Systematic Investment plan for Low Income Population

CHAPTER – 1

INTRODUCTION

History of the Indian Mutual Fund Industry

The mutual fund industry in India started in 1963 with the formation of Unit

Trust of India, at the initiative of the Government of India and Reserve Bank of India.

The history of mutual funds in India can be broadly divided into four distinct phases:

First Phase – 1964-87

An Act of Parliament established Unit Trust of India (UTI) on 1963. It was set up by the

Reserve Bank of India and functioned under the Regulatory and administrative control of

the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial

Development Bank of India (IDBI) took over the regulatory and administrative control in

place of RBI. The first scheme launched by UTI was Unit Scheme in 1964. At the end

of 1988 UTI had Rs.6, 700 crores of assets under management.

Second Phase – 1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non- UTI, public sector mutual funds set up by public sector

banks and Life Insurance Corporation of India (LIC) and General Insurance

Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund

established in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab National

Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90),

Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989

while GIC had set up its mutual fund in December 1990.

At the end of 1993, the mutual fund industry had assets under management of Rs.47, 004

crores.

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Systematic Investment plan for Low Income Population

Third Phase – 1993-2003 (Entry of Private Sector Funds)

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund

industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the

year in which the first Mutual Fund Regulations came into being, under which all mutual

funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer

(now merged with Franklin Templeton) was the first private sector mutual fund

registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive

and revised Mutual Fund Regulations in 1996. The industry now functions under the

SEBI (Mutual Fund) Regulations 1996. The number of mutual fund houses went on

increasing, with many foreign mutual funds setting up funds in India and also the

industry has witnessed several mergers and acquisitions. As at the end of January 2003,

there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of

India with Rs.44, 541 crores of assets under management was way ahead of other mutual

funds.

Fourth Phase – since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was

bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust

of India with assets under management of Rs.29,835 crores as at the end of January 2003,

representing broadly, the assets of US 64 scheme, assured return and certain other

schemes.The Specified Undertaking of Unit Trust of India, functioning under an

administrator and under the rules framed by Government of India and does not come

under the purview of the Mutual Fund Regulations.

The second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC. It is

registered with SEBI and functions under the Mutual Fund Regulations. With the

bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of

assets under management and with the setting up of a UTI Mutual Fund, conforming to

the SEBI Mutual Fund Regulations, and with recent mergers taking place among

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Systematic Investment plan for Low Income Population

different private sector funds, the mutual fund industry has entered its current phase of

consolidation and growth.

The graph indicates the growth of assets over the years:

Ref- “amfindia.com”

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Systematic Investment plan for Low Income Population

CONCEPT OF MUTUAL FUND

A Mutual Fund is a trust that pools the savings of a number of investors who share a

common financial goal. The money thus collected is then invested in capital market

instruments such as shares, debentures and other securities. The income earned through

these investments and the capital appreciation realised are shared by its unit holders in

proportion to the number of units owned by them. Thus a Mutual Fund is the most

suitable investment for the common man as it offers an opportunity to invest in a

diversified, professionally managed basket of securities at a relatively low cost. The flow

chart below describes broadly the working of a mutual fund:

Advantages of Mutual Funds –

The advantages of investing in a Mutual Fund are:

Professional Management Diversification Convenient Administration Return Potential Low Costs Liquidity Transparency Flexibility Choice of schemes Tax benefits Well regulated

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Systematic Investment plan for Low Income Population

Risk Return Hierarchy of Different Funds-

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Systematic Investment plan for Low Income Population

CHAPTER – 2

COMPANY PROFILE

ABOUT RELIANCE ADAG GROUP LIMITED

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Systematic Investment plan for Low Income Population

Reliance Anil Dhirubhai Ambani Group (usually referred as Reliance Group and

legally Anil Dhirubhai Ambani Ventures Limited) is an Indian conglomerate,

headquartered in Navi Mumbai, India. The company, which was formed after Dhirubhai

Ambani's business empire was divided up, is headed by his younger son Anil Ambani.

[1] It has a market capitalisation of  89,000 crore(US$15 billion) and net assets worth 

180,000 crore (US$30 billion).[2] The Reliance Group has a business presence that

extends to over 20,000 towns and 450,000 villages in India, and across the globe. The

shareholder base is over 12 million, among the largest in the world. The group is present

in many sectors including Telecom, Capital, Power, Infrastructure, Entertainment and

Health.

Ambani Ventures Limited)

Type Private

Industry Conglomerate

Predecessor(s) Reliance Commercial Corporation

Founded 1966

Founder(s) Dhirubhai Ambani

Headquarters Dhirubhai Ambani Knowledge City, Navi

Mumbai, Mumbai Maharastra , India

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Systematic Investment plan for Low Income Population

Key people Anil Ambani

(Chairman)

Products Communications, infrastructure,financial

services,entertainment, power, natural

resource, petrochemical, healthcare, BPO

Revenue  US$15.4 billion (2012)

Operating

income

 US$2 billion (2012)

Profit  US$3.5 billion (2012)

Total assets  US$29 billion (2012)

Total equity  US$40 billion (2012)

Employees 120,000 (2012)

Subsidiaries Reliance Power, Reliance

Communications, Reliance

Infrastructure, Reliance Capital,Reliance

Entertainment, Reliance Health, Reliance Natural

Resources, Reliance Venture,Reliance

MediaWorks Ltd

Website relianceadagroup.com

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Systematic Investment plan for Low Income Population

Reliance Capital Ltd is a part of the Reliance - Anil DhirubhaiAmbani (ADA) Group,

and is ranked among the 25 most valuable private companies in India. Reliance Capital is

one of India's leading and fastest growing private sector financial services companies,

and ranks among the top 3 private sector financial services and banking groups, in terms

of net worth. Reliance Capital has interests in asset management and mutual funds, life

and general insurance, private equity and proprietary investments, stock broking,

depository services, distribution of financial products, consumer finance and other

activities in financial services. The Reliance ADA Group is one of India's top 2 business

houses, and has a market capitalization of over Rs.2,90,000 crore (US$ 75 billion), net

worth in excess of Rs.55,000 crore (US$ 14 billion), cash flows of Rs. 11,000 crore (US$

2.8 billion) and net profit of Rs. 7,700 crore (US$ 1.9 billion).

Reliance Money-

Reliance Money is a group company of Reliance Capital; one of India's leading and

fastest growing private sector financial services companies, ranking among the top 3

private sector financial services and banking companies, in terms of net worth. Reliance

Capital is a part of the Reliance ADA Group.

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Systematic Investment plan for Low Income Population

About Reliance Money in brief

Reliance Money is a part of the Reliance Anil DhirubhaiAmbani Group and is promoted

by Reliance capital. The fastest growing private sector financial services company in

India ranked amongst the 3 private sector financial companies in terms of net worth.

Reliance Money is a comprehensive financial solution provider that enables one to carry

out trading and investment activities in a secure, cost-effective and convenient manner.

Through Reliance Money, one can invest in a wide range of asset classes from Equity,

Equity and Commodity Derivatives, Mutual Funds, Insurance products, IPO’s to availing

services of Money transfer and Money changing. Reliance Money offers the

convenience of on-line and off-line transactions through a variety of means, including its,

portal, call & Transact, Transaction Kiosks and at its network of affiliates.

Some key steps of the company are…

“Success is a journey, not destination” if we look for examples to

prove this quote then we can find many but there is none like that of Reliance Money.

