Preference among advisors towards mutual fund at KARVY STOCK BROKING LTD

A PROJECT REPORT

ON

A STUDY ON PREFERENCE OF THE ADVISORS TOWARDS

MUTUAL FUND

AT

KARVY STOCK BROKING LTD. ALLAHABAD

SUBMITED BY

Prashant Joshi

Under the guidance of

“Mrs Archana A Borde”

SUBMITTED TO

UNIVERSITY OF PUNE

In partial fulfillment of the requirement for the award of the degree of Masters in

Marketing Management(MMM)

Through

INSTITUTE OF BUSINESS MANAGEMENT & RESEARCH, CHINCHWAD

PUNE, 411019

ACEDAMIC YEAR

2009-11

Institute of Business Management & Research, Chinchwad, Pune Page i

ACKNOWLEDGEMENT

I am really happy and exited in representing this summer training project report before you.

I must express my gratitude towards KARVY STOCK BROKING LTD for giving me an opportunity to work with on this report.

My sincere gratitude to Mr Abhinav Prasad. (Head, northern region,[Distribution]

karvy) and Dr. Asha Panchpande (Director, IBMR, chinchawad, Pune), for providing

me with an opportunity to work with karvy stock broking limited.

I am highly indebted to Mr. Varun Pandey, product head ( Distribution), Karvy Stock

Broking Ltd. Allahabad also my company project guide, who has provided me with the

necessary information and his valuable suggestion and comments on bringing out this

report in the best possible way.

I also thank Madam Archana Borde, Project guide, IBMR, chinchwad, Pune who has

sincerely supported me with the valuable insights into the completion of this project.

I am grateful to Mr. Naval Agarwal (branch co-ordinator, Karvy, Allahabad) and all of

the members of Civil Lines branch, who have helped me in the successful completion of

this project, special mention of Mr. Anil Agarwal, Mr. Dinesh, Mr Manish , Mr.Neeraj,

and Mr Mukesh, They have also provided me a valuable suggestions and excellence

guidance about this training, which proved very helpful to me to utilize my theoretical

knowledge in practical field.

Last but not the least my heartfelt love for my parents, whose constant support and

blessings helped me throughout this project. I am also grateful to my friends, to all known

and unknown individuals who have given me their constructive advise, educative

suggestion, encouragement, co-operation and motivation to prepare this report.

DECLARATION

Institute of Business Management & Research, Chinchwad, Pune Page ii

I Prashant Joshi, student of MMM (2009-11) studying at “Institute of Business

Management and Research”, Chinchwad, Pune. Formally declare that the project work

titled “A STUDY ON PREFERENCE AMONG ADVISORS TOWARDS MUTUAL

FUND” was carried out by me at Karvy Stock Broking Ltd, in partial fulfillment of

requirement for the award of the degree of Master’s in Marketing Management under

University of Pune.

This project was under taken as a part of academic curriculum according to the

University of Pune, by its Rules and Regulation.

Date:Place: Pune Prashant Joshi

Executive summary

Institute of Business Management & Research, Chinchwad, Pune Page iii

According to the curriculum of University of Pune, we are required to do summer training

for two months in any company to get the practical knowledge of corporate world. This

project has been a great learning experience for me at the same time it gave me enough

scope to implement my analytical ability. This project as a whole can be summarized as

below.

Project title:-

The title of the project is “A STUDY ON PREFERENCE OF THE ADVISORS

TOWARDS MUTUAL FUND”

Objective:-

The objective of the project is to find out the preferences among financial advisiors

towards mutual fund investment. It also objects the preferences of advisors towards

KARVY

Scope:-

This project has a lot of scope. It will help the organization in many ways. An

organization may know, what are the preferences of their advisors and business associates

so they can work on that accordingly.

Research methodology:-

This project work is limited to the city Allahabad. The data provided by the organization

was 300 but out of that100 samples were randomly selected therefore the sample size is

100.

Findings:-

The findings of the research are:-

- The awareness among advisors is much more than as it was expected.

- The reason for not dealing in mutual funds is pay out factor.

- The advisors are having shortage of time to attend seminars.

Limitations:-

Institute of Business Management & Research, Chinchwad, Pune Page iv

The limitations of the research are:-

- The research is limited to the city Allahabad.

- Sample size was only 100 as, many of them were sub-brokers/business

associates of karvy and they are limited in number.

- The research process was a bit expensive and it was beared by me.

- Working of the office was also affecting research.

Conclusion:-

The conclusion is as follows.

- Due to higher returns & preferences of investors, the advisors are selling

mutual fund, but due to low pay out factor the preferences of advisors are

changing.

- KARVY Allahabad is not able to provide services as expected, due to lack of

staff.

- The awareness level among advisors is quite high.

Recommendation:-

Therefore it is recommended than, awareness of MF services provided by Karvy is also

quite high, but service part is lagging, so company needs proper marketing of their all

services by distribution of forms, collection of forms, arranging seminars etc.

TABLE OF CONTENTS

Institute of Business Management & Research, Chinchwad, Pune Page v

SR.NO CONTENTS PAGE NO

1 INTRODUCTION 1-2

2 ORGANIZATION PROFILE 3-18

3 INDUSTRY PROFILE 19-45

4 SCOPE OF WORK 46-47

5 OBJECTIVES 48-50

6 RESEARCH METHODOLOGY 51-56

7 DATA COLLECTION & ANALYSIS 57-72

8 FINDINGS 73-74

9 LIMITATIONS 75-76

10 RECOMMENDATIONS 77-78

11 CONCLUSIONS 79-80

12 BIBLIOGRAPHY 81

13 ANNEXURE 82-85

LIST OF TABLESLIST OF TABLES

TABLE TOPIC PAGE NO.

Institute of Business Management & Research, Chinchwad, Pune Page vi

NO.

7.3.1 Age 59

7.3.2 Gender 59

7.3.3 Education 60

7.3.4 AMFI Certified 61

7.3.5 Investment option 62

7.3.6 Preferred Product 63

7.3.7 No. of customer 64

7.3.8 Payment period 65

7.3.9 Satisfaction level for Payment period 65

7.3.10 Tax saving investment 66

7.3.11 Favorite AMC 67

7.3.12 No entry load 68

7.3.13 Advisor of KARVY 69

7.3.14 Satisfaction level By service 70

7.3.15 Training and seminar 71

7.3.16 Work as employee 72

LIST OF FIGURES

TABLE TOPIC PAGE

Institute of Business Management & Research, Chinchwad, Pune Page vii

NO. NO.

7.1 Age and Gender 59

7.2 Education 60

7.3 AMFI Certified 61

7.4 Investment option 62

7.5 Preferred Product 63

7.6 No. of customer 64

7.7 Payment period & Satisfaction level for Payment period 65

7.8 Tax saving investment 66

7.9 Favorite AMC 67

7.10 No entry load 68

7.11 Advisor of KARVY 69

7.12 Satisfaction level By service 70

7.13 Training and seminar 71

7.14 Work as employee 72

LIST OF ABBREVIATIONS

Institute of Business Management & Research, Chinchwad, Pune Page viii

SL.NO. ACRONYM EXPANSION

1 MF Mutual Fund

2 AMC Asset Management Company

3 IPO Initial Public Offering

4 NFO New Fund Offer

5 DEMAT Dematerialized

6 R & T AGENT Registrar and Transfer agent

7 AUM Asset Under Management

8 NAV Net Asset Value

9 ELSS Equity Linked Saving Schemes

10 AMFI Association of Mutual Funds in India

11 PAN Permanent Account Number

12 STP Systematic Transfer Plan

13 SIP Systematic Investment Plan

14 SWP Systematic Withdrawal Plan

15 SEBI Security Exchange Board of India

Institute of Business Management & Research, Chinchwad, Pune Page ix

CHAPTER 1

INTRODUCTION

Institute of Business Management & Research, Chinchwad, Pune Page 1

1.1 INTRODUCTION

“A study on preference among advisors towards mutual fund”. It is an analytical research

based on various aspects associated with sales and promotion of Mutual Fund.

Company wants to penetrate deeper into the market. To achieve this goal successfully

company wants to know the effectiveness of its products & services.

For this purpose company wanted to study the market effectiveness of its product.

Company wants to know about awareness of its product, financial advisor’s opinion

regarding the product, service problem, etc.

Reason for selection of the topic :-

Customers are very important for any business. Financial business basically are sold

through certified advisors. So it is very important to know, what they want?, What are

their problems?

Making new advisors for selling the products is a bit costly, than stimulating old and dead

advisors. Its better to sort out the grievances & as it will automatically generate the

business.


CHAPTER 2

ORGANIZATIONAL PROFILE


2.1 Introduction:

“Success is a journey, not a destination.”

If we look for examples to prove this quote then we can find many but there is none like

that of karvy. Back in the year 1981, five people created history by establishing karvy and

company which is today known as karvy, the largest financial service provider of India.

Success sutras of karvy:

The success story of karvy is driven by 8 success sutras adopted by it namely trust,

integrity, dedication, commitment, enterprise, hard work and team play, learning

and innovation, empathy and humility. These are the values that bind success with

karvy.

Vision of karvy:

To achieve & sustain market leadership, Karvy shall aim for complete customer

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

quality services. In the process Karvy shall strive to meet and exceed customer's

satisfaction and set industry standards.

Mission statement:

“Our mission is to be a leading and preferred service provider to our

customers, and we aim 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.”


The success ladder:

Fig no 1.1 success ladder

2.2 Company overview:

Karvy was established as karvy and company by five chartered accountants during the

year 1979-80, and then its work was confined to audit and taxation only. Later on it

diversified into financial and accounting services during the year 1981-82 with a capital

of Rs150000. It achieved its first milestone after its first investment in technology. Karvy

became a known name during the year 1985-86 when it forayed into capital market as

registrar.

