sad as hiv project

8/3/2019 Sad as Hiv Project

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KLES INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH,HUBLI.

EXECUTIVE SUMMARY

Anand Rathi is a leading full service investment bank founded in 1994 offering a wide

range of financial services and wealth management solutions to institutions, corporations, high

net worth individuals and families. The firm has rapidly expanded its footprint to over 350

locations across India with international presence in Dubai, Hong Kong & New York. Founded

by Mr. Anand Rathi and Mr. Pradeep Gupta, the group today employs over 2,500 professionals

throughout India and its international offices.

The firms philosophy is entirely client centric, with a clear focus on providing long term

value addition to clients, while maintaining the highest standards of excellence, ethics and

professionalism. The entire firm activities are divided across distinct client groups: Individuals,

Private Clients, Corporates and Institutions. Anand Rathi has been named The Best Domestic

Private Bank in India by Asiamoney in their Fifth Annual Private Banking Poll 2009. The firm

has emerged a winner across all key segments in Asiamoneys largest survey of high net worth

individuals in India.

AR analysts provide objective and decisive research that is designed to enable clients to

make informed investment decisions. The team covers entire spectrum of financial markets from

equities, fixed income, and commodities to currencies. They also cover the global markets, to

give clients an unparalleled macro-view of the investment opportunities across the globe.


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Their research expertise is at the core of the value proposition that we offer to their

clients. Research teams across the firm continuously track various markets and products. The

aim is however common - to go far deeper than others, to deliver incisive insights and ideas and

be accountable for results. AR research processes incorporate quantitative areas well asqualitative analyses. This multi-pronged approach helps us to provide superior risk- adjusted

returns for their clients.






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Topic:

A Study On Perception Of Investors Towards Equity & Alternative Investments in

Anand Rathi.

Objective of the study:

To understand the investors perception on various investment alternatives

Sub-objectives:

1. To analyze the investment pattern of people who reside in Hubli city.2. To study the investment decisions of different social class people.3. To study the portfolio of various investments availed at Anand Rathi.4. To study the extent of popularity of various products offered by Anand Rathi.

Methodology of the study:

Primary Data:

A questionnaire schedule was prepared and the primary data was collected.

Secondary Data:

1.Company website.

2.Customer data base

3.Company report

4.Company books and records

5.Related websites


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1. INDUSTRY PROFILEFinancial Services SectorOverview:

Financial stability is crucial for sustained economic growth but this cannot be achieved

without strong financial systems. [Financial Stability Institute]

The far-reaching changes in the Indian economy since liberalization in the early 1990s

have had a deep impact on the Indian financial sector. The financial sector has gone through a

complex and sometimes painful process of restructuring, capitalizing on new opportunities as

well as responding to new challenges.

During the last decade, there has been a broadening and deepening of financial markets.

Several new instruments and products have been introduced. Existing sectors have been opened

to new private players. This has given a strong impetus to the development and modernization of

the financial sector. New players have adopted international best practices and modern

technology to offer a more sophisticated range of financial services to corporate and retail

customers. This process has clearly improved the range of financial services and service

providers available to Indian customers. The entry of new players has led to even existing

players upgrading their product offerings and distribution channels. This continued to be

witnessed across key sectors like commercial banking and insurance, where private players

achieved significant success.

These changes have taken place against a wider systemic backdrop of easing of controls

on interest rates and their realignment with market rates, gradual reduction in resource pre-

emption by the government, relaxation of stipulations on confessional lending and removal of

access to confessional resources for financial institutions.

Over the past few years, the sector has also witnessed substantial progress in regulation

and supervision. Financial intermediaries have gradually moved to internationally acceptable

norms for income recognition, asset classification, and provisioning and capital adequacy.


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This process continued, with RBI announcing guidelines for risk-based supervision and

consolidated supervision. While maintaining its soft interest rate stance, RBI cautioned banks

against taking large interest rate risks, and advocated a move towards a floating rate interest rate

structure.

The past decade was also an eventful one for the Indian capital markets.