This company is today known as the largest financial service provider of India.

Success sutras of Reliance Money-

The success story of the company is driven by 9 success sutras adopted by in namely

Trust, Integrity, Dedication, commitment, Enterprise, Hard work, Home work, Team

work play , Learning and Innovation, Empathy and Humility and last but not least is it’s

Network.

Mission statement:

Mission of the company is to be a leading and preferred service provider to the

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Systematic Investment plan for Low Income Population

customers, and aims to achieve this leadership position by building an innovative,

enterprising and technology driven organization which will set the highest standards of

service and business ethics.

Vision of Reliance Money:

To achieve and in market leadership Reliance Money aimed for complete customer

satisfaction, by combining its human and technological resources, to provide world class

quality services. In the process Reliance Money strived to meet and exceed customer’s

satisfaction and set industry standards.

ORGANIZATION HIERARCHY

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RELIANCE MONEY (Head Office Mumbai)

(

BRANCH OFFICE

Cluster Head

Business DevelopmentExecutives

Centre Manager

Executives

Sales Promoters

Systematic Investment plan for Low Income Population

Reliance Mutual Fund

Reliance mutual fund (‘RMF”/’Mutual Fund’) is one of India’s leading Mutual Funds, with average Asset Under Management (AAUM) of Rs. 90,636 Crores and an investor count of over 58.42 and 64.53 Lakh folios.(AAUM and investor count as of Oct to Dec ’12). Source http://www.amfiindia.com/

Reliance Mutual Fund a part of Reliance Group, is one of the fastest growing mutual fund in India. RMF offer a investors a well-rounded portfolio of products to meet varying investors requirements and has presents in 179 cities across the country. Reliance Mutual funds constantly endeavors to launch innovative product and customer service initiatives to increase value to investors. Reliance Capital Assets Management Limited(‘RCAM’) is the manager of Reliance Mutual Fund RCAM is subsidiary of Reliance Capital Limited (RCL). Presently, RCL holds 65.23% of its total issued and paid up equity share capital and the balance of its issued and paid up equity share capital is held by other shareholder which include Nippon Life Insurance Company(‘NIL’), holding 26% of RCAM’s total issued and paid up equity share capital. NLI acquired the said 26 % share holding in RCAM on august 17 2012.

Reliance Capital Ltd. Is one of the india’s leading and fastest growing private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance Capital Ltd. has interest in asset management, life and general insurance , private equity and proprietary investments, stock broking and other financial services.

Sponsor Reliance Capital Limited

Trustee Reliance Capital Trustee Co. Limited

Investment Manager / AMC

Reliance Capital Assets Management Limited

Statutory Details The Sponsors, the Trustee and the investment Manager areincorporated under the Companies Act 1956.

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Systematic Investment plan for Low Income Population

Reliance Life Insurance:-

Few men in history have made as dramatic a contribution to their country’s economic fortunes as did the founder of Reliance, Shri. Dhirubhai Ambani. Fewer still have left behind a legacy that is more enduring and timeless.

As with all great pioneers, there is more than one unique way of describing the true genius of Dhirubhai. The corporate visionary, the unmatched strategist, the proud patriot, the leader of men, the architect of india’s capital markets, the champion of shareholder interest.

But the role Dhirubhai cherished most was perhaps that of India’s greatest wealth creator. In one lifetime, he built, starting from the proverbial scratch, India’s largest private sector enterprises.

When Dhirubhai embarked on his first business venture, he had a speed capital of barely U$$ 300(around 14,000). Over the next three and a half decades, he converted this fledgling enterprises into a 60,000 crore colossus- an achievement which earned Reliance a place on the global Fortune 500 list, the first ever Indian private company to do so.

Dhirubhai is widely regarded as the father of India’s capital market. In 1977, when reliance textile industries limited first went public, the Indian stock market was place patronized by a small club of elite investor which dabbled in a handful of stocks.Undaunted, Dhirubhia managed to convince a large number of first-time retail investor to participate in the unfolding Reliance story and put their hard-earned money in the Reliance Textile IPO, promising them, in exchange for their trust , substantial return on their investment. It was to be start of one of great stories of mutual respect and reciprocal gain in the Indian market.

Under Dhirubhai’s extraordinary vision and relationship, Reliance scripted one of the greatest stories in the corporate history anywhere in the world, and went on to became India’s largest private sector enterprises.

Through out this amazing journey, Dhirubhai always kept the interest of the ordinaryShareholder uppermost in the mind, in the process making millionaires out of many of the Reliance stock, and creating one of the world’s largest shareholder family.

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Systematic Investment plan for Low Income Population

Reliance Commercial Finance

The Reliance Group is among India’s top three private sector business houses on all major financial parameter, with assets in excess of Rs. 180,000 crore, and net worth to the tune of Rs. 89,000 crore.

Across different companies, the group has a customer base of over 100 million, the largest in India, and a shareholder base of over 12 million, among the largest in the world.

Through its product and services, the Reliance Group touches the life of 1 in 10 Indians every single day. It has business presence that extends to over 20000 towns and 4.5 lakhs villages in India , and 5 continents across the world.

The interest of the Group range from communication (Reliance Communication) and financial services (Reliance Capital Ltd), to generation, transmission and distribution of power(Reliance Energy), infrastructure and entertainment.

Reliance Commercial Finance is a member of the Reliance Capital family that provides an exhausted suite of financial solution. With operational presence across 66 location in India it proudly claims to be the fastest growing non-banking financial companies in India.

VISION:

To be the preferred and most profitable provider of assets based finance by 2013.

MISSION:

To benefit the share holders by

Providing need based loan solution that help in creating infrastructure and productassets.Maintaining high portfolio quality and profitability. Maintaining the high standards on values and ethics.

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Systematic Investment plan for Low Income Population

Reliance Capital Ltd

Reliance Capital is one of India’s leading private sector financial services, companies and ranks among the top 4 private sector financial services and banking groups, in terms of net worth.

Reliance Capital has interest in assets management and mutual funds; life and generalInsurance; commercial finance; equity and commodities broking; investment banking; wealth management services; distribution of financial product; exchanges; private equity; asset reconstruction; proprietary investment and other activities in the financial services.

Reliance Securities

Reliance Securities Limited is a Reliance Capital Company and a part of the RelianceGroup.

Reliance Securities endeavors to change the way investor transact in equities markets and avails services. It provides customer to access the Equity, Derivative, Mutual Funds & IPOs. It also offers secured online share trading platform and investment activities in secure, cost effective and convenience of trading offline through variety of means, including Call & Trade, Branch dealing Desk and its network of affiliates.

Reliance Securities has a pan India presence at more than 1,700 location.Reliance Capital is the one of India’s leading and fastest growing private sector financial services companies and rang among the top 3 private financial services and banking group, in terms of net worth.

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Systematic Investment plan for Low Income Population

Awards & Achievements

‘Most Admire Service Provider in Financial Sector’ by IPE BFSI, 2012.