Evolution of KARVY:It is well said that success is a journey not a destination and we can see it being proved by

karvy. Under this section we will see that how this “karvy and company” of 1980 became

“karvy” of 2008. Karvy blossomed with the setting up of its first branch at Mumbai

during the year 1987-88. The turning point came in the year 1989 when it decided to enter

into one of the not only emerging rather potential field too i.e; stock broking. It added the

feather of stock broking into its cap. At the same time it became the member of

Hyderabad Stock Exchange through associate firm karvy securities ltd and then karvy

never looked back……..it went on adding services one after another, it entered into retail

stock broking in the year 1990. Karvy investor service centers were set up in the year

1992. Karvy which already enjoyed a wide network through its investor service centers,

entered into financial product distribution services in the year 1993. One year more and


karvy was now dealing into mutual fund services too in the year 1994 but it didn’t

stopped there, it stepped into corporate finance and investment banking in the year 1995.

Karvy’s strategy has always been being the first entrant in the market. Karvy again hit the

limelight by becoming the first registrar in the country to be awarded ISO 9002 in the

year 1997. In January 1998, Karvy became first Depository Participant in Andhra

Pradesh. An ISO 9002 Company, Karvy’s commitment to quality and retail reach has

made it an Integrated Financial Services Company.Then it stepped into the other most

happening sector i.e; IT enabled services by establishing its own BPO units and at a gap

of just 1 year it took the path of e-Business through its website www.karvy.com . Then it

entered into insurance services in the year 2001 with the launch of its retail arm “karvy-

the finapolis: your personal finance advisor”. Then in the year 2002 it launched its

PCG(Private Client Group) which looks after its High Networth Individuals .and

maintain their portfolio and provides them with other financial services. In the year 2003,

it commenced secondary debt and WDM trading.

It was a decade which saw many Indian companies going global…..so why the largest

financial service provider of India should lag behind? Hence, karvy launched “karvy

global services limited” after entering into a joint venture with Computershare, Australia

in the year 2004.the year 2004 also saw karvy entering into commodities marketing

through karvy comtrade.

Year 2005 saw Karvy establishing a separate branch for its insurance services under the

head “ karvy insurance broking ltd” and in the same year, after being impressed with the

rapid growth of karvy stock broking limited, PCG group of Hong Kong acquired 25%

stake at KSBL. In the year 2006, karvy entered into one of the hottest sector of present

time i.e real estate through Karvy realty& services (India) ltd. hence , we can see now

karvy being established as the lagest financial service provider of the country.

Today, company has 575 branch offices in 375 locations all over the India & overseas at

Dubai & New York. The company adds 5 new offices every month to the company’s ever

growing national network in every corner of the country. The company service over 25

million individual investors through 9000 trained & qualified staff, 225 corporate and

handle corporate disbursements that exceed Rs.5500 Crores.


http://www.karvy.com/

WHERE KARVY STAND IN THE MARKET?

The landmarks achieved by Karvy very well define its success story. A company started

by five chartered accountants, named as karvy now turned into today’s karvy group, the

largest financial intermediary of India. But success didn’t came to karvy at a flow, the

hard work and dedication of its workforce made it what it is today.

Gradually it achieved the following landmarks and now it has became what we call the

karvy group, now it is:

1. Largest independent distributor for financial products.

2. Amongst the top 3 stock broker.

3. Among the top 3 depository participants.

4. Largest network of branches & business associates.

5. ISO 9002 certified operations by DNV.

6. Amongst top 10 investment bankers.

7. Adjudged as one of the top 50 IT users in India by MIS south Asia.

8. Full- fledged IT driven operation.

9. India’s no.1 registrar & securities transfer agent.

KARVY is a legendary name in financial services, Karvy’s credit is defined by its

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

centric values.

Today KARVY 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

KARVY 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 Karvy’s 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.


Now karvy group consists of 10 highly renowned entities which are as follow:

2.3 KARVY SERVICES – AN OVERVIEW

1. Stock broking

2. Demat services

3. Investment product distribution

4. Investment advisory services

5. Corporate finance & Merchant banking

6. Insurance

7. Mutual fund services

8. IT enabled services

9. Registrars & Transfer agents

10. Loans

Company is dealer of following Fixed Deposits

PUBLIC SECTORSl. No. Company Name1 HUDCO2 Sardar Sarovar Narmada Nigam Ltd.3 Tamilnadu Power Finance Corporation Ltd.4 NTPC

[Public Sector FD with which Karvy deals]

NON BANKING FINANCE COMPANIESSl. No. Company Name1 Ashok Leyland Finance Ltd.2 Bajaj Auto Finance Ltd.3 Birla Home Finance Ltd.4 Cholamandalam Investment & Finance Co. Ltd.5 Escorts Finance Ltd.6 First Leasing Company of India Ltd.7 IDBI Suvidha8 Nicco Uco Alliance Credit Ltd.

[FD of Non Banking Finance Companies with which Karvy deals]


HOUSING FINANCE COMPANIESSl. No. Company Name1 Can Fin Homes Ltd.2 Dewan Housing Finance Corporation Ltd.3 Gruh Finance Ltd.4 HDFC Ltd.5 PNB Housing Finance Ltd.6 Sundaram Home Finance Ltd.

[FD of Housing Finance Companies with which Karvy deals]

MANUFACTURING COMPANIESSl. No. Company Name1 A P Paper Mills Ltd.2 Amtek India Ltd.3 Atul Ltd.4 Ballarpur Industries Ltd.5 Chambal Fertilizers & Chemicals Ltd.6 Escort Ltd.7 Greaves Ltd.8 Gujarat Alkalies & Chemicals Ltd.9 Indian Express10 Ind-Swift Ltd.11 JK Industries Ltd.12 Jindal Steel & Power Ltd.13 Sound Craft Industries Ltd.14 Supreme Industries Ltd.15 Zuari Industries Ltd.

[ FD of Manufacturing Companies with which Karvy deals]

Karvy is dealer of following bonds

RBI Saving Bonds

NHAI Bonds

REC Bonds

List of AMC’s associated with KARVY:


1 Alliance Mutual Fund2 Birla Mutual Fund3 Bank of Baroda Mutual Fund4 Can Bank Mutual Fund5 Chola Mutual Fund6 Deutsche Mutual Fund7 DSP Merrill Lynch Mutual Fund8 Franklin Templeton Investments9 GIC Mutual Fund10 HDFC Mutual Fund11 HSBC Mutual Fund12 IL & FS Mutual Fund13 JM Mutual Fund14 Kotak Mutual Fund15 LIC Mutual Fund16 Punjab National Bank Mutual Fund17 Prudential ICICI Mutual Fund18 Principal Mutual Fund19 Reliance Mutual Fund20 State Bank of India Mutual Fund21 Standard Chartered Mutual Fund22 Sundaram Mutual Fund23 SUN F&C Mutual Fund24 Tata Mutual Fund

[List of MF Companies with which Karvy deals]

A SEBI Category 1 Registrar, So far, Karvy has handled over 675 ISSUES as Registrars

to public issues processed over 52 million applications and is servicing over 16 million

investors from various locations spread over 205 clients.

2.4 Organization structure of karvy:

talking about the organization structure of karvy, we have the board of directors as the

supreme governing body , the chairman being Mr. C Parthasarthy, Mr. M Yugandhar as

the managing director, Mr M S Ramakrishna and Mr. Prasad v. Potluri as directors.


http://www.mutualfundsindia.com/amc_snapshot2.asp?scheme=AM031


The board of directors head the karvy group, karvy computershares limited, karvy

investors services ltd., karvy comtrade, karvy stock broking ltd., and karvy global

services ltd.

Karvy group being the flagship company looks after the functional departments such as

corporate affairs, group human resources, finance & accounting, training & development,

technology services and corporate quality.

Karvy computershare private limited facilitates mutual fund services, share registry and

issue registry whereas merchant banking is looked after by karvy investor services ltd.

Karvy stock broking ltd heads its another branch too ie. Karvy insurance broking ltd. The

services offered by KSBL are: stock broking, depository, research, distribution, personal

client group and institutional desk. And finally the BPO services are managed by karvy

global services ltd. Summarizing it in a diagram, it can be presented as:

Spectrum of services offered by karvy:


Karvy being the top registrar and transfer agent, functions as registrar in most of the

issues in the country. Talking about the mutual fund services offered by karvy, we can get

the products of 33 AMCs over here. it deals in both closed ended funds as well as open

ended too. Now one must be thinking why to get the mutual funds from karvy instead of

getting it directly from AMCs? we have great reasons for it: the first one being ; if we

avail the services of karvy then we can get the information about all the AMCs and their

products at a single place along with expert recommendations whereas at an AMC we can

get information about the products of that specific AMC only. And the second being wide

network of karvy. Nowadays we can find karvy offices at remote areas too.

Along with these, karvy is very well handling the role of depository participant. Being

registered with both the depositories i.e.; NSDL (national securities depository ltd) and

CDSL (central depository services ltd), karvy can have access to both. Its wide network

also facilitates it in distribution of retail financial products.

Karvy believes in being updated always. So it is always ready to use latest technologies

so that its clients always be in touch with the latest happenings along with karvy. It offers

e-business through internet through its website: www.karvy.com . Other than it, it also

provides its various services through SMSes.

Karvy’s services are not limited to its investors only rather its offerings are for its

corporate clients and distributors too. it is very well aware of the fact that in this era of

neck to neck competition, we cant ignore any of the aspects of our business….so there’s a

offering for everybody…everyone’s welcome at karvy.

Why should investors choose for karvy?

Excellence is next to nothing….and here at karvy everybody tries their best to offer

excellent services to its clientele through its offerings maintaining the karvy culture which

includes:

1. Controlled and low cost service culture: karvy is there to serve its client at the

minimum possible cost. it controls cost by its various cost- cutting techniques and

minimization of avoidable costs.

