Presented by :ManikantMBA-2A
Presented to :Mr. Arun DuttaPCTE
• HSBC's origins in India date back to 1853, when the Mercantile Bank of India was established in Mumbai.
• The acquisition in 1959 by The Hongkong and Shanghai Banking Corporation Limited of the Mercantile Bank was a decisive factor in laying the foundation for today's HSBC Group.
• HSBC has given India its first ATM way back in 1987.
• The organisation's adaptability, resilience and commitment to its customers have further enabled it to survive through turbulent times and prosper through good times over the past 150 years.
• The company serves the retail and corporate customers in India. It offers its products through its 77 branches and 151 franchise outlets.
• The company was formerly known as IL&FS Invest smart Limited and changed its name to HSBC Invest Direct (India) Limited in August 2009.
To become the preferred long-term financial partner to a wide base of customers whilst optimizing stakeholders’ value.
To establish a base of 1million satisfied
customers by 2010. It will be created by being a responsible and trustworthy partner!
Mission statement
An approach to business that reflects:-ResponsibilityTransparency Ethical Behavior Respect for Employees, Clients & Stakeholder
groups.
All the products of ILFS can be broadly divided
into the following two categories:
• Online Trading Products
• Advisory Service
• Other Services
SWOT ANALYSISStrengths
• Customization
• Expertise
• One-stop-shop for all the investment needs
• Unbiased and objective advice
• Extensive reach
• Brand image
• Competitive pricing
Weaknesses
• Expensive products
• Tedious procedures
• Fund transfer
• Attrition
Opportunities
• Right time for investors to re-enter the market.
• Huge untapped market.
• Increasing number of management graduates.
• Increase the tie-ups for fund transfers .
Threats• Stiff competition
• Increasing awareness of mutual funds and ULIPs.
• Changing economic scenario in India and changes in government policies.
• Many a investors burnt their figures during the bearish market conditions
Ratio analysis
Year 2009 2008 2007
Current Assets 3298.7 2469.43 2075.54
Current Liabilities 1794.24 1114.86 980.14
Current Ratio 1.84 2.22 2.12
Quick ratio
QUICK ASSETS 2009 2008 2007
Accounts Receivable 1027.73 909.58 770.39
Cash and Cash Equivalents 792.69 121.22 86.06
Other Current Assets 8.32 1 0.91
Total Quick Assets 1828.74 1031.8 857.36
Current Liabilities 1794.24 1114.86 980.14
QUICK RATIO 1.019228 0.925497 0.874732
Gross Margin Ratio
Year 2009 2008 2007
Gross Profit 1846.1 1602.31 1505
Sales 6106.43 5208.38 4777.64
Gross Margin Ratio 30.23207 30.76408 31.50091
Net Profit Ratio
Year 2009 2008 2007
Net Profit 401.52 286.5 291.12
Sales 6106.43 5208.38 4777.64
Net Profit Ratio 6.575364 5.500751 6.093385
Operating Margin Ratio
Year 2009 2008 2007
Operating Margin 1036.44 809.69 784.68
Net Sales 6106.43 5208.38 4777.64
Operating Margin Ratio 16.97293 15.54591 16.42401
Return on Assets Ratio
Year 2009 2008 2007
Net Profit Before Tax 683.1 461.15 456.15
Total Assets 9413.18 5681.25 5274.84
Return on Total Assets Ratio 7.256846 8.117052 8.647656
Year Net Sales Trend (%)
Mar'07 4777.64 100
Mar'08 5208.38 109.02
Mar'09 6106.43 127.81
(ii) Trend of net Profit
(iii) Trend Of EPS
25
Capital Market in India
Study on IPO in India: Performance Evaluation and Investors Perception
Objectives:To evaluate can immediate performance of
an IPO be relied upon for the equity in long run.
To analyse that more the subscription of the IPO, more is the immediate performance.
To study the factors affecting IPO purchase decision of the Retail Investors
• Today’s trying economic conditions have forced difficult decisions for companies.
• Understanding investment need of investors on an ongoing basis is critical for survival.
• More than ever management needs ongoing feedback from the customers, partners and employees in order to continue to innovate and grow.
Research Methodolgy
Research Methodolgy
Contd…….
• Data Collection----Primary and Secondary Sources
Primary Data : Questionnaires. Secondary Data: Websites, Newspapers,
Journals• Tools of Analysis Percentage, Mean method, Karl Pearson’s
Coefficient of Correlation, Probable Error.
• The analysis of immediate and long term performance of 25 IPO’s which were issued from 1st January 2009 to 31st May 2010.
• For this purpose, coefficient of correlation (Karl Pearson’s coefficient of correlation) was calculated between percentage change in the issue price & list price and percentage change in the issue price & current market price of the same.
IMMEDIATE AND LONG TERM PERFOMANCE
• Co-efficient of correlation
( r) = 0.233
Probable Error of “r” = 0.6745 * ( 1 – r2 ) /√N
=0.1275
IMMEDIATE AND LONG TERM PERFORMANCE
The probable error existed at 0.1275. However degree of correlation was not significant as it was not 6 times greater than its Probable Error which was 0 .1275. As for , 6 times probable error is equal to 6 * 0.1275, gives result 0.765, Which is greater than the degree of correlation.
Inference: Therefore, it can be concluded that there is no significant correlation between immediate performance and long term performance.