‘India E-Retail Awards for Best Customer Experience Award’ by Franchise India,2012

‘My FM Start of the Industry 2012’ for excellence in online Demat (Broking Category

Reliance Securities Limited is now ISO 9001:2008 certified for online trading platform

‘Brand Leadership Legacy Award’ at the Asian Leadership Award- Dubai, 2011

‘My FM Stars of the Industry 2011’ for excellence in Online Demat / Broking

‘Largest E-Broking House 2010’ by Dun & Bradstreet

‘Largest E-Broking House & Best Equity Broking House for the year 2009’ by Dun & Bradstreet

‘Best in category Services Franchise’ at the 6th International Franchise & Retail show 2008

‘ Best E-Brokerage House 2008’(runner’s up) by Outlook Money NDTV Profit Awards

‘Debutant Franchisor of the Year’ a the 5th International Franchisee & Retail Show 2007

Reliance Securities has been rated no. 1 by Starcom Worldwide for online security and cost effectiveness in 2007

OUR MANAGEMENT TEAM

Reliance Securities is lead by a team of distinguished individual dedicated towards scaling theThe company to greater heights through innovative products and services that create valuefor our customer & stake holder.

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Systematic Investment plan for Low Income Population

Our management Team

Vikrant Gugnani – Executive directorSanjay Wadhwa – Chief Financial OfficerGanesh Pai – Head ComplianceHitesh Agrwal – Head Research PRESENCE & REACH

Corporate Office

Reliance Securities Ltd11th Floor, R-Tech Park, Nirlon Compound,Western Express Highway, Land Mark – Near Hub,Behind Oracle BuildingGoregaon(East), Mumbai – 400063MaharashtraBoard Line – 022 3320 121Fax – 022 3320 1555

Contact Center:

For any queries / request, write to us at:customer.support@resec.co.on

write to us at:

grievance@rsec.co.in for any grievances/complaints

About Us- Reliance General Insurance :

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Systematic Investment plan for Low Income Population

Reliance General Insurance is one of the leading private general insurance companies of India.We offer an exhausted and customized basket of insurance product that include motor, health,travel, student travel insurance etc with over 94 customized insurance product catering to the corporate, SME and individual customer. In our endeavor to delight our customer, we strive to come up with innovative product like India’s firstOver-The-Counter health & home insurance policies.

To pursue our belief in providing easy access to our customer and distributors, we have 152 offices spread across 119 cities in 24 states. Apart from this, we also provide easy access to our customer with our dedicated 24x7 call center, a transactional website, tie-ups through banks,channel partners and broker.

VISION:

To be an insure of World Standard and the most preferred choice for clientele at the domestic and global level.

MISSION:

Our mission is to keep the customer satisfaction as focal point of all our operations, adopt the best international practices in underwriting, claims and customer service, be the most innovative in product development, establish presence all over India, ensure sustained value addition to all stake holder and to uphold Corporate Value & Corporate Governance.

GOALS

. Make affordable insurance accessible to all

. Keep customer as focal point for all operations

. Product policy holders interests

. Adopt best international practices in claims, underwriting and policy servicing

. Be the most innovative in product development

. Establish Pan India presence

PERFORMANCE OF RELIANCE

WHERE RELIANCE STAND IN THE MARKET?

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Systematic Investment plan for Low Income Population

RELIANCE is a legendary name in financial services, Reliance credit is defined by its

mission to succeed, passion for professionalism, excellent work ethics and customer

centric values.

Today Reliance is well known as a premier financial services enterprise, offering a broad

spectrum of customized services to its clients, both corporate and retail. Services that

RELIANCE constantly upgrade and improve are because of company’s skill in

leveraging technology. Being one of the most techno-savvy organizations around helps

company to deliver even more cost effective financial solutions in the shortest possible

time.

What bears ample testimony to Reliance success is the faith reposed in company by

valued investors and customers, all across the country. Indeed, with Karvy’s wide

network touching every corner of the country, even the most remote investor can easily

access Karvy’s services and benefit from company’s expert advice.

Some key points about RELIANCE :

Every 50th Indian is serviced by Reliance

Every 20th trade in stock is done by Relaince

Indian’s no.1 registrar and transfer agent.

Every 6th investor in India invests through Reliance.

Every 10th Demat account is held at Reliance

RELIANCE PRODUCT & SERVICES

AN OVERVIEW

SERVICES OF RELIANCE -

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Systematic Investment plan for Low Income Population

Stock broking Demat services Investment product distribution Investment advisory services Corporate finance & Merchant banking Insurance Broking services Mutual fund services IT enabled services Registrars & Transfer agents Loans Reality services Portfolio management services BPO & KPO services Corporate advisor Currency derivatives Bonds and Deposits Depository services Commodities Investment Banking Advisory service

PRODUCTS

Equity-Reliance Money offers its clients competitively priced Equity broking, PMS and

Portfolio Advisory Services. Trading execution assistance provided to clients.

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Systematic Investment plan for Low Income Population

Mutual Funds- Reliance Money offers dedicated research & expert advice on Mutual

Funds.

Life-Insurance-Clients can choose from different plans of almost all Insurance

Companies where they can invest their money. A team of experts will suggest the best

Insurance scheme which suits the client’s requirement.

General Insurance-Reliance Money assists in areas of Health insurance, Travel

insurance, Home insurance and Motor insurance.

Commodities-Reliance Money is a single platform to trade on both the major

commodity exchanges i.e. NCDEX and MCX. In addition in-house research desk shall

provide research reports on all major commodities which shall enable in getting views for

trading and diversify client’s holdings. Trade Execution assistance is also provided to

clients.

Structured Products, Art Investments-Structured Products is a new class of financial

products for investors apprehensive of increased volatility in stock markets. Specially

designed products could include Equity, Index-linked in nature, Real Estate Funds, Art

Funds, Overseas Investments and Infrastructure Investments.

Tax Planning-Reliance Money’s wealth

management offerings include tax related services like:Tax Planning & advisory services

and filling Tax returns for individuals.

Real Estate Advisory Services-It providesBroking Model for lease/rent and buy/sell of

property,Property Valuation, Real-estate Consulting Corporate earning model,

etc.Offshore Investments-Reliance Money provides a unique opportunity to invest in

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Systematic Investment plan for Low Income Population

international financial markets through the online platform which includes different

product ranges.

Comprehensive     Policy   for   the   entire   family!

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Systematic Investment plan for Low Income Population

COMPETITORS OF KARVY

KOTAK SECURITIES:

Kotak securities ltd is India leading stock broking house with a market share of close to

9% as on 31 marches 2007. Kotak securities ltd has been the largest in IPO distribution.

The company has a full fledged research division involved in macro economic studies

sect oral research and company specific equity research combined with a strong and well

networked sales force which helps deliver current and up to date market information and

news

Kotak securities ltd is also a depository participant with national securities depository

limited and central depository service limited .providing dual benefits services where in

the investor can use the brokerage services of the company for executing the transactions

and the depository service for settling them.

Kotak securities have 813 outlets servicing more than 315000 customers and a coverage

of 277 cities. Kotak securities com the online division of kotak securities limited offers

internet broking services and also online IPO and mutual fund investment

A Kotak security limited manages assets around 2300 crores of assets under

management. The portfolio management service provides top class service catering to the

high end of the market. Portfolio management from kotak securities comes as an answer

to those who would like to grow from exponentially on the crest of the stock market, with

the backing of an expert.

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Systematic Investment plan for Low Income Population

SHAREKHAN

Sharekhan, the retail broking arm of SSKI group and one of the largest stock broking

house in the country has won the prestigious awaaz consumer vote awards 2005 for the

most preferred stock broking brand in India, in the investment advisors category

Share khan equity related services include trade execution on BSE,NSE derivatives

commodities depository services online trading and investment advice ,.sharekhan online

trading and investment site www.sharekhan.com was launched in 2000 . Sharekhan Bag

round network includes over 250 centers across 123 cities in India and having around

120000 customers and equal number of demat customers.