2. Large volume processing capability: being the largest financial service provider in the

country, it has the unique distinction of operating its activities on a large scale which

benefits all the parties cordially.



3. Adherence to strict time schedule: karvy knows that time is money and tries it best to

finish the task within the stipulated time schedule.

4. Expertise in coordinating multi-location responses: karvy has got a wide network and

hence one can find its branches at most of the places in India. Thus it enjoys its presence

everywhere and coordinates among itself in solving the queries and in responding to any

situation.

5.Expertise in managing independent entities such as banks, post-office etc.: the work

culture of karvy and the ethics followed inside karvy makes its workforce compatible

with everybody, so the karvy people establishes good coordination with independent

entities too.

6. Pooling of group resources: karvy group consists of eight subsidiaries, so it can easily

pool up its resources for accomplishment of its goals, whenever needed. The groups can

help each other whenever there are peaks and lows, and even in the case when they have

huge targets just as we saw few years back, Tata group pooling its resources to acquire

Corus.

How karvy achieved it?

The core competency of karvy lies in the following points due to which it enjoys a

competitive edge over its competitors. The following culture adopted by karvy makes it

all time favorite among its clientele:

1. Professionally managed by qualified and trained manpower.

2. Uniquely structured in-house software and hardware department

3. Query handling within 48 hrs.

4. Strong secretarial, accounting and audit systems.

5. Unique work culture of working 7 days a week in 3 shifts.

6. Unmatched network spreading all over India.

Clientele of karvy:

Karvy’s culture has helped karvy in achieving such a distinct position in the market where

it can boast of its huge client base. Be it a retail investor investing Rs. 500 in a SIP in

Reliance mutual fund or be it the largest corporate house of the country: Reliance

industries- everybody is heading towards karvy for their wealth maximization, lets have a

look at the clientele of karvy :


According to the datas published in year 2009, karvy stock broking ltd. Operates through

more than 12000 terminals, more than 300000 accounts are maintained and commands

over 3.14% market share of NSE. The distribution services has access to more than Rs.

40 billion Assets Under Management. Karvy being a depository participant with both

NSDL and CDSL, manages more than 700000 accounts from more than 380 locations.

Talking about the registry services, it manages over 750 public/ right issues.at the same

time, it is managing over 16 million portfolios as registrar.

If we took a look at some of the top corporate houses availing the services of karvy then

we have: Reliance, IOC, IDBI,LIC, Hindustan Unilever, Principal Mutual Fund,

Duetsche Mutual Fund, Yogokawa, Marico Industries, Patni Computers, Morgan Stanley,

Glenmark, CRISIL, 3M, Kotak Mahindra Bank, Bharti Televenture, Infosys

Technologies, Wipro, Infotech, IPCL,TATA consultancy services, UTI mutual fund etc.

Thus in total karvy serves over 16 million investors and 300 corporates.

Now, as the project was carried on in Allahabad, so there is a special reference to

working of karvy at Northern zone and mutual funds in particular.

KARVY at Northern zone:

Karvy stock Broking Ltd has its Zonal office in Lucknow, which regulates its various

Branches in Allahabad, Varanasi, Mirzapur, Gorakhpur, Azamgarh, Deoria, Ghazipur,

Gonda, Jaunpur, Kanpur, Mughal Sarai, Renukoot etc.

Presently Mr. Abhinav Prasad is heading the Northern zone (Distribution).

Karvy is a member of three stock exchanges of India:

National Stock Exchange (NSE),

Bombay Stock Exchange (BSE) and

Hyderabad Stock Exchange (HSE).

Hierarchical Structure in diagram:


The above diagram shows the hierarchy of Karvy stock broking ltd. It can be easily

depicted from the diagram that the Northern regional head (presently Mr. Abhinav

Prasad) is the supreme in the northern region, under whom the various zonal heads

operate and under these zonal heads, the branch heads operate. Between each level o the

hierarchy, there exists a coordinator, who acts as the facilitator between the different

heads.

Karvy at Allahabad:

Now if we look at karvy’s branch offices at Allahabad, then there exist two branches of

karvy , which are as follow:

1. Civil Lines.

2. Naini.

Structure according to the Products offered by Karvy:


REGIONAL HEADS

REGIONAL HEADS

PRODUCT HEADS

HEA

PRODUCT HEADS

HEA

Mutual fundsMutual funds

Insurance brokingInsurance broking comm

odities

commodities

Stock brokingStock broking

Depository participant

Depository participant

Merchant & inv.banking

Merchant & inv.banking

PMSPMSRealtyRealty Debt division

Debt division

KARVY Mutual Fund Services:

Mutual funds have servings for everybody. Whichever type of investor you are, you will

surely get a mutual fund meeting your requirements. But investing in mutual funds is no

child’s play therefore karvy mutual fund advisory services is there to guide in each and

every step of investment in mutual funds so that the dream of wealth creation doesn’t

turns into nightmares. Its offerings includes: products of all the 33 major AMCs, research

report about all the existing funds as well as NFOs, customized mutual fund portfolios

designed for individual as well as institutional customers, it not only design the portfolios

rather it offers continuous portfolio revision too depending on changing market outlook

and evolving trends, it further gives access to its online consolidated portfolio statement.

Thus karvy with its various offerings makes the investor feel safe in this dynamic

environment of the Indian financial market.


Karvy Computershare mutual fund services offers investors services, distributor services

and client services. It can be said that karvy is dedicated towards providing quality

service to all these three facets of the investment process.

Karvy being an intermediary is well registered with the Association of Mutual Funds of

India (AMFI). KARVY has got the registration no [ARN 0018] for mutual funds, which

is mentioned on every form. After the procurement of forms from various AMCs, the

forms are passed on to its various zonal and branch offices (as per their requirements) and

then further processing is done either directly or through sub-brokers.

Karvy operates through its sub- brokers, associates and its excellent pool of own direct

employees. The employees are offered salary by karvy whereas the sub- brokers and

associates get certain commission. Karvy has 2 branches and 1 franchise in the city

Allahabad. All the work of mutual funds is regulated from Allahabad branch.

The main source of earning for KARVY is the brokerage offered by the various AMCs

known as pay-in. The amount offered may vary from AMC to AMC. Also, the

franchisees have to pay a certain amount every month. Now karvy also pay a certain

amount to the sub brokers and associates known as pay-out. The payout is decided

according to the procurement done by them.

Recruitment:

Karvy has an enviable pool of dynamic employees. Its people power has a great

contribution in making it the No. 1 financial intermediary. All the employees of karvy

dealing in mutual funds have to go through AMFI test. The recruitment process is at par

with the industry standards, it is mostly done through campus recruitment from reputed

B- schools. Other than that, it also recruits through direct interviews and GDs as per their

requirement.

Karvy never compromises with quality that’s the reason it is excelling by providing

quality services to all the investors, clients, AMCs etc. associated with it.


CHAPTER 3

INDUSTRY PROFILE

MUTUAL FUNDS


It’s all about mutual funds:

Mutual funds : A mutual fund is a professionally-managed firm of collective investments

that pools money from many investors and invests it in stocks, bonds, short-term money

market instruments, and/or other securities.in other words we can say that A Mutual Fund

is a trust registered with the Securities and Exchange Board of India (SEBI), which pools

up the money from individual / corporate investors and invests the same on behalf of the

investors /unit holders, in equity shares, Government securities, Bonds, Call money

markets etc., and distributes the profits.

The value of each unit of the mutual fund, known as the net asset value (NAV), is mostly

calculated daily based on the total value of the fund divided by the number of shares

currently issued and outstanding. The value of all the securities in the portfolio in

calculated daily. From this, all expenses are deducted and the resultant value divided by

the number of units in the fund is the fund’s NAV.

NAV = Total value of the fund………………. No. of shares currently issued and outstanding

Advantages of a MF– Mutual Funds provide the benefit of cheap access to expensive stocks

– Mutual funds diversify the risk of the investor by investing in a basket of assets

– A team of professional fund managers manages them with in-depth research inputs from investment analysts.

– Being institutions with good bargaining power in markets, mutual funds have access to crucial corporate information, which individual investors cannot access.

3.1 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. The history of

mutual funds in India can be broadly divided into four distinct phases.


First Phase – 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament by the Reserve

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

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

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

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

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

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

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

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

of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June

1987 followed by 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.

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

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. As at the end of January 2003, there were 33

mutual funds with total assets of Rs. 1,21,805 crores.

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

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

growth. As at the end of September, 2004, there were 29 funds, which manage assets of

Rs.153108 crores under 421 schemes.

3.2 Categories of mutual funds:

Mutual funds can be classified as follow:

Based on their structure:

i. Open-ended funds: Investors can buy and sell the units from the fund, at any point of time.

ii. Close-ended funds: These funds raise money from investors only once. Therefore,

after the offer period, fresh investments cannot be made into the fund. If the fund is

listed on a stocks exchange the units can be traded like stocks (E.g., Morgan

Stanley Growth Fund). Recently, most of the New Fund Offers of close-ended

funds provided liquidity window on a periodic basis such as monthly or weekly.

Redemption of units can be made during specified intervals. Therefore, such funds

have relatively low liquidity.


Based on their investment objective:

Equity funds: These funds invest in equities and equity related instruments. With

fluctuating share prices, such funds show volatile performance, even losses.

However, short term fluctuations in the market, generally smoothens out in the

long term, thereby offering higher returns at relatively lower volatility. At the

same time, such funds can yield great capital appreciation as, historically, equities

have outperformed all asset classes in the long term. Hence, investment in equity

funds should be considered for a period of at least 3-5 years. It can be further

classified as:

i) Index funds- In this case a key stock market index, like BSE Sensex or Nifty is

tracked. Their portfolio mirrors the benchmark index both in terms of composition and

individual stock weightages.

ii) Equity diversified funds- 100% of the capital is invested in equities spreading across

different sectors and stocks.

iii) Dividend yield funds- it is similar to the equity diversified funds except that they

invest in companies offering high dividend yields.

iv) Thematic funds- Invest 100% of the assets in sectors which are related through some

theme.

e.g. -An infrastructure fund invests in power, construction, cements sectors etc.

v) Sector funds- Invest 100% of the capital in a specific sector. e.g. - A banking sector

fund will invest in banking stocks.

vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the investors.