Reforms, particularly the establishment and empowerment of securities and Exchange Board of

India (SEBI), market-determined prices and allocation of resources, screen-based nation-wide

trading, dematerialization and electronic transfer of securities, rolling settlement and derivatives

trading have greatly improved both the regulatory framework and efficiency of trading and

settlement. On account of the subdued global economic conditions and the impact on the Indian

economy of the drought conditions prevailing in the country, 2002-03 was a subdued year for

equity markets. Despite this, the National Stock Exchange (NSE) and the Bombay Stock

Exchange (BSE) ranked third and sixth respectively among all exchanges in the world with

respect to the number of transactions. The year also witnessed the grant of approval for setting

up of a multi-commodity exchange for trading of various commodities.

In the midst of these positive developments, a key issue that continues to impact the

Indian financial sector adversely is that of asset quality and consequent pressure on capital. The

liberalization and globalization of the Indian economy led to a process of restructuring and

consolidation across several sectors of the economy. Several units that were set up in a

protectionist environment became.

Unviable in the new paradigm of competition in the global market place. Volatility in

global commodity prices has a major impact on Indian companies. This has led to non-

performing loans and provisioning for credit losses becoming a key area of concern for the

Indian financial system. The NPA problem in India, viewed in the context of comparison with

other Asian economies, does not pose an insoluble systemic problem; at 8% of GDP, the NPA

levels are significantly lower than the levels of 30-40% seen in other Asian economies.


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The key problems in India have been the inability of banks to quickly enforce security and

access their collateral, and the capital constraints in recognizing large loan losses. Recent

measures taken by the Government have attempted to address both these problems. The

Securitizations and Reconstruction of Financial Assets and Enforcement of Security

Interest (SARFAESI) Act creates a long-overdue framework for resolving the distressed credit

problem in India, by providing legal support to the resolution process and thereby encourages the

flow of capital into this specialized sector. The proposal for swapping high-yield Government

securities held by banks into lower-yield securities, thereby realizing mark-to-market gains and

utilizing the same to make additional provisions, would also strengthen the balance sheets of

banks. RBI operationalised the corporate debt restructuring forum, which has a made significant

progress in building lender consensus on restructuring. The next major initiative would be the

operationalisation of an asset reconstruction company, and the development of a market for

distressed credit similar to those in other countries.

`The increasing disintermediation in the corporate credit market, slowdown in creation of

new capital assets as companies focus on improving existing capacity utilization and improving

working capital efficiency of Indian corporate has led to lower demand for credit from the

corporate sector in the past two years. This has been replaced by the huge retail finance

opportunity. Existing low penetration levels, increasing affordability of credit and rising income

levels have led to a growing demand for retail credit. This has been strengthened by the tax

incentives for acquiring residential property, leading to a particularly high growth in housing

finance. Going forward, the infrastructure, retail and small and medium enterprise segments

would provide large growth opportunities, while the manufacturing sector is expected to

continue its consolidation phase, with selective additions to capacity. However, success in these

segments presents several challenges.

Retail and SME banking requires extremely effective distribution systems that arecapable of offering flexibility and convenience to the customer, while maintaining cost-

efficiency for banks. At the same time, banks need to put in place high-quality credit modeling

and data mining systems.


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This is essential to appropriately assess and price risk and allocate capital in a manner

that would optimize risk-adjusted returns. The Indian financial system would also witness greater

activity in the debt markets, as originators of credit increasingly seek to proactively manage their

portfolios by structuring and selling down loan portfolios to entities that have capital to deploybut lack the origination and structuring capabilities.

India has made considerable progress in the post-1991 period. The countrys

macroeconomic fundamentals have improved and external vulnerability has been sharply

reduced. Reforms in the financial sector have appropriately addressed the pre-1991 weaknesses

in the sector and improved its competitive strength domestically as well as globally. Individual

players now need to adopt proactive competitive strategies that will enable them to capture the

emerging opportunities. Exposure to global practices has made the Indian customer more

discerning and demanding. There has been a clear shift towards those entities that are able to

offer products and services in the most innovative and cost efficient manner. The financial sector

will need to adopt a customer-centric business focus. It will also have to create value for its

shareholders as well as its customers, competing for the capital necessary to fund growth as well

as for customer market share. This indeed will be the challenge in the coming years.

Challenges Ahead:

The Financial Services industry is undergoing metamorphosis. There is lately an

overwhelming demand for aggregation of services and enhanced customer service. The business

paradigms are changing faster in this industry than elsewhere. Financial Services firms have to

continually expand their service offerings to satisfy the increasingly demanding and savvy

customer.