Sharekhan won the award by vote of customer around the country, as part of India largest

consumer study cover 7000 respondents 21 product and service across 21 major cities.

the study initiated by awaaz India first dedicated consumer channel and member of the

world wide CNBC network and ac Nielsen org marg was aimed at understanding the

brand preference of the consumer and to decipher what are the most important loyalty

criteria for the consumer in each vertical

In order to select the award recipient spontaneous responses rather than prompted

responses were garnered with an intention to glean unbiased preferences.

The reason behind the preferences for brands were unveiled by examines the following:

Tangible features of product /service

Softer, intangible features like imagery, equity driving preference

Tactical measures such as promotional /pricing schemes

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Systematic Investment plan for Low Income Population

INDIA INFOLINE

The India Infoline group, comprising the holding company, India Infoline Limited and its

wholly-owned subsidiaries, straddle the entire financial services space with offerings

ranging from Equity research, Equities and derivatives trading, Commodities trading,

Portfolio Management Services, Mutual Funds, Life Insurance, Fixed deposits, GoI

bonds and other small savings instruments to loan products and Investment banking.

India Infoline also owns and manages the websites http://www.indiainfoline.com/and

http://www.5paisa.com/

The company has a network of 758 business locations (branches and sub-brokers) spread

across 346 cities and towns. It has more than 800,000 customers

India Infoline Limited is listed on both the leading stock exchanges in India, viz. the

Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE) and is also a

member of both the exchanges. It is engaged in the businesses of Equities broking,

Wealth Advisory Services and Portfolio Management Services. It offers broking services

in the Cash and Derivatives segments of the NSE as well as the Cash segment of the

BSE. It is registered with NSDL as well as CDSL as a depository participant, providing a

one-stop solution for clients trading in the equities market. It has recently launched its

Investment banking and Institutional Broking business.

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Systematic Investment plan for Low Income Population

RELIGARE

Religare Enterprises Limited (REL), is one of the leading integrated financial services

groups of India. REL’s businesses are broadly clubbed across three key verticals, the

Retail, Institutional and Wealth spectrums, catering to a diverse and wide base of clients.

REL offers a multitude of investment options and a diverse bouquet of financial services

and has a pan India reach in more than 1550 locations across more than 460 cities and

towns.

As part of its recent initiatives, the group has also started expanding globally and has

acquired London’s oldest brokerage & investment firm, Hichens, Harrison & Co. plc.

Following this acquisition Religare now proposes to operate out of 10 countries. With a

view to expand, diversify and introduce offerings benchmarked against global best

practices, Religare has entered into joint ventures with the global major- Aegon for its

Asset Management and Life Insurance businesses in India.

Religare’s wealth management subsidiary is now rechristened as Religare Macquarie

Wealth Management Limited, following a joint venture with the Australia based financial

services major, Macquarie Bank. Religare has also partnered with Vistaar Entertainment

to launch India’s first Film Fund.

The vision is to build Religare as a globally trusted brand in the financial services domain

and present it as the ‘Investment Gateway of India’. All employees of the group guided

by an experienced and professional management team are committed to providing

financial care, backed by the core values of diligence and transparency.

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Systematic Investment plan for Low Income Population

INDIABULLS

Indiabulls is India’s leading Financial Services and Real Estate company having over 640

branches all over India. Indiabulls serves the financial needs of more than 4,50,000

customers with its wide range of financial services and products from securities,

derivatives trading, depositary services, research & advisory services, consumer secured

& unsecured credit, loan against shares and mortgage & housing finance. With around

4000 Relationship Managers, Indiabulls helps its clients to satisfy their customized

financial goals. Indiabulls through its group companies has entered Indian Real Estate

business in 2005. It is currently evaluating several large-scale projects worth several

hundred million dollars.

“Indiabulls Financial Services Ltd is listed on the National Stock Exchange, Bombay

Stock Exchange and Luxembourg Stock Exchange. The market capitalization of

Indiabulls is around USD 6,300 million (31st December, 2007). Consolidated net worth

of the group is around USD 905 million (31st December, 2007). Indiabulls and its group

companies have attracted more than USD 800 million of equity capital in Foreign Direct

Investment (FDI) since March 2000. Some of the large shareholders of Indiabulls are the

largest financial institutions of the world such as Fidelity Funds, Goldman Sachs, Merrill

Lynch, Morgan Stanley and Farallon Capital.

Business of the company has grown in leaps and bounds since its inception. Revenue of

the company grew at a CAGR of 159% from FY03 to FY07. During the same period,

profits of the company grew at a CAGR of 184%. Indiabulls became the first company to

bring FDI in Indian Real Estate through a JV with Farallon Capital Management LLC, a

respected US based investment firm. Indiabulls has demonstrated deep understanding and

commitment to Indian Real Estate market by winning competitive bids for landmark

properties in Mumbai and Delhi.”

Indiabulls Financial Services Ltd

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Systematic Investment plan for Low Income Population

ANGEL BROKING

The Angel Group of Companies was brought to life by Mr. Dinesh Thakkar. He ventured

into stock trading with an intention to raise capital for his own independent enterprise.

However, he recognized the opportunity offered by the stock market to serve individual

investors. Thus India’s first retail-focused stock-broking house was established in 1987.

Under his leadership, Angel became the first broking house to embrace new technology

for faster, more effective and affordable services to retail investors.

Mr. Thakkar is valued for his understanding of the economy and the stock-market. The

print and electronic media often seek his views on the market trend as well as investment

strategies.

Angel Broking's tryst with excellence in customer relations began in 1987. Today, Angel

has emerged as one of the most respected Stock-Broking and Wealth Management

Companies in India. With its unique retail-focused stock trading business model, Angel is

committed to providing ‘Real Value for Money’ to all its clients. The Angel Group is a

member of the Bombay Stock Exchange (BSE), National Stock Exchange (NSE) and the

two leading Commodity Exchanges in the country: NCDEX & MCX. Angel is also

registered as a Depository Participant with CDSL.

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Systematic Investment plan for Low Income Population

CHAPTER – III

SYSTEMETIC INVESTMENT PLAN (S.I.P.)

SIP is a method of investing a fixed sum, regularly, in a mutual fund. It is very similar to

regular saving schemes like a recurring deposit.

An SIP allows you to buy units on a given date each month, so that you can implement an

investment / saving plan for yourself. Once you have decided on the amount you want to

invest every month and the mutual fund scheme in which you want to invest, you can

either give post-dated cheques or ECS instruction, and the investment will be made

regularly. SIPs generally start at minimum amounts of Rs 1,000 per month and the upper

limit for using an ECS is Rs 25000 per instruction. Therefore, if you wish to invest Rs

100,000 per month, you may need to do it on 4 different dates.

HOW TO INVEST IN MUTUAL FUND

There are two ways in which you can invest in a mutual fund.

1. A one-time outright payment (LUMPSUM)

If you invest directly in the fund, you just hand over the cheque and you get your fund

units depending on the value of the units on that particular day. Let's say you want to

invest Rs 10,000. All you have to do is approach the fund and buy units worth Rs 10,000.

There will be one factor which determine how many units you get.

that is NAV.