Balanced fund: Their investment portfolio includes both debt and equity. As a result, on

the risk-return ladder, they fall between equity and debt funds. Balanced funds are the

ideal mutual funds vehicle for investors who prefer spreading their risk across various

instruments. Following are balanced funds classes:

i) Debt-oriented funds -Investment below 65% in equities.

ii) Equity-oriented funds -Invest at least 65% in equities, remaining in debt.

Debt fund: They invest only in debt instruments, and are a good option for investors

averse to idea of taking risk associated with equities. Therefore, they invest exclusively in

fixed-income instruments like bonds, debentures, Government of India securities; and

money market instruments such as certificates of deposit (CD), commercial paper (CP)

and call money. Put your money into any of these debt funds depending on your

investment horizon and needs.

i. Liquid funds- These funds invest 100% in money market instruments, a large

portion being invested in call money market.

ii. Gilt funds ST- They invest 100% of their portfolio in government securities of and

T-bills.Floating rate funds - Invest in short-term debt papers. Floaters invest in

debt instruments which have variable coupon rate.

iii. Arbitrage fund- They generate income through arbitrage opportunities due to mis-

pricing between cash market and derivatives market. Funds are allocated to

equities, derivatives and money markets. Higher proportion (around 75%) is put in

money markets, in the absence of arbitrage opportunities.

iv. Gilt funds LT- They invest 100% of their portfolio in long-term government

securities.

v. Income funds LT- Typically, such funds invest a major portion of the portfolio in

long-term debt papers.

vi. MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and an

exposure of 10%-30% to equities.

vii. FMPs- fixed monthly plans invest in debt papers whose maturity is in line with

that of the fund.


3.3 Investment strategies:

1. Systematic Investment Plan: under this a fixed sum is invested each month on a fixed

date of a month. Payment is made through post dated cheques or direct debit facilities.

The investor gets fewer units when the NAV is high and more units when the NAV is

low. This is called as the benefit of Rupee Cost Averaging (RCA)

2. Systematic Transfer Plan: under this an investor invest in debt oriented fund and

give instructions to transfer a fixed sum, at a fixed interval, to an equity scheme of the

same mutual fund.

3. Systematic Withdrawal Plan: if someone wishes to withdraw from a mutual fund

then he can withdraw a fixed amount each month.

Risk v/s. return:


3.4 Working of a Mutual fund:

The entire mutual fund industry operates in a very organized way. The investors, known

as unit holders, handover their savings to the AMCs under various schemes. The

objective of the investment should match with the objective of the fund to best suit the

investors’ needs. The AMCs further invest the funds into various securities according to

the investment objective. The return generated from the investments is passed on to the

investors or reinvested as mentioned in the offer document.

3.5 Regulatory Authorities:

To protect the interest of the investors, SEBI formulates policies and regulates the mutual

funds. It notified regulations in 1993 (fully revised in 1996) and issues guidelines from time to

time.

SEBI approved Asset Management Company (AMC) manages the funds by making

investments in various types of securities. Custodian, registered with SEBI, holds the securities

of various schemes of the fund in its custody.

According to SEBI Regulations, two thirds of the directors of Trustee Company or board of

trustees must be independent.

The Association of Mutual Funds in India (AMFI) reassures the investors in units of mutual

funds that the mutual funds function within the strict regulatory framework. Its objective is to

increase public awareness of the mutual fund industry. AMFI also is engaged in upgrading

professional standards and in promoting best industry practices in diverse areas such as

valuation, disclosure, transparency etc.


Documents required (PAN mandatory):

Proof of identity :

1.photo PAN card

2. In case of non-photo PAN card in addition to copy of PAN card any one of the following:

driving license/passport copy/ voter id/ bank photo pass book.

Proof of address (any of the following) :latest telephone bill, latest electricity bill, Passport,

latest bank passbook/bank account statement, latest Demat account statement, voter id, driving

license, ration card, rent agreement.

Offer document:

An offer document is issued when the AMCs make New Fund Offer(NFO). It’s advisable to

every investor to ask for the offer document and read it before investing. An offer document

consists of the following:

Standard Offer Document for Mutual Funds (SEBI Format)

Summary Information

Glossary of Defined Terms

Risk Disclosures

Legal and Regulatory Compliance

Expenses

Condensed Financial Information of Schemes

Constitution of the Mutual Fund

Investment Objectives and Policies

Management of the Fund

Offer Related Information.

Key Information Memorandum: a key information memorandum, popularly known as KIM,

is attached along with the mutual fund form. And thus every investor get to read it. Its contents

are:

1. Name of the fund.

2. Investment objective

3. Asset allocation pattern of the scheme.

4. Risk profile of the scheme

5. Plans & options

6. Minimum application amount/ no. of units

7. Benchmark index


8. Dividend policy

9. Name of the fund manager(s)

10. Expenses of the scheme: load structure, recurring expenses

11. Performance of the scheme (scheme return v/s. benchmark return)

12. Year- wise return for the last 5 financial year.

3.6 Distribution channels:

Mutual funds posses a very strong distribution channel so that the ultimate customers doesn’t

face any difficulty in the final procurement. The various parties involved in distribution of

mutual funds are:

1. Direct marketing by the AMCs: the forms could be obtained from the AMCs directly.

The investors can approach to the AMCs for the forms. some of the top AMCs of India are;

Reliance ,Birla Sunlife, Tata, SBI magnum, Kotak Mahindra, HDFC, Sundaram, ICICI,

Mirae Assets, Canara Robeco, Lotus India, LIC, UTI etc. whereas foreign AMCs include:

Standard Chartered, Franklin Templeton, Fidelity, JP Morgan, HSBC, DSP Blackrock, etc.

2. Broker/ sub broker arrangements: the AMCs can simultaneously go for broker/sub-

broker to popularize their funds. AMCs can enjoy the advantage of large network of these

brokers and sub brokers.eg: KARVY being the top financial intermediary of India has the

greatest network. So the AMCs dealing through KARVY has access to most of the

investors.

3. Individual agents, Banks, NBFC: investors can procure the funds through individual

agents, independent brokers, banks and several non- banking financial corporations too,

whichever he finds convenient for him.

3.7 Costs associated:

Expenses:

AMCs charge an annual fee, or expense ratio that covers administrative expenses, salaries,

advertising expenses, brokerage fee, etc. A 1.5% expense ratio means the AMC charges

Rs1.50 for every Rs100 in assets under management. A fund's expense ratio is typically to the

size of the funds under management and not to the returns earned. Normally, the costs of

running a fund grow slower than the growth in the fund size - so, the more assets in the fund,

the lower should be its expense ratio


Loads:

Entry Load/Front-End Load (0%)- Its the commission charged at the time of buying the

fund to cover the cost of selling, processing etc. As per new rules of SEBI, there will no entry

load for purchasing Mutual Fund.

Exit Load/Back- End Load (0.25-2.25%)- It is the commission or charged paid when an

investor exits from a mutual fund, it is imposed to discourage withdrawals. It may reduce to

zero with increase in holding period.

3.8 Concept of benchmarking for performance evaluation:

Every fund sets its benchmark according to its investment objective. The funds performance is

measured in comparison with the benchmark. If the fund generates a greater return than the

benchmark then it is said that the fund has outperformed benchmark , if it is equal to

benchmark then the correlation between them is exactly 1. And if in case the return is lower

than the benchmark then the fund is said to be underperformed.

Some of the benchmarks are:

1.Equity funds: market indices such as S&P CNX nifty, BSE100, BSE200, BSE-PSU, BSE

500 index, BSE bankex, and other sectoral indices.

2.Debt funds: Interest Rates on Alternative Investments as Benchmarks, I-Bex Total Return

Index, JPM T-Bill Index Post-Tax Returns on Bank Deposits versus Debt Funds.

3. Liquid funds: Short Term Government Instruments’ Interest Rates as Benchmarks, JPM T-

Bill Index

To measure the fund’s performance, the comparisons are usually done with:

I) With a market index.

ii) Funds from the same peer group.

iii) Other similar products in which investors invest their funds.

3.9 Financial planning for investors (ref. to mutual funds):

Investors are required to go for financial planning before making investments in any mutual

fund. The objective of financial planning is to ensure that the right amount of money is

available at the right time to the investor to be able to meet his financial goals. It is more than

mere tax planning.


Steps in financial planning are:

Asset allocation.

Selection of fund.

Studying the features of a scheme.

In case of mutual funds, financial planning is concerned only with broad asset allocation,

leaving the actual allocation of securities and their management to fund managers. A fund

manager has to closely follow the objectives stated in the offer document, because financial

plans of users are chosen using these objectives.

Why has it become one of the largest financial instruments?

If we take a look at the recent scenario in the Indian financial market then we can find the

market flooded with a variety of investment options which includes mutual funds, equities,

fixed income bonds, corporate debentures, company fixed deposits, bank deposits, PPF, life

insurance, gold, real estate etc. all these investment options could be judged on the basis of

various parameters such as- return, safety convenience, volatility and liquidity. measuring

these investment options on the basis of the mentioned parameters, we get this in a tabular

form

Return Safety Volatility Liquidity Convenience

Equity High Low High High ModerateBonds Moderate High Moderate Moderate HighCo. Debentures

Moderate Moderate Moderate Low Low

Co. FDs Moderate Low Low Low ModerateBank Deposits

Low High Low High High

PPF Moderate High Low Moderate HighLife Insurance

Low High Low Low Moderate

Gold Moderate High Moderate Moderate GoldReal Estate High Moderate High Low LowMutual Funds

High High Moderate High High


We can very well see that mutual funds outperform every other investment option. On three

parameters it scores high whereas it’s moderate at one. comparing it with the other options, we

find that equities gives us high returns with high liquidity but its volatility too is high with low

safety which doesn’t makes it favourite among persons who have low risk- appetite. Even the

convenience involved with investing in equities is just moderate.