1) Banking.2) Insurance.3) Capital Markets


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1) Banking:

Rapid consolidation, intensifying competition and increased customer awareness pose

significant challenges for banks as products and services are easily and quickly duplicated acrossthe industry. In this scenario, banks have moved rapidly from product-centric business models to

customer centric business models.

2) Insurance:

In the last few years the global Insurance industry has been witnessing significant

changes with the arena getting more competitive and complex. Consolidation and convergence in

the financial services sector, overhaul in social security systems, emergence of alternativedistribution channels, and increasing competition from other investment options are driving

sweeping changes in the insurance industry.

These changes have brought challenges of managing mergers, managing customer

expectations, and rationalizing the systems to support different products and distribution

channels.

3) Capital Markets:-

Mergers & acquisitions, rising costs of regulatory compliance, business continuity issues,

inherent operational inefficiencies, competitive pressures, unstable stock markets, and increasing

risks are compelling the financial services firms to be more innovative and agile. The internet

'revolution' has given way to mature and more sophisticated use of the medium's power,

throwing up fresh challenges along with opportunities. Corporate governance and transparency

have suddenly become hygiene factors. All these issues mandate accurate and timely information,

product innovation, and sleek marketing strategies along with strong technological support.


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Investing in various types of assets is an interesting activity that attracts people from all

walks of life irrespective of their occupation, economic status, education and family background.

When a person has more money than he requires for current consumption, he would be coined as

a potential investor.

The investor who is having extra cash could invest it in securities or in any other assets like

gold or real estate or could simply deposit it in his bank account. The companies that have extra

income may like to invest their money in the extension of the existing firm or undertake new

venture. All of these activities in a broader sense mean investment.

Investment:

Investment is the employment of funds on assets with the aim of earning income or capital

appreciation. Investment has two attributes namely time and risk.

Present consumption is sacrificed to get a return in the future. The sacrifice that has to beborne is certain but the return in the future may be uncertain. This attribute of investment

indicates the risk factor. The risk is undertaken with a view to reap some return from the

investment. For a layman, investment means monetary commitment. A persons commitment to

buy a flat or house for his personal use may be an investment from his point of view. This cannot

be considered as an actual investment as it involves sacrifice but does not yield any financial

return. To the economist, investment is the net addition made to the nations capital stock that

consists of goods and services that are used in the production process. A net addition to the stock

means an increase in the buildings, equipments or inventories. These capital stocks are used to

produce other goods and services.


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Financial investment is the allocation of money to assets that are expected to yield some

gain over a period of time. It is an exchange of financial claims such as stock and bonds for

money. They are expected to yield returns and experience capital growth over the years.The

financial and economic meanings are related to each other because the savings of the individualflow into the capital market as financial investments, to be economic investment. Even though

they are related to each other, we are concerned only about the financial investment made on

securities.

Investment Objectives:

The main investment objectives are increasing the rate of return and reducing the risk. Other

objectives like safety, liquidity and hedge against inflation can be considered as subsidiary

objectives.

1) Return:

Investors always expect a good rate of return from their investments. Rate of return couldbe defined as the total income the investor receives during the holding period stated ass a

percentage of the purchasing price at the beginning of the holding period.

Rate of return is stated semi-annually or annually to help comparison among the different

investment alternatives. If it is a stock, the investor gets the dividend as well as the capital

appreciation as returns. Market return of the stock indicates the price appreciation for the

particular stock.


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2) Risk:Risk of holding securities is related with the probability of actual return becoming less

than the expected return. The word risk is synonymous with the phrase variability of return.

Investments risk is just as important as measuring its expected rate of return because minimizing

risk and maximizing the rate of return are interrelated objectives in the investment management.

An investment whose rate of return varies widely from period to period is risky than whose

return that does not change much. Every investor likes to reduce the risk of his investment by

proper combination of different securities.

3) Liquidity:Marketability of the investment provides liquidity to the investment. The liquidity

depends upon the marketing and trading facility. If a portion of the investment could be

converted into cash without much loss of time, it would help the investor meet the emergencies.

Stocks are liquid only if they command good market by providing adequate return through

dividends and capital appreciation.

4) Hedge against inflation:Since there is inflation in almost all the economy, the rate of return should ensure a cover

against the inflation. The return rate should be higher than the rate of inflation else the investor

will have loss in real terms.Growth stocks would appreciate in their values overtime and provide

a protection against inflation. The return thus earned should assure the safety of the principal

amount, regular flow of income and be a hedge against inflation.