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Systematic Investment plan for Low Income Population

NAV (Net Asset Value)

The Net Asset Value is the price of a unit of a fund. Let's say that the NAV on the day

you invest is Rs 50.

So you will get 200 units (Rs 10000 / 50).

2. Periodic investments (SIP)

This is referred to as a SIP. That means that, every month, you commit to investing,

say, Rs 1,000 in your fund. At the end of a year, you would have invested Rs 12,000 in

your fund. Let's say the NAV on the day you invest in the first month is Rs 20; you will

get 50 units. The next month, the NAV is Rs 25. You will get 40 units. The following

month, the NAV is Rs 18. You will get 55.56 units.

So, after three months, you would have 145.56 units. On an average, you would have

paid around Rs 21 per unit. This is because, when the NAV is high, you get fewer units

per Rs 1,000. When the NAV falls, you get more units per Rs 1,000.

Here are some Facts on the SIP

1. Is there a load?

An exit load is a fee you pay the fund when you sell the units, the funds never charged an

entry load on SIPs. An exit load is charged if you stop the SIP mid-way.

Which is 1%. Let's say you have a one-year SIP but discontinue after five months, and

then an exit load will be levied. These conditions will wary between mutual funds.  

2. What is the minimum investment?

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Systematic Investment plan for Low Income Population

If you do a one-time investment, the minimum amount that you have to invest is Rs

5,000.If you invest via an SIP, the amount drops. Each fund has their own minimum

amount. Some may keep it at least Rs 500 per month; others may keep it as Rs 1,000.

3. How often does one have to invest?

It would depend on the fund. Some insist the SIP must be done every month. Others give

you the option of investing once in three months or once in six months.They also give

fixed dates. So you will get the option of various dates and you will have to choose one.

Let's say you are presented with these dates: 1, 10, 20 or 30. You can pick any one date.

If you pick the 10th of the month, then on that day, the amount you have decided to invest

in the fund has to be credited to your mutual fund.

4. How must the payment be made?

You can opt for the Electronic Clearance Service [ECS] from your bank; this means the

mutual fund will, as per your instructions, debit a certain amount from your account

every month. Let’s say you have a SIP of Rs 1,000 every month and you have chosen to

invest in it on the 10th of every month. Under this option, you can instruct your mutual

fund to directly debit your bank account of Rs 1,000 on the due date.

If you don't have the required money in your account, then for that month, no units will

be allocated to you. But, if this continues periodically, the mutual fund will discontinue

the SIP. You need to check with each mutual fund what their parameters are.

Alternately, you can give cheques to your mutual fund. In this case, they may ask for five

Post Dated Cheques upfront with your first investment. Since these cheques are dated

ahead of time, they cannot be processed till the date indicated.

5. Must I state for how long I want the SIP?

Yes. You will have to state whether you want it for a year or two years, etc. If, during the

course of this period, you realize you cannot continue with the SIP, all you have to do is

31

Systematic Investment plan for Low Income Population

inform the fund 15 days prior to the payout. The SIP will be discontinued. You can

continue to keep your money with the fund and withdraw it when you want. 

6. Do all funds offer SIP?

No. Liquid funds, cash funds and floating rate debt funds do not offer an SIP. These are

funds that invest in very short-term fixed-return investments. Floating rate debt funds

invest in fixed return investments where the interest rate moves in tandem with interest

rates in the economy (just like a floating rate home loan).

All types of equity funds (funds that invest in the shares of companies), debt funds (funds

that invest in fixed-return investments) and balanced funds (funds that invest in both)

offer a SIP.

7. Tax implications

Let's say you have invested in the SIP option of a diversified equity fund.

If you sell the units after a year of buying, you pay no capital gains tax. If you sell if

before a year, you pay capital gains tax of 10%.

Let's say you invest through a SIP for 12 months: January to December 2005. Now, in

February 2006, you want to sell some units.

Will you be charged capital gains tax?

The system of first-in, first-out applies here. So, the amount you invest in January 2005

and the units you bought with that money, will be regarded as the units you sell in

February 2006. For tax purposes, the units that you sell first will be considered as the first

units bought.

8. How will an SIP help?

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Systematic Investment plan for Low Income Population

When you buy the units of a fund, you may do so when the NAV is really high. For

instance, let's say you bought the units of a fund when the bull run was at its peak,

leading to a high NAV. 

If the market dips after that, the value of your investments falls and you may have to wait

for a long while to make a return on your investment. But, if you invest via a SIP, you do

not commit the error of buying units when the market is at its peak. Since you are

buying small amounts continuously, your investment will average out over a period of

time.

You will end up buying some units at a high cost and some units a lower price. Over

time, your chances of making a profit are much higher when compared to an one-time

investment.

7 GOOD REASONS TO INVEST IN SYSTEMATIC INVESTMENT

PLAN

Power of compounding : The power of compounding underlines the essence of making

money work if only invested at an early age. The longer one delays in investing, the

greater the financial burden to meet desired goals. Saving a small sum of money

regularly at an early age makes money work with greater power of compounding with

significant impact on wealth accumulation.

Convenience : SIP can be operated by simply providing post dated cheques with the

completed enrolment form or give ECS instructions. The cheques can be banked on the

specified dates and the units credited into the investor's account. The SIP facility is

available in the Principal Income Fund, Monthly Income Plan, Child Benefit Fund,

Balanced Fund, Index Fund, Growth Fund, Equity fund and Tax Savings Fund.

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Systematic Investment plan for Low Income Population

It’s An Expert’s Field: The Fund Manager who are the expert in management of the

fund and have experience of 8-10 years manages Funds.

Putting Eggs In Different Baskets: The investments are done in diversified sectors,

which reduce the overall impact on the returns from a portfolio on account of a loss in

particular, company or sector.

It’s All Transparent And Well Regulated: The Mutual Fund Industry is well regulated

both by SEBI and AMFI.

Rupee Cost Averaging : Timing the market consistency is a difficult task. Rupee cost

averaging is an automatic market timing mechanism that eliminates the need to time

one's investments. Here one need not worry about where share prices or interest are

headed as investment of a regular sum is done at regular intervals; with fewer units being

bought in a declining market and more units in a rising market. Although SIP does not

guarantee profit, it can go a long way in minimizing the effects of investing in volatile

markets.

Rupee Cost Averaging is an effective market-timer mechanism that eliminates the need to

time the markets. All one has to do is to invest a fixed, pre-decided amount of money on

a regular basis over a long period of time. Since the amount invested per month is

constant, one buys more units when the price is low and fewer units when the price

is high. As a result the average unit cost will always be less than the average sale price

per unit, irrespective of the market rising, falling or fluctuating.

Let's take an example of Mr. X, wherein he started investing Rs. 4,000 every month in

the Maximiser Fund of the Lifetime Super Plan.

34

Systematic Investment plan for Low Income Population

The table related to this is given in next page:

 PeriodInvested

Premium (Rs.)

NAV of Maximiser Fund

(Rs. Per unit)

Units

allocated

7th Apr

'03 4,000 11.34 352.73

7th May

'03 4,000 11.01 363.31

9th Jun

'03  4,000 12.05 331.95

7th Jul

'03  4,000 13.13 304.65

7th Aug

'03 4,000 13.67 292.61

8th Set

'03  4,000 15.81 253.00

7th Oct

'03 4,000 16.78 238.38

7th Nov

'03 4,000 18.28 218.82

8th Dec

'03  4,000 18.71 213.79

7th Jan

'04  4,000 21.48 186.22

S9th Feb

'04 4,000 21.49 186.13

8th Mar

'04 4,000 21.98 181.98

Total 48,000    

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Systematic Investment plan for Low Income Population

Actual Average NAV = (11.34 + 11.01 + 12.05 + 13.13 + 13.67 + 15.81 + 16.78 + 18.28

+ 18.71 + 21.48 + 21.49 + 21.77) / 12 = Rs.16.29.