Now looking at bank deposits, it scores better than equities at all fronts but lags badly in the

parameter of utmost important ie; it scores low on return , so it’s not an happening option for

person who can afford to take risks for higher return. The other option offering high return is

real estate but that even comes with high volatility and moderate safety level, even the liquidity

and convenience involved are too low. Gold have always been a favourite among Indians but

when we look at it as an investment option then it definitely doesn’t gives a very bright picture.

Although it ensures high safety but the returns generated and liquidity are moderate. Similarly

the other investment options are not at par with mutual funds and serve the needs of only a

specific customer group. Straightforward, we can say that mutual fund emerges as a clear

winner among all the options available.

The reasons for this being:

I) Mutual funds combine the advantage of each of the investment products: mutual fund is

one such option which can invest in all other investment options. Its principle of diversification

allows the investors to taste all the fruits in one plate. just by investing in it, the investor can

enjoy the best investment option as per the investment objective.

II) Dispense the shortcomings of the other options: every other investment option has more

or les some shortcomings. Such as if some are good at return then they are not safe, if some are

safe then either they have low liquidity or low safety or both….likewise, there exists no single

option which can fit to the need of everybody. But mutual funds have definitely sorted out this

problem. Now everybody can choose their fund according to their investment objectives.

III) Returns get adjusted for the market movements: as the mutual funds are managed by

experts so they are ready to switch to the profitable option along with the market movement.

Suppose they predict that market is going to fall then they can sell some of their shares and

book profit and can reinvest the amount again in money market instruments.

IV) Flexibility of invested amount: Other then the above mentioned reasons, there exists one

more reason which has established mutual funds as one of the largest financial intermediary

and that is the flexibility that mutual funds offer regarding the investment amount. One can


start investing in mutual funds with amount as low as Rs. 500 through SIPs and even Rs. 100

in some cases.

Most popular stocks among fund managers (as on 30th April 2010)

Company Name no. of fundsReliance industries limited 244Larsen & toubro limited 206ICICI bank limited 202State bank of India 188Bharti airtel limited 184Bharat heavy electricals limited 200Reliance communication ventures ltd 169Infosys technologies ltd 159Oil& Natural gas corporation ltd. 153ITC ltd. 143

We can easily point out that reliance industries limited emerges as a true winner over here

attracting the attention of almost244 managers well followed by Larsen & toubro ltd ICICI

bank ltd and Bharat heavy electricals ltd. The other companies succeeding in getting a place at

top 10 are SBI, Bharti airtel limited, reliance communications, Infosys technologies limited,

ONGC and at last ITC ltd.


What are the most lucrative sectors for mutual fund managers?

This is a question of utmost interest for all the investors even for those who don’t invest in

mutual funds. Because the investments done by the MFs acts as trendsetters. The investments

made by the fund managers are used for prediction. Huge investments assure liquidity and

reflects appositive picture whereas tight investment policy reflects crunch and investors may

look forward for a gloomy picture.

Their investments show that which sector is hot? And will set the market trends. The expert

management of the funds will always look for profitable and high paying sectors. So we can

have a look at most lucrative sectors to know about the recent trends:

(source: moneycontrol.com; 20.05.09)

Sector name No. of MFs betting on itautomotive 255banking & financial services

196

cement & construction 237consumer durables 51conglomerates 218chemicals 259consumer non durables 146engineering & capital goods

317

food & beverages 175information technology 284media & entertainment 218Manufacturing 259metals& mining 275Miscellaneous 250oil & gas 290Pharmaceuticals 250Services 200Telecom 264Tobacco 150Utility 225


From the above data collected we can say that engineering & capital goods sector has emerged

as the hottest as most of the funds are betting on it. We can say that this sector is on boom and

presents a bright picture. Other than it other sectors on height are oil & gas, telecom, metals &

mining and information technology. Sectors performing average are automotive, cement &

construction, chemicals, media & entertainment, manufacturing, miscellaneous,

pharmaceuticals and utility. The sectors which are not so favourite are banking & financial

services, conglomerates, consumer non- durables, food & beverages, services and tobacco.

And the sector which failed to attract the fund managers is consumer durables with just 51

funds betting on it.

Thus this analysis not only gives a picture of the mindset of fund managers rather it also

reflects the liquidity existing in each of the sectors. It is not only useful for investors of mutual

funds rather the investors of equity and debt too could take a hint from it. Asset allocation by

fund managers are based on several researches carried on so, it is always advisable for other

investors too take a look on it. It can be further presented in the form of a graph as follow:

Systematic investment plan (in details)

We have already mentioned about SIPs in brief in the previous pages but now going into

details, we will see how the power of compounding could benefit us. In such case, every small


amounts invested regularly can grow substantially. SIP gives a clear picture of how an early

and regular investment can help the investor in wealth creation. Due to its unlimited

advantages SIP could be redefined as “a methodology of fund investing regularly to benefit

regularly from the stock market volatility. In the later sections we will see how returns

generated from some of the SIPs have outperformed their benchmark. But before moving on to

that lets have a look at some of the top performing SIPs and their return for 11 months

Scheme Amount NAV NAV Date Total AmountReliance diversified power sector retail 1000 81.67 21/7/2010 11303.80Reliance regular savings equity

1000 45.29 21/7/2010 11377.95principal global opportunities

fund1000 75.07 21/7/2010 11201.93

DWS investment opportunities

fund1000 37.97 21/7/2008 11297.05

BOB growth fund1000 51.24 21/7/2010 11228.25

In the above chart, we can see how if we start investing Rs.1000 per month then what return

we’ll get for the total investment of Rs. 11000. There is reliance Regular savings equity growth

plan giving the maximum returns of Rs. 1377.95 per year which comes to 16.88% roughly.

Next we can see if anybody would have undertaken the SIP in Reliance diversified power

sector fund would have got returns of app. 16.58%. We can see BOB growth fund, DWS

investment opportunities and Principal fund giving returns of 15.99%, 16.88%, and 15.64%

respectively which is greater than any other monthly investment options. However these

returns were only for the period for 11 months & therefore the returns were not much. Market

generally gives better returns in long term. Thus we can easily make out how SIP is beneficial

for us. Its hassle free, it forces the investors to save and get them into the habit of saving. Also

paying a small amount of Rs. 1000 is easy and convenient for them, thus putting no pressure

on their pockets.


INDUSTRY DETAILS

Following are list of Mutual Fund companies in India.

Sr. No. Mutual Fund Name No. of Schemes

1 Alliance Mutual Fund 362 Benchmark Mutual Fund 53 Birla Mutual Fund 744 Bank of Baroda Mutual Fund 175 Can Bank Mutual Fund 256 Chola Mutual Fund 457 Deutsche Mutual Fund 408 DSP Merrill Lynch Mutual Fund 409 Escorts Mutual Fund 1510 Franklin Templeton Investments 13011 GIC Mutual Fund 512 HDFC Mutual Fund 7913 HSBC Mutual Fund 3214 IL & FS Mutual Fund 4315 ING Vysya Mutual Fund 5516 JM Mutual Fund 5517 Kotak Mutual Fund 5618 LIC Mutual Fund 3519 Morgan Stanley Mutual Fund 120 Punjab National Bank Mutual Fund 421 Prudential ICICI Mutual Fund 12422 Principal Mutual Fund 6823 Reliance Mutual Fund 7424 Sahara Mutual Fund 1225 State Bank of India Mutual Fund 5926 Standard Chartered Mutual Fund 10027 Sundaram Mutual Fund 5228 SUN F&C Mutual Fund 129 Tata TD Mutual Fund 10030 Taurus Mutual Fund 931 Unit Trust of India 4232 UTI Mutual Fund 66

[Mutual Funds in India]












COMPETITORS DETAILS

1. Bajaj Capital

It was established in 1964 at Delhi. In 1965 it innovates a new financial instrument

‘Companies Fixed Deposits’ and becomes the first company to raise Fixed Deposits. The

objective of company is to provide professional guidance to investors on where, when and

how to invest and to assist the corporate sector in its resource raising activities. Bajaj

Capital became the first company to set up ‘Investment Centers’ all over India for this

purpose. Today, Bajaj Capital has 90 offices in over 40 important Indian Cities and has a

team of around 500 employees nationwide.

Services provided

Merchant banking Buying and Selling of Money Market Investments Distribution of financial products Investment Advisory Service

» Company fixed deposits» Bonds» Mutual funds» Life insurance» General insurance» Pension schemes» Post office schemes» Tax saving schemes» Insurance linked investment schemes» Initial public offerings» Housing loans» NRI schemes» Car insurance

Financial Planning

» Investment planning» Retirement planning» Insurance planning» Children's future planning» Tax planning» Short-term cash flow planning


2.MCS Ltd.

It is established in 1985 in Delhi. It is one of the largest Data Processing House employing

more than 600 people.

MCS Ltd. has 8 branches all over India

Volumes Handled

Share registry activities for over 100 corporate servicing over 10 million investors.

Mutual fund operations for 25 funds, servicing over 4.5 million investors.

Billing & settlement plan for Indian operations of IATA Geneva for 1.2 million tickets

per annum covering (26 airlines & over 1200 agents).

Services Offered:

Registrars and Transfer Agents

Registrars to IPO’s /Right Issues

Registrars to Open Offers

Registrars to Mutual Funds

Data Processing for Airlines

Print Shop Services

MCS is a major player in these activities in the Country with a market share of about 25%.

MCS today provides these services to over 140 Corporate and Mutual Funds for a total

investor base of 15 million.