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5) Safety:The selected investment avenue should be under the legal and regulatory frame work. If it

is not under the legal frame work, it is difficult to represent the grievances, if any. Approval of

the law itself adds a flavour of safety. Even though approved by law, the safety of the principal

differs from one mode of investment to another. Investments done with the government assure

more safety than with the private party.

From the safety point of view investments can be ranked as follows: bank deposits,

government bonds, UTI units, non-convertible debentures, convertible debentures, equity shares,

and deposits with the non-banking financial companies.

The Investment Process:

There are five main steps in investment management:

Setting investment objectives.

Establishing investment policy.

Selecting the portfolio strategy.

Selecting the assets.

Measuring and evaluating performance.


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1. Setting Investment Objectives:The first main step in the investment management process is setting investment objectives.

For institutions such as pension funds and life insurance companies, these objectives may be a

cash flow specification to satisfy a liability due at some future date or a series of liabilities due atdifferent future dates. A guaranteed investment contract (GIC) sold by a life insurance company

is an example of the former; the projected benefit payout to beneficiaries of a pension plan and

an annuity policy sold by a life insurance company are examples of multiple liabilities. For

institutions such as banks and thrifts, the objective may be to lock-in a minimum interest rate

spread over the cost of their funds. For others, such as mutual funds and some trust accounts, the

investment objective may be to maximize return.

2. Establishing Investment Policy:

The second main step is establishing policy guidelines to satisfy the objectives. Setting

policy begins with asset allocation among the major asset classes-the products of the capital

market. The major asset classes include equities, fixed income securities, real estate, and foreign

securities. Client and regulatory constraints must be considered in establishing an investment

policy. For example, state regulators of insurance companies (life insurance companies and

property and casualty insurance companies) may restrict the amount of funds allocated to certain

major asset classes. Even the amount allocated within a major asset class may be restricted based

on the characteristics of the particular asset. So too must tax and financial reporting implications

be considered in adopting investment policies.

For example, life insurance companies have certain tax advantages that make investing in

tax-exempt municipal securities generally unappealing. Since pension funds are exempt from

taxes, they too would not usually be interested in tax-exempt municipal securities. Property and

casualty insurance companies will vary their ownership of tax-exempt municipal securities

depending on projected profits from underwriting operations. Commercial banks at one time

were major buyers of municipal securities; however, the 1986 tax act made investing in

municipal bonds somewhat less attractive to commercial banks.

Financial reporting requirements, in particular Statement of Financial Accounting Board

Nos. 87 and 88 and the Omnibus Budget Reconciliation Act of 1987 (a legislative initiative

which reinforce es the FASB 87 interpretation of liabilities), affect the way in which

pension funds establish investment policies. Unfortunately, sometimes financial reporting

considerations force institutions to establish investment policies that may not be in the best

interest of the institution in the long run.


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3. Selecting a Portfolio Strategy:

Selecting a portfolio strategy that is consistent with the objectives and policy guidelines

of the client or institution is the third step in the investment management process. Portfolio

strategies can be classified as either active strategies or passive strategies. Essential to all active

strategies are expectations about the factors that are expected to influence the performance of an

asset class. For example, with active equity strategies this may include forecasts of futures

earnings, dividends or price-earnings ratios. With active fixed income

Portfolios this may involve forecasts of future interest rates, future interest rate volatility

or future yield spreads. Active portfolio strategies involving foreign securities will require

forecasts of future exchange rates.

Passive strategies involve minimal expectation input. The most popular type of passive

strategy is indexing. The objective in indexing is to replicate the performance of a predetermined

index. While indexing has been employed extensively in the management of equity portfolios,

the use of indexing for managing fixed income portfolios is a relatively new practice.

Between these extremes of active and passive strategies have sprung strategies that have

elements of both. For example, the core of a portfolio may be indexed with the balance managed

actively. Or a portfolio may be primarily indexed but employ low risk strategies to enhance the

indexed return. This strategy is commonly referred to as enhanced indexing or indexing

plus.