 

 NAV for Mr. X = (4,000 * 12) / (352.73 + 363.31 + 331.95 + 304.65 + 292.61 + 253.00

+ 238.38 + 218.82 + 213.79 + 186.22 + 186.13 + 183.74) = Rs.15.36 

 

 Based on the historical analysis for BSE Sensex for last ten years (1-Jan-1994 to 1-Jan-

2004) we find that if an individual had invested Rs. 1000 ever year (SIP) he would have

earned a return of 9% vis-à-vis 5% earned by an individual who had invested Rs. 1000 at

the beginning of 10 year period. Similarly over a five-year period (1-Jan-1994 to 1-Jan-

1999) SIP investment return would have been 16.52% compared to 14.09% for a one-

time investment at the beginning of the period.

 

Thus Rupee Cost Averaging smoothens out the market ups and downs and reduces

the risk of investing in volatile markets. However, rupee cost averaging does not

guarantee a profit, as this depends on the performance of the market.

Does Not Strain Our Day-to-Day Finances: It allows us to invest very small amounts

(Rs. 500 – Rs. 1000). As against the larger one time investment, which makes easier to

the investor?

Top 5 mutual fund in various categories

Equity Diversified Rating AUM (Rs. cr.)Mar 11

NAV (Rs./Unit)

1yr 2yr 3yr

Birla SL India GenNext (G)  84.38 26.28 16.2 30.0 19.9

HDFC MidCap Opportunities

(G) 1,152.26 16.53 13.4 38.1 24.8

Birla SL Dividend Yield (G)  771.61 86.80 6.9 31.4 27.9

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Systematic Investment plan for Low Income Population

SBI Magnum Emerging Busi

(G) 292.22 43.88 17.3 35.6 17.9

DSP-BR Micro Cap Fund - RP

(G) 438.42 15.66 -2.4 36.1 20.9

Equity Tax Saving Rating AUM (Rs. cr.)Mar 11

NAV (Rs./Unit)

1yr 2yr 3yr

Axis Tax Saver Fund (G) 73.28 12.92 11.9 -- --

ICICI Pru Tax Plan (G)  1,251.56 142.85 6.1 31.5 18.4

Religare Tax Plan (G)  102.10 18.15 7.7 27.5 21.7

HDFC Tax Saver (G)  2,823.02 237.70 7.5 29.0 22.1

Can Robeco Eqty TaxSaver (G)

243.82 26.52 5.3 26.2 24.3

Balanced Rating AUM (Rs. cr.)Mar 11

NAV (Rs./Unit)

1yr 2yr 3yr

HDFC Childrens Gift (Inv)  265.89 45.03 19.6 31.5 21.7

HDFC Balanced Fund (G)  238.78 58.17 13.2 28.7 22.3

HDFC Prudence Fund (G)  5,808.18 218.66 9.9 29.1 24.2

ICICI Pru Balanced Fund (G)  263.95 48.20 12.6 21.0 13.2

ICICI Pru E & D-Volatility Adv.

(G) 189.33 14.49 10.8 18.8 13.4

Monthly Income Plan Rating AUM (Rs. cr.)

Mar 11

NAV (Rs./Unit)

1yr 2yr 3yr

HDFC MIP - LTP (G)  10,099.87 23.49 7.4 12.0 14.6

Can Robeco MIP (G) 363.75 30.11 6.4 9.0 12.2

Reliance MIP (G)  8,393.45 22.04 5.8 11.1 15.4

ICICI Pru MIP (G)  1,003.34 26.34 6.7 7.5 9.6

Birla SL MIP II-Savings 5 818.38 17.94 6.7 6.6 11.0

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Systematic Investment plan for Low Income Population

(G) 

Money Market Rating AUM (Rs. cr.)

Mar 11

NAV (Rs./Unit)

1yr 2yr 3yr

SBI Magnum Cash-Liq Float -

G 92.44 17.33 7.9 6.0 6.6

IDFC Liquid Fund (G)  966.281,416.3

87.8 6.2 6.1

JM High Liquidity (G) 70.09 27.39 7.7 6.0 6.6

HDFC Cash Mgmt - SP (G)  3,977.71 20.97 7.5 6.0 6.6

Reliance Money Mgr-RP (G)  1,912.591,355.1

87.4 6.1 6.7

Debt - Short Term Rating AUM (Rs. cr.)

Mar 11

NAV (Rs./Unit)

1yr 2yr 3yr

Templeton (I) ST Income (G)  3,727.502,004.3

46.4 7.2 9.5

Birla SL Short Term Opp-RP

(G) 79.76 15.70 8.3 7.1 7.8

Taurus Short Term Income (G) 54.631,715.6

08.5 5.9 4.6

UTI Short Term Income - RP

(G) 310.01 17.17 7.6 6.6 8.1

IDFC Ultra Short Term Fund

(G) 623.57 13.85 8.3 6.3 6.1

Debt - Long Term Rating AUM (Rs. cr.)

Mar 11

NAV (Rs./Unit)

1yr 2yr 3yr

UTI Bond Fund (G)  382.79 29.04 6.9 6.0 7.7

Templeton India IBA (G)  70.78 33.08 6.8 5.9 7.5

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Systematic Investment plan for Low Income Population

ICICI Pru Flexi Inc -Prem (G)  10,142.62 187.28 7.8 6.4 7.0

Reliance Medium Term Fund

(G) 1,955.52 20.84 7.7 6.3 6.9

Birla Sun Life GSec - LTF (G)  518.05 28.77 5.1 8.3 12.8

Debt - Floating Rate Rating AUM (Rs. cr.)

Mar 11

NAV (Rs./Unit)

1yr 2yr 3yr

Can Robeco Float Rate-STP (G)

234.18 15.60 8.2 6.4 7.1

HDFC Float Rate Inc-LTP

(G) 1,510.78 17.33 7.8 6.8 7.9

Birla SL FRF - LTP - RP (G)  162.00 17.24 7.7 7.4 7.8

Tata Floater Fund (G)  5,898.74 15.02 7.9 6.4 7.0

Reliance Floating Rate (G)  461.74 15.83 7.7 6.2 6.9

Ref- http://www.moneycontrol.com/mutual-funds/best-funds/annualised-returns

39

Systematic Investment plan for Low Income Population

RISKS IN SYSTEMATIC INVESTMENT PLAN

In this competitive world the risk is common in almost all the business. The basic

objective of a mutual fund is to provide a diversified portfolio so as to reduce the risk in

investments at a low cost. Investors who take up mutual fund route for investments

believe that their risk is minimized at low costs, and they get an optimum portfolio of

securities that match their risk appetite. A mutual fund investor is exposed to a variety of

risks. Among these, there are four major ones:

Market Risk:

It refers to the extent to which fluctuations in the return are caused by broad market

factors.

Regulatory Risk:

It is the result of unexpected changes in the regulation.

Industry Risk :

The returns of a particular scheme may be adversely affected by the poor performance of

a particular sector.