3. N.J.India Investments Pvt. Ltd.

NJ India Invest (formerly known as NJ Capital stocks) was started in 1994 to cater to the

growing financial services sector. NJ India Invest evolved out as a client focused need based

investment advisory firm. NJ regards mutual fund as one of the best investment avenue

available to satisfy any kind of investment need.

NJ India Investment had over INR 5,050 Crores of mutual fund assets under advice with a


wide presence in over 130 locations in 22 states in India. The numbers are reflections of the

trust, commitment and value that NJ shares with its clients.

4. ICICI Securities Ltd.

ICICI Securities Limited (i-SEC) is a wholly owned investment-banking subsidiary of ICICI

Limited. ICICI is the only non-Japanese Asian financial institution to be listed on the New

York Stock Exchange (NYSE). ICICI Securities was formed on 22nd Feb. 1993, when ICICI's

Merchant Banking Division was spun off into a new company, ICICI Securities today is India's

leading Investment Bank and one of the most significant players in the Indian capital markets.

ICICI Brokerage Services Limited (IBSL) set up in March 1995, IBSL is a 100% subsidiary of

i-SEC. It commenced its securities brokerage activities in February 1996 and is registered with

the National Stock Exchange of India Limited and The Stock Exchange, Mumbai.

ICICI has started a website ICICIdirect.com which is the most comprehensive website, which

allows you to invest in Shares, Mutual funds, Derivatives (Futures and Options) and other

financial products.

ICICI has a large network of branches all over India.

Services offered:

Merchant Banking

Demat Service

Stock Broking

5. HDFC

HDFC is the leading financial company in India. IT has large network of branches all over

India. HDFC Securities which is fully subsidiary of HDFC provides demat service.

HDFC and its subsidiary provides following services.

Demat Service

Life Insurance

Banking Service

Housing Finance

Vehicle Finance

Education Loan


http://www.icici.com/

http://www.icici.com/

Personal Loan

Mutual Fund

6. Kotak Securities Ltd.

Kotak Securities needs no introduction as one of the largest stock broking houses in the

country and a leading distributor of primary market offerings. Kotak Securities limited is a

joint venture between Kotak Mahindra Bank and Goldman Sachs, the international investment

banking and brokerage firm.

Kotak Securities is a corporate member of both the BSE and the NSE. It is also a depository

participant with the National Securities Depository Limited (NSDL) for trading and settlement

of dematerialized shares.

Services offered:

Stock Broking

Financial Product Distribution

Demat Services

Investment Advisory Services

7. Motilal Oswal Securities Ltd.

Motilal Oswal Securities Ltd (MOSL) is one of the leading equity research and broking houses

of India. MOSL has a 20-member research team, which is engaged round the clock in

analyzing the Indian economy and corporate sectors to identify equity investment ideas. Asia

Money Broker's Poll 2002 has rated MOSL as one of the best Indian broking house, for

research, for the second time since 2000.

Motilal Oswal is member of NSDL and CDSIL for DP. It has wide network of branches. It has

158 branches all over India

Services Offered:

Demat Services

Stock Broking


Investment Advisory Service

MARKETING STRATEGY OF KARVY

Market Positioning:

Market positioning statements of Karvy are “At Karvy we give you single window service” and

“We also ensure your comfort”.

So, Karvy focus on the consumers who prefer almost all investment activities at same place by

providing number of various financial services. At Karvy a person can purchase or sell shares,

debentures etc. and at the same place also demat it. Karvy also provides other investment

option to the same person at same place like Mutual Fund, Insurance, Fixed Deposit, and

Bonds etc. and help the person in designing his portfolio. By this way Karvy provides comfort

to its customers.

Karvy is also positioned according to Ries and Trout. Karvy is promoted as a no. 1 investment

product distributor and R & T agent of India.

Target Market:

Karvy uses demographic segmentation strategy and segment people based on their occupation.

Karvy uses selective specialization strategy for market targeting. Target person for the Karvy

Stock Broking and Karvy Investment Service are persons who can work as sub-broker for the

companies. Companies focus on Advisors of Insurance and post office, Tax consultants and

CAs for making sub-broker.

Marketing channel System:

Karvy uses one level marketing channel for investment product distribution. Sub-brokers work

as intermediary between consumer and company. Company has both forward and backward

flow of activity through channel. Company distributes stationery, brokerage, and information

forward to its sub-broker. The sub-brokers send filled forms, queries, amount of investment.


Training Channel Members:

Karvy provides training to the sub-brokers because they will be viewed as the company by the

investors. The executives of Karvy explain various new schemes of investment to the sub-

brokers with its objective, risk factors and expected return. Company also periodically arrange

seminar to guide sub-brokers.

Advertising and Promotion:

The objective of advertising of Karvy is to create awareness about services of Karvy among

investors and sub-brokers and increase sub-brokers of Karvy.

Company doesn’t give advertisement in media like TV, Newspapers, and Magazines etc.

Karvy’s advertisement is made indirectly by the companies associate with it. Karvy is R & T

agent of around 700 companies. They publish name, address and logo of Karvy on their annual

report.

Karvy also publish its weekly Stock Market Newsletter ‘Karvy Bazaar Baatein’ and monthly

magazine ‘The Finapolis’ to guide investors and sub-brokers about market.


HR POLICY OF KARVY

Karvy’s HR Department is located at Hyderabad and of northern zone is at Lucknow.

Recruitment and Selection Policy:

The upper level members like zonal managers, regional managers, branch managers and senior

executives are recruited by publishing recruitment advertisement in leading national level

newspaper. The qualified applicant are then called for interview and selected.

The regional manager has authority to select lower level employee like peon, marketing

executives, accountant etc. by approval of zonal manager.

Training and Development:

Continuous training and upgrading technical, behavioral and managerial skills is a way of life

in Karvy. Karvy encourages employees to hone their skills regularly to enable them to face the

challenges of the changing requirements of customers that fit market up and down.

Training needs analysis is done on a regular basis and systematic methodologies are ensured

that skills and capabilities of all employees are constantly upgraded to enable them to perform

in the challenging work environment.

New employee has given training under experienced employee. The new employee work under

experience employee and observe his all activities. When company employs new technology

or there is any change in the working of company the training program is arranged.

Employee Motivation:

Karvy’s employees are highly empowered. They don’t have to report any person of the same

branch but they report upper level branch. Eg:- Product head of Allahabad branch directly

reports Regional head.


REGULATORY BODIES

Financial System is basically responsible for the major up and downs in the economy. So,

there are some regulatory bodies on it which ensures effectiveness in the management of fund

of the investors and transparency in the transactions.

Ministry of Finance

SEBI RBI Dept. of IT

Stock Brokers Commercial PAN R & T Agent Banks TAN Mutual Fund NBF Co. e-TDS

[Regulatory bodies]


SWOT Analysis

Strengths:

Employees are highly empowered.

Strong Communication Network.

Good co-operation between employees.

Number 1 Registrar and Transfer agent in India.

Number 1 dealer of Investment Products in India.

Weaknesses:

High Employee Turnover.

Opportunity:

Growth rate of mutual fund industry is 30 to 400% during last year and it

expected that this rate will be maintained in future also.

Marketing at rural and semi-urban areas.

Threats:

Increasing number of local players.

Past image of Mutual Fund.

No Entry load is affecting payout & business directly.


CHAPTER 4

SCOPE OF WORK


4.1 Scope of the work

Marketing of Financial product is a challenging as well as a growing field. Scanning and future potential are the important part of company. And when any person collects the data related to this topic then everyone notice it. Every member of marketing department needs this data from executive to the product head.

As a marketing student it is important to know about the real market conditions which develop the idea related to market without going in market and it also provide a research pattern to student.

This study contains detailed knowledge about, awareness among advisors, the market

share of Mutual fund, problem of advisor for not selling the Mutual fund. This will be

helpful for all the concerned persons.

A satisfied advisor gives more sales than, unsatisfied person.


CHAPTER 5

OBJECTIVES


5.1 PROBLEM FORMULATION

Marketing Research being a logical process definitely follows our predetermined

sequence or steps in order to obtain the desired results or outcomes. Though the entire

process of Marketing Research is quite complex and requires a considerable degree of

knowledge and skill, the step of the Problem Formulation is the most challenging and

critical one for the researcher as well as the research. It is rightly said that a problem, well

defined is half solved.

In today’s competitive world companies cannot afford to reactive, instead the trend is

toward proactive. It is due to the increasing competition that the companies cannot afford

to undertake research until something goes wrong. This can curtail the future growth or

even affect the very existence of the organization seeing to the trend of being proactive in

the future; companies are allocating more resources to the disciplines of research. In such

case it becomes a duty of researcher to ensure that the organization gets an optimum

return on the resources it has invested. Thus, Problem Formulation assumes great

importance in Marketing Research.

The Marketing Research project undertaken by me for the ‘Karvy Stock broking Limited’

encompasses within its scope, the study of “The Mutual Fund and to find out market

potential of KARVY Investor Service Ltd. with special reference to distribution of

Mutual Fund in Allahabad City. Company wants to increase its sub-brokers who

can work as intermediary between company and the investors.”


5.2 RESEARCH OBJECTIVES

Any activity done without an objective in a mind cannot turn fruitful. An objective

provides a specific direction to an activity. Objectives may range from very general to

very specific, but they should be clear enough to point out with reasonable accuracy what

researcher wants to achieve through the study and how it will be helpful to the decision

maker in solving the problem.

The objective of any research is basically divided into two categories.

Primary Objective:

To find out preference among advisors towards mutual funds.

Secondary Objectives:

Following are secondary objectives.

To assess an awareness of mutual funds in Allahabad City.

To find out level of awareness of mutual funds in Allahabad City.

To find out how many investment advisors are interested in dealing of mutual

fund.

To find out how many investment advisors are willing to work with Karvy.

To find out the Preferred AMC among advisiors & indirectly through customers.