In the fixed income area, several strategies classified as structured portfolio strategies

have been commonly used. A structured portfolio strategy is one in which a portfolio is designedso as to achieve the performance of some predetermined benchmark. These strategies are

frequently used in funding liabilities. When the predetermined benchmark is to have sufficient

funds to satisfy a single liability regardless of the course of future interest rates, a strategy known

as immunization is used. When the predetermined benchmark is multiple future liabilities that

must be funded regardless of how interest rates change, the strategy that can be used is

immunization or cash flow matching.

Even within the immunization and cash flow matching strategies, low risk active

management strategies can be employed. One immunization strategy, contingent immunization,

allows the portfolio manager to actively manage a portfolio until Certain parameters are realized.If those parameters are realized, the portfolio is then immunized.

Indexing can be considered a structured portfolio strategy where the benchmark is to achieve the

performance of some predetermined index. Portfolio insurance strategies, where the objective is

to ensure that the value of the portfolio does not fall below a predetermined amount is also

viewed as a structured portfolio strategy.


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4. Selecting Assets:

Once a portfolio is selected, the next main step is the selection of

the specific assets to be included in the portfolio. It is in this phase that financial theory tells us

the investment manager attempts to construct an optimal or efficient portfolio. An optimal or

efficient portfolio is one that provides the greatest expected return for a given level of risk, or

equivalently, the lowest risk for a given expected return.

5. Measuring and Evaluating Performance:

The measurement and evaluation of investment performance is the last step in the

investment management process. (Actually, it is improper to say that it is the last step since

investment management is an ongoing process.) This step involves measuring the performance

and then evaluating that performance relative to some realistic benchmark.

While the performance of a portfolio manager when compared to some benchmark may

demonstrate superior performance, this does not necessarily mean that the portfolio satisfied its

investment objective.

For example, suppose that a life insurance company establishes as its objective

maximization of Portfolio returns and allocates 75% of the fund to stocks and the balance to

bonds. Suppose further that the portfolio manager responsible for the equity portfolio of this

pension fund earns a return over a one year horizon that is 4% higher than the Standard & Poors

500 stock index (a benchmark used to evaluate equity performance). Assuming that the risk ofthe portfolio was similar to that of the S&P 500, it would appear that the portfolio manager

performed well. However, suppose in spite of this performance the life insurance company

cannot meet its liabilities. The failure was in establishing the investment objectives and setting

policy, not with the manager responsible for managing the portfolio.


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Types Of Investment Avenues:

1. Life Insurance:Life insurance is a contract for payment of a sum of money to the person assured (or to

the person entitled to receive the same) on the happenings of event insured against. Usually the

contract provides for the payment of an amount on the date of maturity or at specified dates at

periodic intervals or if unfortunate death occurs. Among other things, the contracts also provide

for the payment of premium periodically to the corporation by the policy holders. Life insurance

eliminates risk. The major advantages of life insurance are given below:

Protection:

Saving through life insurance guarantees full protection against risk of death of the saver.

The full assured sum is paid, whereas in other schemes only the amount saved is paid.

Easy payments:For the salaried people the salary savings schemes are introduced. Further, there is an easy

installment facility method of payment through monthly, quarterly, half yearly or yearly mode.

Liquidity:Loans can be raised on the security of the policy.

Tax relief:Tax relief in Income Tax and Wealth Tax is available for amounts paid by way of premium for

life insurance subject to the tax rates in force.

2. Mutual Funds:Investment companies or investment trusts obtain funds from large number of investors

through sale of units. The funds collected from the investors are placed under professional

management for the benefit of the investors. The mutual funds are broadly classified into open-

ended scheme and close-ended scheme.


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Open-ended scheme:

The open-ended scheme offers its units on a continuous basis and accepts funds from

investors continuously. Repurchase is carried out on a continuing basis thus, helping theinvestors to withdraw their money at any time. In other words, there is an uninterrupted entry

and exit into the funds. The open-end scheme has no maturity period and they are not listed in

the stock exchanges. Investor can deal directly with the mutual fund for investment as well as

redemption. The open-ended fund provides liquidity to the investors since the repurchase

facility is available. Repurchase price is fixed on the basis of net asset value of the unit. In 1998

the open-ended schemes have crossed 80 in number.

Closed-ended funds:The close-ended funds have a fixed maturity period. The first time investments are

made when the close end scheme is kept open for a limited period. Once closed, the units are

listed on a stock exchange. Investors can buy and sell their units only through stock

exchanges. The demand and supply factors influence the prices of the units. The investors

expectation also affects unit prices. The market price may not be the same as the net asset

value.