Company Risk:

If a particular fund scheme has made substantial investments in the stocks of a particular company; risks may arise as a result of below par performance of that particular

company.

40

Systematic Investment plan for Low Income Population

CHAPTER – IV

LITERATURE REVIEW

Mutual fund industry must attract low-income groups: RBI Dy Gov Chakrabarty

Mumbai: The Reserve Bank of India (RBI) wants the mutual fund industry to introduce

innovative schemes for attracting savings of low-income groups, particularly in the rural

areas of the country, Deputy Governor of RBI KC Chakrabarty said.

“Role of mutual funds in promoting saving at this point continues to be insignificant in

India. Attracting low-income groups is the only way to ensure participation of all

categories (of investors) in the financial market as mutual funds clearly have a role in

financial development,” Chakrabarty said while speaking at the 9th Mutual Fund Summit

of Confederation of Indian Industry (CII) earlier Wednesday.

Mutual funds have played a crucial role in broadening the money market and to a certain

extent the Government Securities (GILT) market as well, Chakrabarty said. GILT funds

have however, recorded only a moderate growth, he added.

The relationship between banks and mutual funds has also been of concern to the RBI, he

said. To address the issue, the central bank on May 3 had decided that banks’ investment

in debt oriented mutual funds be capped at 10% of their net worth.

REF- http://banking.contify.com/story/mf-industry-must-attract-low-income-groups-rbi-dy-govChakrabarty

41

Systematic Investment plan for Low Income Population

CHAPTER – V

RESEARCH METHODOLOGY

OBJECTIVE OF THE STUDY

The purpose of choosing this project is to know:

The main objective of this project is concerned with getting the

opinion of people regarding mutual funds.

Better option for entry into a Mutual Fund.

a) Lump sum

b) SIP

People Reaction towards Mutual Fund Industry.

Investors Delight when investment is through SIP.

Procedure for investment in SIP.

Can lower income Strata of our society be benefited with the

Systematic Investment Plans.

42

Systematic Investment plan for Low Income Population

SCOPE OF THE STUDY

Since the summer internship training is done in Varanasi, so the universe taken is from

Varanasi only.

This project will help existing/prospective investor to understand what are the various

mode of investment in Mutual Fund and why Systematic Investment Plan gives better

returns than Lump sum. So that investors can do better use of their hard earned money to

earn more profit.

TYPES OF DATA

There are two types of data:

1. Primary Data

2. Secondary Data

Primary Data is that data which is collected by the researcher as per his/her needs.

Secondary Data is that data which is collected through references as websites, journals,

books, newspapers, magazines etc.

SOURCES OF DATA COLLECTION

The data for research is collected in two ways: -

Primary source

Secondary source

Primary Data is collected through interviewing the investors directly.

Secondary data which is used just for reference is collected through magazines and

Fact sheets of the Mutual Fund Companies.

43

Systematic Investment plan for Low Income Population

RESEARCH DESIGN

This research is Descriptive and conclusive in nature because it aims to collect the data

about the behavior of investors in which way they invest in Mutual Funds. The research

approach used is survey based and the analysis is largely based on the primary data.

RESEARCH INSTRUMENT

Interview.

CONTACT METHOD

Personal interview

RESEARCH APPROACH

Any methodology includes the overall research design, the sampling procedure and data

collection method. The methodology adopted by me for purpose of finding the

investment behavior of investors was DIRECT IINTERVIEW METHOD.

RESEARCH TYPE

Conclusive and descriptive approach has been adopted in the study. As here the topic of

research problem has been explored so that hidden facts can come into the light and then

the final conclusion is given.

POPULATION

Varanasi City

44

Systematic Investment plan for Low Income Population

SAMPLE SIZE

A sample size of 50 investors was chosen to meet the earlier mentioned objectives. The

selection of sample was based on the following criteria: -

People belonging to lower income group.

Demographic Profile Of Target Respondents

Age - 18 years to 35 years

Income - People who are free from Tax (as in Tax Slab)

(General – Rs. 1, 80,000

Women - Rs.1, 90,000

Senior Citizen - Rs. 2, 50,000)

These Respondents comes under lower Income Populations as per my

objectives and analysis.

Ref - http://financeminister.in/latest-india-income-tax-slabs

45

Systematic Investment plan for Low Income Population

CHAPTER – VI

ANALYSIS & FINDINGS

ANALYSIS

The analysis is done on the basis of the response of respondents, which is collected

through the interview

Q 1: You Gender?

Gender Value (in %)

Male 50

Female 50

Q 2: Marital Status?

Gender Value (in %)

Married 75

Single 25

46

Systematic Investment plan for Low Income Population

Q 3: Have you invested /are you interested to invest in Mutual Funds?

Ans:

Replies Values (in %)Yes 27No 26Depends on Market Situations 7May be in Future 40

Interpretation: From above pie chart, I have analysed that in the among the Small

Income Population, there are many who are interested in Investment. But the main

noticable point are 40% of the population I interviewed have the possibilities to invest in

Future.

47

Systematic Investment plan for Low Income Population

Q 4: What is the most important reason for not investing in Mutual Funds?

Ans:

Reason on Not Investing in MF Values (in %)High Risk 14No knowledge 50Don’t Believe in Private Companies 18Had suffered loss earlier 18

Interpretation: The above pie chart depicts that 50% of the Population I interviewed,

have no knowledge about the Mutual Fund so this is the main reason of people not

interested much in investing in Mutual Funds. 18% are those Traditional people who

48

Systematic Investment plan for Low Income Population

thinks, relying on Public sector company are far better than others private sector.18% of

the population have suffered loss earlier and thus have no capacity to take further risk.

Q 5: What attracts you more Mutual Fund as a lump sum or SIP?

Ans:

Replies Values (in %)

Lump Sum 16

SIP 84

Interpretation: We can interpret that the Small section of society are Bigger in number,

and through the Graph can be seen that 84% of the population I interviewed are more

interested towards SIP. Thus there is a huge Market of SIP’s in Varanasi City.

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Systematic Investment plan for Low Income Population

Q 6: Of what amount of monthly installment you are willing to start a SIP?

Ans:

Reply Values (In %)

Rs.500 64

Rs.1000 26

Rs. > 1000 10

Interpretation: Middle Section of the society can easily give 500 Rs. Per month from

their pocket and don’t think as a burden.. However there are few more people who think

50

Systematic Investment plan for Low Income Population

investing in Mutual Funds are far more Lucratice, thus can invest Rs. 1000 or more in a

month.

Q 7: According to you which are the most suitable stage to invest in mutual funds?

Ans:

Replies Values (in %)

Young unmarried stage 24

Young Married with children stage 44

Married with older children stage 20

Pre retirement stage 12

Interpretation: It can be interpreted that, People who are married with young children,

invests much in Mutual Funds and othere Investments.

Values (in %)

Young unmarried stage24%

Young Married with children stage

44%

Married with older children stage

20%

Pre retirement stage12%

Young unmarried stage Young Married with children stage

Married with older children stage Pre retirement stage

51

Systematic Investment plan for Low Income Population

Q 8: What is time duration of investment?

Ans.

Time Duration Values (in %)

Less than equal to 5 years 24

Less than equal to 3 years 62

Less than equal to 1 years 14

Interpretation: As we all know, Investing money Via SIP gives good return only if we

invest for a long period of time. Thus, for more profitable return and for future

complexities, People generally invest for minimum 3 years.