5.3 SCOPE

It will help the organization . The organization may know, what are the preferences of their advisors and business associates so, they can work on that accordingly.


CHAPTER 6

REDEARCHMETHODOLOGY


6.1 RESEARCH METHODOLOGY

Market Research

Research in common parlance refers to a search for knowledge. We can also define

research as a scientific and systematic search for pertinent information on a specific topic.

In short the research for knowledge through objective and systematic method of finding

solution to a problem is research.

According to American Marketing Association “ Market Research is the function which

links the customers, and public to the market through information used to identify and

define marketing opportunity and problem; generates, defines and evaluate marketing

actions, monitor marketing performance and improve understanding as a process”

Objective of Marketing Research

The main aim of research is to find out the truth which is hidden and which has not been

discovered yet. Though each research study has its own specific purpose, we think of

research objectives as falling into a number of following broad grouping:

1. To gain familiarity with a phenomenon and to achieve new insight.

2. To portray accurately the features of a particular individual, situation or a group.

3. To determine the frequency with which something occurs.

4. To taste a hypothesis of a casual relationship between variables.


The objective of any research is basically divided into two categories.

Primary Objective:

To find out market potential of Karvy Investor Service Ltd.

Secondary Objectives:

Following are secondary objectives.

To assess an awareness of mutual funds in Allahabad City.

To find out level of awareness of mutual funds in Allahabad City.

To find out how many investment advisors are interested in dealing of mutual

fund.

To find out how many investment advisors are willing to work with Karvy.

To find out the favourite AMC among advisiors & indirectly through customers.

Research Process

Identify Problem/Objective Frame Hypothesis Select Research Design Select the Sample Collection of Data Analyze the Data Prepare Report

Research Design:-

A research design is a pattern or an outline of a research project’s working. It is a

statement of only the essential elements of a study, those that provide the basic guidelines

for the details of the project. It comprises a series of prior decision that taken together

provide master plans for executing a research projects.

The study was conducted on the basis of list of respondents who were targeted.

From that “A research design is the arrangement of conditions for collection and analysis

of Data in customers preferences were collected and were able to cover almost all the

leading brands. This was Research Design for the project.

Types of Research Design


1. Descriptive research

2. Exploratory Research

3. Experimental Research

4. Casual design Research

5. Case study

Researcher has adopted descriptive research design because; a descriptive research is

undertaken when researcher wants to know the characteristics of certain group.

Descriptive or Survey Research Design attempts to describe and explain conditions of the

present by using many subjects and questionnaires to fully describe a phenomenon.

Survey research design /survey methodology is one of the most popular for dissertation

research.

Characteristics of interest:

Advisor’s qualification & level of education.

Advisor’s knowledge about Mutual Fund

Advisor’s knowledge about Karvy

Advisor’s interest in getting knowledge of Mutual Fund

Advisor’s willingness to deal in Mutual Fund with Karvy

Advisor’s preference in selecting tax saving instrument of investment

Advisor’s preference in selecting Mutual Fund company

Types of Data-

(i) Primary Data- Primary data are set of those information which are collected new and

for the first time and thus happen to be original in nature.

(ii) Secondary Data- Secondary Data are those set of information’s which have already

being collected by someone else and which have already been passed through the

statically process.

Sources of Data:-


1) Primary data

This data can be collected through experiments or through survey. The various method of

Primary data collections are:

- Questionnaire method

- Observation method

- Interview method

The Researcher adopted personal interview method through structured questionnaire,

because it is descriptive study which study existing thing and questionnaire is cheaper as

compared to schedule method, cover wide area, collect detailed information of

respondents, it’s avoids bias, respondents may feel free to express their opinions without

ambiguity and less pressure to respondents. Through personal interview respondent easily

understand the questionnaire, it’s taking less time and respondents take interest as well as

interviewer communicate with respondents.

2) Secondary data

Secondary data refers to the data, which have already been collected and analyzed by

some more else usually published data are available in.

- Libraries

- Literature

- Periodicals

- Census and Registration data

- Trade association

- Government department

- Private sources

- Commercial data

- Financial data

- International organization

- References and Bibliographies

- Volume of statistics

- Advertising

- Internet

- Other sources

The method adopted in the study:


Company’s website, google search engine, books, magazine and news paper are used for

collection of secondary data.

Sampling Procedures:-

Random Sampling is used for the Survey.

Sampling Unit:-

Mutual Fund Advisors in Allahabad area.

Sampling Design:-

A Sampling Design is the process of obtaining the Sample from a given population. It

refers to Technique or the Method which the Researcher would adopt in selecting items

from the sample.

I have used both ‘Convenience Sampling Method’ and ‘Snow Ball Sampling Method’

Sampling Techniques:-

The financial advisors were randomly selected from given list of 300

Sample Frame:-

In this survey Researcher has selected 100 advisors out of 300 advisors as provided by the

sources.

Sample Size:-

A total sample size is of 100 Respondents in Allahabad city.


CHAPTER 7

DATA

COLLECTION

AND

DATA ANALYSIS


7.1 Research Instruments:-

The research instrument used was the “Structured Questionnaire”.

The questionnaire basically consisted of a set of question that was presented to the

respondents for their answers. This was far the best method used for the collection of

Primary Data. In the preparation of the questionnaire, care was taken to see that the

wording of the question were as simple as possible and would not cause any strain to the

respondents in understanding or interpreting of the questions, however some financial

terms were used as financial advisors were aware about it. Also the flow of the questions

has been kept in a logical order as much as possible.

The questionnaire includes closed ended and open ended questions. The closed ended

questions include both dichotomous i.e. yes/no type and the multiple-choice questions.

7.2 Data Analysis & Interpretation:

Data Analysis is based on the data collected by way of Questionnaires. From the collected

data findings are extracted. The data is tabulated and frequency distribution chart is

prepared.


7.3 RESEARCH ANALYSIS AND INTERPRETATION

1) Age & Gender?Table no.7.3.1Parameter No. of respondents % of respondents20-25 12 12%26-30 18 18%31-35 18 18%36-40 12 12%51-above 40 40%Total 100 100%

Table no.7.3.2Gender No of respondents % of respondentsMale 76 76%Female 24 24%Total 100 100

Figure no.7.1 76% male & 24 % Female

Analysis76% of the respondents are male, whereas remaining 24% are female.In above chart we can see that Young advisors are few in number, where as experienced are in majority above 40 years of age.


2) Education?

Table no.7.3.3Parameter No of respondents % of respondentsUndergraduate 23 23%Graduate 57 57%Masters 20 20%Total 100 100

Figure no.7.2 UG – Under graduate, G- Graduate

Analysis23% of the respondents are Undergraduate, whereas Majority of them are Graduate with 57%There are a few advisors which are Post Graduate & having high knowledge.


3) Are you AMFI certified?

Table no. 7.3.4Parameter No of respondents % of respondentsYes 68 68No 32 32Total 100 100

Figure no.7.3AMFI – Association of Mutual Funds in India

AnalysisThe number of AMFI certified advisors is quite high, which means they have passed AMFI exam & are quite knowledgeable as compared to non-amfi.


4) As an investment advisor, which investment options you suggest to your customers, and Mention Reasons also?

Table no.7.3.5Options No of respondents % of RespondentsInsurance 39 39%Mutual Funds 24 24%Fixed Deposits 11 11%Bonds 16 16%Others 10 10%Total 100 100

Figure no. 7.4

INS – Insurance, MF – Mutual Fund, FD – Fixed deposits

AnalysisThe most preferred product is Insurance followed by MF, Bonds & FD’s.


5) Reason for selling Preferred Product?

Table no. 7.3.6Reasons No of respondents % of respondentsReturns 23 23Risks 17 17Commission 24 24Safety 16 16Tax benefits 20 20Total 100 100

Figure No.7.5Here (R1 – Returns), (R2 – Risks), (P – Payout/Commission),(S – Safety), (T – Tax Benefit)

AnalysisThe reasons for preferring investment options are mainly returns & payout Factor.However tax benefit was second preference and Risks & safety were the last.


6) Approximately how many customers do you serve?

Table no.7.3.7Parameter No of respondents % of respondents0 – 50 13 1351 – 100 27 27101 – 150 22 22151 and above 38 38Total 100 100

Figure no.7.6

AnalysisMost of the advisors are maintaining a good database of customers.


7) What is your Brokerage payment period? Are you satisfied with it ?Table no.7.3.8Parameter No of respondents % of respondents1 week 18 18%2 weeks 38 38%3 weeks 32 32%4 weeks 12 12%Total 100 100

Satisfaction levelTable no.7.3.9Parameter No of respondents % of respondentsYes 39 39No 61 61Total 100 100

Figure no.7.7Analysis

Majority of the respondents are not satisfied with the payment period. The average payment period should be lesser.


8) If a taxable service person wants to invest, generally which option would you suggest for investment?

Table no. 7.3.10Parameter No of respondents % of respondentsInsurance 33 33%ELSS 27 27%Bond 32 32%Others 8 8%Total 100 100

Figure No.7.8Ins - Insurance, ELSS – Equity Linked Saving Scheme of Mutual Fund.

AnalysisIt seems that insurance is more suggestable, then comes Bonds & ELSS.Others include, PPF, infra schemes etc.


9) Are you interested to deal in Mutual Fund? If no please mention reasons, and if yes please mention your favorite AMC.

Table no. 7.3.11Parameter No of respondents % of respondentsYes 73 73%No 27 27%Total 100 100

Figure no.7.9

AnalysisMajority of the respondents were interested to deal in mutual fund. However some of them refused. The reason was less pay out, not faith in market, high risk involved,Liquidity problem etc. These are the difficulties in selling Mutual fund

Some of the preferred & favorite AMC’s areReliance Mutual FundHDFC Mutual FundICICI Prudential Mutual Fund.SBI Mutual Fund


10) Do you think that, decisions for no-entry load to mutual funds is good?

