10 15

SBI Mutual Fund

UTI Mutual Fund

DBS Chola Mutual Fund

HDFC Mutual Fund

DSP Merrilynch

Sundaram BNP

Others

Others

Sundaram BNP

DSP Merrilynch

HDFC Mutual Fund


UTI Mutual Fund

SBI Mutual Fund

4, 12%

10, 31%

3, 9%

7, 21%

1, 3%

2, 6%

6, 18%SBI Mutual Fund

UTI Mutual Fund


HDFC Mutual Fund

DSP Merrilynch

Sundaram BNP

Others


44/51

Interpretation : In the above Pie-chart and Bar-graph it can be seen that the 31% of the

companies have invested in UTI Mutual Fund, whereas only 9% have shown faith in DBS

Cholamandalam like Traco Enterprise, Usha Martin Industries etc. So UTI rules most of the

market in investment sector.

Summary :-

From the above Bar-graphs and pie-charts we can find out several informations like

how many companies prefer to invest in Mutual Fund, enterprises having investable surplus,

enterprises running at O/D, Companies preference of investment etc.

We can draw a clear picture of the market condition and situation exists for Corporate

Investment.

44


45/51

CONCLUSION

The fact that money makes more money is unquestionable. But the money

should be parked in a proper option. According to the accuracy of the investor

regarding the selection of the investment and it different aspects like tenure,

option etc. the investor will be benefited. Those who will invest with a proper

planning will be benefited more. There are some investors whose objectives

have never fulfilled. Ultimately they thought that every investment alternative

is vogues. But it is not true. These types of investors have failed due to their

improper planning and wrong selection of alternatives at different point of time.

It is said earlier that this project does not consider all the investment avenues.

So, further project can be conducted considering those options also. Then the

preferred investment avenue of the investors will be clearer. At the same time it

is said that the Mutual Fund is a better investment option than others and the

reasons are explained earlier.

To conclude we must say that, we have learned a lot about the investment

pattern & the market condition existing. We have gathered a good knowledge

about when a company is ready to invest, when it has surplus funds with them

and the companies are not running at the Bank Overdraft etc.

We have got a good experience visiting several companies and speaking with

the high dignitary, senior executives present in the company. It was a very

bright and good learning process which would be helpful for me in my future.

45


46/51

RECOMMENDATION

Every study should have some recommendations. Without this the study can

not be fulfilled. So, like every study our studies also have some

recommendation like. It is recommended that the company should keep a track

on the Yield rates provided by other Mutual Fund Companies. Other mutual fund

companys higher percentage of yield rates can affect the company.

The company should also maintain a proper database because without a proper

database it becomes difficult to find out the requirement of the new and

existing customers. If the database is clearly made then it becomes much

easier to trace several existing and non-existing customers.

The company can have a thorough study about the opportunities and capitalize

them for companys betterment as a whole.

46


47/51

LIMITATIONS

Limitation to the research arose due to the paucity of time and the geographical

nature of the area visited. In some places the companies are situated in those

places which were difficult to identify. We were just able to visit 50 companies.

On few occasion the companies were closed or the concerned persons were not

present.

The data collected was collected by personal visits to the companies and direct

interaction with the company representatives and the authenticity of the data

collected depends on the information provided by them.

All the information given in this project is based on the survey which we

conducted in the geographical area within the time period of two months.

47


48/51

BIBLIOGRAPHY

1. Chandra P, Financial Management, Tata McGraw-Hill Publication, Seventh

Edition, 2008.

2. Bhalla V.K, Financial Management, Anmol Publications Pvt Ltd, Ninth

Edition, 2008.

3. Kothari C.R, Research Methodology, New Age International Publishers,

Revised Edition: 2008.

4. Malhotra N.k, Marketing Research, Pearson Prentice Hall Publishing Inc,

Fifth Edition, 2007.

5. www.google.com

6. www.msn.com

7. www.sebi.gov.in

8. www.cholamandalam.com

9. www.dbscholamandalam.com

48


49/51

ANNEXURE

QUESTIONNAIRE:-

Dear Sir / Madam,

I am a MBA student of IISWBM [CU] ,is conducting this survey, as a part of my project inMBA curriculum. I would be grateful if you could spare a few minutes to participate in it.

1. Nature of Business:

2. Do the company invest in Mutual Funds? ( ) Yes ( ) No

3. If YES then in which sector do they invest?

( ) Freedom Income Short Term Fund( ) Short Term Floating Rate Fund( ) Liquid Fund( ) Monthly Income Plan( ) Fixed Maturity Plan( ) Others

4. If NO then where the company invest their Funds?

( ) Equity

. ( ) Real Estate( ) Government Sector( ) Others

5. Whether the company has investable surplus? ( ) Yes ( ) No

6. Whether the company is running at O/D in bank? ( ) Yes ( ) No

7. Have they heard about DBS Chola AMC? ( ) Yes ( ) No

8. Is the company ready to invest there? ( ) Yes ( ) No

9. What facilities the company looks for before investing?

( ) Interest Rates ( ) Maturity Period ( ) Others

10. Have the company before invested in DBS Chola? ( ) Yes ( ) No

11. If YES what is the Feedback?

49


50/51

( ) Good ( ) Average ( ) Not satisfactory

12. Are they planning for future investment? ( ) Yes ( ) No

13. If YES when should we contact?

14. Whether the company is investing in any other organization? If YES what is theName?

15. Are they satisfied? ( ) Yes ( ) No

16. In which way they are investing?

( ) Debt ( ) Equity ( ) Others

17. Why?

18. What is the investable amount the company can afford?

( ) Below 1,00,000 ( ) Below 5,00,000( ) Below 10,00,000 ( ) 10,00,000 or Above

19. Where is Treasury Dept located?

( ) Kolkata ( ) W.B ( ) Outside W.B

Thank You very much for your cooperation.

Name of the Organization:

Phone Number :

Email :

Address :

Person Concerned :

Designation :

Date :

50


51/51

THANK YOU!!

Anirban Chakraborty Project Report

Documents

Transcript of Anirban Chakraborty Project Report