52

Systematic Investment plan for Low Income Population

Q 9: Are you satisfied with the facilities provided by RELIANCE?

Ans:

Satisfaction Level with RELANCE Responses of Investors

Yes 65%

No 35%

Interpretation: Reliance are providing better financial advices and services to their

existing clients. However as the interest in Mutual Fund in Small sectors are gradually

rising, Reliance should take consider of these upcoming section of society too.

53

Systematic Investment plan for Low Income Population

FINDINGS

The analysis is done based on the interview and we got following points:

Lower Income populations are now more attracted toward the SIP.

They can bear some risk for getting profits higher than the Bank Interests and

Fixed Deposits.

However, they need some genuine agent on whom they can rely on as lack of

knowledge exists in these populations.

Since maximum of the people are investing minimum for tenure of 3 years. So

there are chances that the Market will go up in next 3 years and people may get

good returns against investment.

People can easily give 500 Rs SIP initially, and if they get better returns in future,

there might be possibilities that they will invest further in it.

Small section of the society is large in numbers. So if small amount are invested

by them, Company gets much money in Bulk to invests and provide better

returns.

Out of 50 people on whom I interviewed, 32 people started the investment.

However, there exist fear in every person, that Private companies are non reliable

and can run away anytime. So people shift them selves to invest in Public Sectors

like LIC and Banks.

54

Systematic Investment plan for Low Income Population

CHAPTER – VII

CONCLUSION

After Completing Summer Internship in Reliance Securities Limited, I would like to

conclude my training and report as-

My Internship was of Hardcore Product Selling. I was placed in Marketing Department

with Financial Advisors. Every week there was a SIP Login day, on which we have to file

all the products we have sold to the customers. I was under my Branch Head. But the task

was supervised by the Financial Advisor, Mr. Rajesh Pandey

As a summer Trainee, I didn’t get any targets to achieve, but the pressure continues

reaching us through our supervisors. In initial stages of my training, I was told to read

and understand all the basics and keywords of Mutual fund and Financial Industry. And

from the next week I was supposed to deal clients. Initially I felt trouble dealing with the

clients as I was having fear of knowing less then the customers. The cross question asked

by the customer’s created trouble for me. However, I asked my supervisor for giving me

the ideas for responding to customers at there questions. This gradually worked for me.

It was overall a strong and positive Learning and business experience for me. When I

went to some clients who were not very good in their financial standings, they asked

some actual and reliable platform to invest so as to protect their upcoming future. This

gave me a way to think and lead my project into this way. After meeting few more

customers of the same category, I got an idea of their thoughts and the need. They

actually wants to invest in these Mutual Fund Industries, but the problems like, Lack of

knowledge, Non Reliable Agents, Non Reliable Private companies are making them to

divert their mind to opt for Banks and Recurring Deposits.

55

Systematic Investment plan for Low Income Population

Thus I think, there are lots of opportunities in Lower Income Strata of the Society, which

are hidden till now. And Reliance and all the Mutual Fund Companies should take

initiatives to help them and make them possible to build there own future they dreamt of.

Other Conclusion as per the Survey are-

Lower Income Population is attracted toward SIP that also, mostly of monthly

amount to Rs. 500.

Mutual Funds have given a new direction to the flow of personal saving and

enable small and medium investors in remote rural and semi urban areas to reap

the benefits of the stock market investment. Indian Mutual Funds are thus playing

a very important developmental role in allocation of scares resources in the

emerging economy.

SIP gives far better results than investing in Lump sum.

Reliance is not able to provide sufficient services to the investors due to

unawareness among advisors regarding services.

The awareness level of investor is low in advisors are interested in dealing in

mutual fund.

Small section is ready to give try in investing in Mutual Funds starting in a small

amount of Rs. 500 a month.

56

Systematic Investment plan for Low Income Population

Swot Analysis Of Reliance Capital Limited

Strength :

A well-known name in Financial

Companies.

Wide Experience in this field.

Dedicated Employees.

Tie up with many financial

institutions.

Ever growing distribution network.

Good Infrastructure.

Experienced Fund Managers.

Easy access to the branch.

Weakness :

No access to rural market.

No direct link between investors &

the AMC.

Opportunity :

Positive outlook of people towards

mutual funds.

Untapped market.

Threat :

Highly volatile and uncertain

market conditions.

Large number of financial giants

present in this field.

.

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Systematic Investment plan for Low Income Population

CHAPTER – VIII

RECOMMENDATION AND SUGGESTIONS:

Though the Reliance Securities Limited have a very good ascribed plan with exclusive

band of opportunities but as nothing is free from the hurdles therefore there are few

shortcomings which I felt makes Reliance fail to achieve its target.

.

There is high potential market for Mutual Fund Advisors in Varanasi city, but this

market needs to be explored as investors are still hesitated to invest their money in

Mutual Funds.

In Varanasi Lower Income Investors have inadequate knowledge about Mutual

Funds, So proper Marketing of various schemes is required, company should

arranges more and more seminars on Mutual Funds.

Awareness of MF services among the Lower Income Investors are very low so

Asset Management company needs proper marketing of their all services by

advertising, distribution of pamphlet, arranging seminars etc.

Company should also provide knowledge about the growth rate and the expected

growth rate of Mutual Fund industry in India.

RELIANCE CAN INDULGE IN A CSR ACTIVITY by spreading awareness

about Savings and promoting SIP.

Reliance should promote some Campaign for these Small Income Section of the Society and aware them to start saving today and invest it in the form of Sip for there futures.

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Systematic Investment plan for Low Income Population

CHAPTER - IX

LIMITATIONS TO THE SURVEY

Though research based decision-making is now considered but still there is gap between

the understanding of researcher and users.

Research is there to help in decision-making, not a substitute of decision-making. Some

of the following limitations have restricted the scope of survey to some extent:

Some respondents gave vague information and were not serious while responding.

Some respondents were hesitant to reveal information about them, as they don’t

trust the private companies.

It was difficult to find whether respondents actually participate in their financial

planning.

Research can provide no. Of facts but it does not provide actionable results.

Management rely more on the intuitions and judgment rather than research.

Area of research was restricted to some locations of the city.

MUTUAL FUNDS ARE SUBJECT TO MARKET RISK.

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Systematic Investment plan for Low Income Population

CHAPTER - X

BIBLIOGRAPHY

Websites:

www.rcap.com

www.indiacorporateadvisor.com

www.amfiindia.com

www.moneycontrol.com

Books Referred: -

“Malhotra, Naresh K. (2010) Marketing Research an Applied Orientation

(6th Edition).”

Magazines & Journals Referred: -

Business Today

ICICI Prudential AMC’s Fact sheet-“THE PRUDENT” .

Fact Sheets of All Mutual Fund Companies.

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Systematic Investment plan for Low Income Population

CHAPTER - XI

ANNEXURE

General Question in the interview session

Have you invested /are you interested to invest in Mutual Funds?

What is the most important reason for not investing in Mutual Funds?

Where do you find yourself as a Mutual Fund investor?

What attracts you more Mutual Fund as a lump sum or SIP?

Where from you purchase Mutual Funds?

Of what amount of monthly installment you are willing to start a SIP?

Which feature of the mutual funds allure you most?

According to you which are the most suitable stage to invest in mutual

funds?

Are you availing the services of personal financial advisors?

Which expertise of the personal financial advisor is demanded most?

What is the major reason for using financial advisors (agents)?

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