Table no.7.3.12Parameter No of respondents % of respondentsYes 18 18No 82 82Total 100 100

Figure no.7.10

AnalysisDecision for no-entry load is not accepted by majority of the respondents, as it has lessened the pay-out which earlier was more.

11) Are you associated with Karvy?


Table no.7.3.13Parameter No of respondents % of respondentsYes 73 73No 27 27Total 100 100

Figure no.7.11

AnalysisMaximum number of respondents are associated with Karvy, as it is much popular in the city Allahabad.

12) Are you satisfied with services provided by Karvy’s Allahabad Branch?


Table No.7.3.14Parameter No of respondents % of respondentsFully satisfied 16 16To some extent 23 23Not Fully satisfied 28 28Not satisfied 26 26Can’t say 7 7Total 100 100

Figure no.7.12

AnalysisOnly 15% of the respondents are fully satisfied, rest of them are not satisfied.

13) In future would you like attend seminars & Training Programs if arranged by Karvy?


Table no. 7.3.15Parameter No of respondents % of respondentsYes 18 18No 58 58Don’t know 24 24

Figure no.7.13

AnalysisA few of the respondents are only interested to attend seminar & training program, if arranged & organized by karvy. Many of the respondents were lacking time factor.

14) Would you like to work with Karvy Stock Broking Ltd in Future for dealing Mutual Fund?


Table no. 7.3.16Parameter No of respondents % of respondentsYes 26 26No 74 74Total 100 100

Figure no.7.14

AnalysisLeast number of respondents were interested to work with karvy as an employee, the reasons were Reputed name, Trust etc.Maximum persons were not interested to work with Karvy, the reasons were,Lack of time, independency, individual working hours etc.


CHAPTER 8

OBSERVATIONAND

FINDING


8.1 FINDINGS

The awareness level about Mutual Funds is More than average in the Allahabad

City among advisors.

Approximately 73% of advisers are aware of and interested in dealing of Mutual

Funds. The reason for not interested in dealing of Mutual Fund is payout factor

about Mutual Fund.

Most of the investment advisors are aware of MF services provided by Karvy, so

we can say that awareness level about MF services of Karvy is quite high.

Few of the advisers are interested to know about Mutual Funds and interested to

attend seminar on Mutual Funds arranged by Karvy as they are having lack of

time & most of them are already aware through print & broadcast media

Only 26% of advisers are interested to work with Karvy. Most of advisors don’t

want to work with Karvy because they have no time for expanding their services.

Most of people invest in insurance to save tax followed by MF, Bonds & FD’s.

Insurance is widely used as tax-saving instrument & the other factor is pay out

factor. Insurance generates much better commission than Mutual Fund.


CHAPTER 9

LIMITATIONS


9.1 LIMITATIONS

Due to limitation of time and cost constrains a sample size of only 100

respondents are chosen. The respondents in majority were sub-brokers of karvy

therefore they were limited in number.

Data Analysis and interpretation done may not be that strong due to small sample

and ‘Convenience Sampling Method’.

The sample extent for research is only Allahabad City.

Working of the office was also affecting the research.

The research was a bit costly, as I met each & every respondent individually at my

own expenses.

Time factor was also another problem, as I was supposed to do many other works

assigned by the office.

As karvy is registrar for many companies including Reliance, ONGC etc & many

other works are done by a single branch therefore too much of work load is there

with limited working staff.

Some of the respondents may be biased in giving responses.

My inexperience in research area might have affected results.


CHAPTER 10

RECOMMENDATIONS


10.1 RECOMMENDATIONS

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

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

money in Mutual Funds.

In Allahabad Advisors have good knowledge about Mutual Funds, So proper

Marketing of various schemes is required, company should arrange more and

more programs on Mutual Funds.

Awareness of MF services provided by Karvy is also quite high, but service part is

lagging, so company needs proper marketing of their all services by distribution of

forms, collection of forms, arranging seminars etc.

Most of advisors are not interested in dealing of Mutual Funds because they don’t

want to expand their services due to lack of time, so company should provide

them knowledge about single window services by which investor can get all

financial services from one place.

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

growth rate of Mutual Fund industry in India.

Most of people are aware of life insurance, NSC and PPF for tax saving so,

company should market various tax saving schemes of Mutual Funds and their

benefits.

The interface among the investors and the Mutual Fund Companies is the

advisors, so the advisors should have proper knowledge about Mutual Funds as

well as market so that they can help investors in their investment decisions. The

quality of agents performance and investors trust on them can be improved only if

they are permanent in nature.


CHAPTER 11

CONCLUSIONS


11.1 CONCLUSIONS

Mutual Fund Advisors used to give emphasis on mutual funds than other

investment options. Due to no entry load preferred section is shifting, but it will

not make any difference as it is generating good returns.

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.

Karvy is not able to provide sufficient services to the Advisors due to lack of staff

for distributing forms & brochure, at Allahabad Branch.

The awareness level is high in advisors are interested in dealing in mutual fund.

More advisors are knowing about services provided by karvy.


BIBLIOGRAPHY

1. www.mutualfundsindia.com

2. www.amfiindia.com

3. www.themanagementor.com

4. www.dewb-vc.com

5. www.karvy.com

6. www.indiacorporateadvisor.com

7. www.nsdl.co.in

8. www.incometaxdelhi.nic.in

9. www.incometaxindia.gov.in

10. www.the-finapolis.com

11. www.camsonline.com

12. www.moneycontrol.com

13. www.yahoofinance.com

Journals & other References:

Philip Kotler, ‘marketing management’ prentice Hall of India Pvt. Ltd. New Dehli.

C. R. Kothari ‘Research methodology’, Vishwa publication, New Delhi.

Saxena Rajan ‘marketing management’ Tata McGraw-hill publication Co. Ltd. New

Delhi.

H. V. Verma ‘marketing of services’ Global business press, New Delhi.

Business today magazine of February issue, 2008.

Karvy Finapolis, July-2010

Fact sheet ‘Reliance mutual fund’ July 2010


http://www.moneycontrol.com/

http://www.camsonline.com/

http://www.the-finapolis.com/

http://www.incometaxindia.gov.in/

http://www.incometaxdelhi.nic.in/

http://www.nsdl.co.in/

http://www.indiacorporateadvisor.com/


http://www.dewb-vc.com/

http://www.themanagementor.com/

http://www.mutualfundsindia.com/

ANNEXURE

Market Research

(Answer the questions, tick or answer as per requirement)

We assure you that, all the information collected from you will remain confidential & will be used for

studying & research purpose only

Name ______________________________________

Location & contact no______________________________________

1) Age & Gender (Tick the appropriate option) M F

20 – 25 26 – 30 31 – 35 36 – 40 40 – 45 & above

2) Education

Under Graduate Graduate Masters

3) Are you AMFI Qualified? If yes then please mention ARN code

__________________________________________________

4) As an investment advisor, which investment options you suggest to your customers?

Insurance Mutual Funds FD’s Bonds Others

Others_________________________________________________________________________________

5) Please Mention the reson for choosing above?

Insurance MF FD’s PPF Others

6) Approximately how many customers do you serve?

0-50 51-100 101-150 Greater then 150

7) What is the brokerage payment period and are you satisfied with it?

1 WEEKS 2 `WEEKS 3 WEEKS 4 WEEKS

Satisfied?

Yes No

8) If a Taxable service person wants to invest, generally which option would you suggest

for investment?

Insurance ELSS Bond Others


Please mention other options_____________________

9) Are you interested to deal in mutual Fund *please mention

reason

Yes No

If no then why?__________________________________________________________________

If yes, pls mention your favourite mutual fund AMC & Why_____________________

________________________________________________________

10) Do you think that decision for no entry load to mutual funds is good?

Yes No

11) Are you associated with KARVY

Yes No

If yes, Please mention sub broker code ____________________________________________

12) Are you satisfied with the services provided by KARVY’s Allahabad Branch?

Fully satisfied To some extent Not fully satisfied Not satisfied Can’t say

13) In future would you like to attend seminars & product trainings if arranged by

KARVY?

Yes No Don’t Know

14) Would you like to work with KARVY STOCK BROKING LTD in future for dealing

Mutual Fund?

Yes No

Please mention the reason.____________________________________________

___________________________________________________________________________

THANK YOU VERY MUCH FOR TAKING THE TIME

TO COMPLETE THIS QUESTIONNAIRE


GLOSSARY

Corporate advisory services

Merchant bankers offer customised solutions to solve the financial problems of

their clients. Merchant bankers study the working capital practices that exist within

the company and suggest alternative policies. They also advise the company on

rehabilitation and turnaround strategies, which would help companies to recover

from their current position. They also provide advice on appropriate risk

management strategies.

Loan syndication

Arrangement of loans for clients, by analysing their cash flow pattern, so that the

terms of borrowing meet the client’s cash requirements and offer assistance in loan

documentation procedures.

Portfolio

Total number of all holdings held by a company is called portfolio. The portfolio

mix is aimed at spreading the risk over different sectors. It consists of all assets of

company.

NAV

Net Asset Value is the current market worth of the mutual fund shares. It is

calculated daily by taking the funds total asset securities, cash and any accrued


earning deducting liabilities, and dividing the reminder by the number of shares

outstanding.

Depository

The principal function of a depository is to dematerialize securities and enable

their transactions in book-entry form. A depository established under the

Depositories Act can provide any service connected with recording of allotment of

securities or transfer of ownership of securities in the record of a depository.

Capital gain

The profit made from selling shares, mutual funds etc.

IPO

Abbreviation for initial public offering. Generally associated with admission to

listing of the share capital on the stock exchange.

AMC

Asset Management Company.

ELSS

Equity Linked Savings Scheme, ELSS is an option in mutual fund. In this option

the fund is locked for 3 years.


Preference among advisors towards mutual fund at KARVY STOCK BROKING LTD

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