IMMEDIATE AND LONG TERM PERFORMANCE
Listing Gain of 25 IPO
Long term gain of 25 IPO
SUBSCRIPTION AND IMMEDIATE PERFORMANCE
• For the purpose of this section, a total of 25 IPOs have been taken from 1st January 2009 to 31st May 2010.
• Coefficient of correlation (Karl Pearson’s coefficient of correlation) was calculated between percentage change in the issue price & list price and subscription of the same.
•
SUBSCRIPTION AND IMMEDIATE PERFORMANCE
• Co-efficient of correlation
( r) = 0.6347• Probable Error of “r” = 0.6745 * (1 – r2)/ √N
=.080
Cont….
• The probable error existed at 0.080. Thus, degree of correlation was significant as it was 6 times greater than its Probable Error which was 0 .080.
• As for , 6 times probable error is equal to 6 * 0.0238, gives result 0.48, Which is less than the
degree of correlation.• Inference: Therefore, it can be concluded that there is
significant positive correlation between Subscription and Immediate performance of the issue.
SUBSCRIPTION IN TIMES
NO. OF YEARS THE INVESTORS HAVE BEEN IN THE MARKET
N=100
AVERAGE YEARLY INVESTMENT
N=100
PRIMARY AREA OF INTEREST
N=100
TYPE OF INESTMENT
N=100
PURPOSE OF INVESTMENT
N=100
PROFESSIONAL KNOWLEDGE IN STOCK MARKET
N=100
FINANCIAL STATEMENTS
Mean = (5*7)+(4*36)+(3*24)*( 2*32)+(1*1) /100 = 3.16
N=100
BUSINESS OF COMPANYMean = (5*11)+(4*43)+(3*24)+(2*18)+(1*4)/100 = 3.39
SUPPLIERS OF COMPANY
Mean = (5*4)+(4*18)+(3*31)+(2*43)+(1*4) /100 = 2.75
Reputation of the promotersMean = (5*4)+(4*29)+(3*34)+(2*4)+(1*4) /100 = 2.95
Past growth of the industryMean = (5*10)+(4*47)+(3*22)+(2*19)+(1*2) /100 = 3.44
Future Prospects of the Industry
Mean = (5*13)+(4*31)+(3*35)+(2*21)+(1*0) /100 = 3.36
Objective of the issue
Mean = (5*6)+(4*52)+(3*30)+(2*12)+(1*0) /100 = 3.52
Price band
Mean = (5*10)+(4*65)+(3*16)+(2*8)+(1*0) /100 = 3.65
Issue size
Mean = (5*8)+(4*65)+(3*37)+(2*5)+(1*1) /100 = 3.58
Underwriter of the issuing company
Mean = (5*7)+(4*43)+(3*35)+(2*14)+(1*1) /100 = 3.41
InflationMean = (5*17)+(4*56)+(3*23)+(2*4)+(1*1) /100 = 3.86
More investment in IPO when other investments carry low interest rates
Mean = (5*25)+(4*52)+(3*17)+(2*3)+(1*3) /100 = 3.93
Legal Hassels
Mean = (5*17)+(4*19)+(3*44)+(2*17)+(1*3) /100 = 2.45
Duration for which company has been in business
Mean = (5*13)+(4*41)+(3*34)+(2*9)+(1*3) /100 = 2.67
Foreign Collaborations
Mean = (5*30)+(4*34)+(3*28)+(2*5)+(1*3) /100 = 2.98
Prevailing Trend of the market
Mean = (5*10)+(4*34)+(3*28)+(2*19)+(1*9) /100 = 3.17
IPO of an MNCMean = (5*16)+(4*53)+(3*22)+(2*7)+(1*2) /100 = 3.74
Recent IPO PerformancesMean = (5*17)+(4*20)+(3*50)+(2*10)+(1*3) /100 = 2.53
Views of Top Fund Managers
Mean = (5*25)+(4*52)+(3*19)+(2*4)+(1*0) /100 = 2.98
Ratings by a research analyst
Mean = (5*23)+(4*21)+(3*50)+(2*0)+(1*6) /100 = 2.85
Listing in a well known Stock Exchange
Mean = (5*9)+(4*27)+(3*37)+(2*25)+(1*2) /100 = 3.16
Performance of IPOs in the recent past
Mean = (5*9)+(4*28)+(3*36)+(2*26)+(1*1) /100 = 3.23
Media Advertisements
Mean = (5*4)+(4*32)+(3*39)+(2*19)+(1*6) /100 = 3.09
Market Volatility
Mean = (5*4)+(4*13)+(3*46)+(2*18)+(1*19) /100 = 3.45
FINDINGS• Immediate performance of IPO can be relied upon for the
equity in the long run is rejected. It is proved from the fact that over last 1 and Half years, there existed statistically insignificant positive correlation between percentage change in the issue price & list price of the IPO and percentage change in the issue price & current market price of the same.
• More the subscription (times of issue size) of the IPO, more
is the immediate performance, is accepted. As there existed statistically significant positive correlation between subscription (times of issue size) of the IPO and its immediate performance at the time of listing.
FINDINGS
• Investors evaluate an IPO maximum from Promoters of the company, prevailing Market Trend & Recent IPO performance & Issue Size of the IPO.
• Investors evaluate an IPO minimum from Suppliers of the company, Listing in Well Known Stock exchanges & Media Advertisements
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