Sometimes mutual funds with the features of close-ended and open-ended schemes have

been launched, known as interval funds. They can be listed in the stock exchange or may be

available for repurchase during specific periods at net asset value or relative prices.


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3. Equity Shares:Equity shares are commonly referred to common stock or ordinary shares. Even

though the words shares and stocks are interchangeably used, there is difference between them.

Share capital of a company is divided into a no. of small units of equal value called shares. The

term stock is the aggregate of a members fully paid up shares of equal value merged into one

fund. It is a set of shares put together in a bundle. The stock is expressed in terms of money

and not as many shares. Stock can be divided into fractions of any amount and such fractions

may be transferred like shares.

Equity shares have the following rights according to section 85(2) of the companies act 1956.

1. Right to vote at the general body meetings of the company.2. Right to control the management of the company.3. Right to share in the profits in the firm of dividends and bonus shares.4. Right to claim on the residual after repayment of all the claims in the case of winding of

the company.

5. Right of pre-emption in the matter of issue of new capital.6. Right to apply to court if there is any discrepancy in the rights set aside.7. Right to receive a copy of the statutory report, copies of annual accounts along with

audited report.

8. Right to apply the central government to call an annual when a company fails to call sucha meeting.

9. Right to apply the Company Law Board for calling an extraordinary general meeting.


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In a limited company the equity shareholders are liable to pay the companys debit only

to the extent of their share in the paid up capital. The equity shares have certain advantages. The

main advantages are

Capital Appreciation Limited liability Free tradability Tax advantages (in certain cases) and Hedge against inflation.

4. Bonds:Bond is a long term debt instrument that promises to pay a fixed annual sum as interest

for specified period of time.

The basic features of the bond are given below.

1) Bonds have face value. The face value is called par value. The bonds may be issued atpar value or at discount.

2) The interest rate is fixed sometimes it may be variable at as in the case of floating ratebond. Interest is paid semi-annually or annually. The interest rate is known as coupon

rate. The interest rate is specified in the certificate.

3) The maturity date of the bond is usually specified at the issue time except in the case ofperpetual bonds.

4) The redemption value is also stated in the bonds. The redemption value may at par valueor at premium.

5) Bonds are traded in the stock market. When they are traded the market value may be atpar or at premium or at discount. The market value and redemption value need not be the

same.


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The different bonds are:

Secured bonds and unsecured bonds Perpetual bonds and redeemable bonds Fixed interest rate bonds and floating interest bonds Zero coupon bonds Deep discount bonds Capital indexed bonds

Debentures:

According to Companies Act 1956 debenture includes debenture stock, bonds and

any other securities of company, whether constituting a charge on the assets of the

company or not. Debentures are generally issued by the private sector companies as a

long-term promissory note fro raising loan capital. The company promises to pay interest

and principal as stipulated. Bond is an alternative form of debenture in India. Public

sector companies and financial institutions issue bonds. Some of the characteristic

features of debentures are from it is given in the form of certificate of indebtedness by the

company specifying the date of redemption and interest rate.

Interest:The rate of interest is fixed at the time of issue itself which is known as contractual or

coupon rate of interest. Interest is paid as a percentage of the par.

RedemptionAs earlier the redemption date would be specified in the issue itself. The maturity

period may range from 5 years to 10 years in India. They may be redeemed in installments.Redemption is done through a creation of sinking fund by the company. A trustee In charge

of the fund buys the debentures either from the market or owners. Creation of the sinking

fund eliminates the risk of facing financial difficulty at the time of redemption because

redemption requires huge sum.


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Buy back provisions help the company to redeem the debentures at a special price before the

maturity date. Usually the special price is higher than the par value of the debenture.

IndentureIt is a trust deed between the company issuing debenture and the debenture trustee who

represents the debenture holders. The trustee takes the responsibility of protecting the interest

of the debenture holders and ensures that the company fulfills the contractual obligations.

Financial institutions, banks, insurance companies or firm attorneies act s trustees to the

investors. In the indenture the terms of the agreement, description of debentures, rights if the

debenture holders, rights of the issuing company and the responsibilities of the company are

specified clearly. Debentures are classified on the basis of the security and convertibility as

1) Secured or unsecured2) Fully convertible debenture3) Partly convertible debenture4) Non-convertible debenture

5. Real Estate:The real estate market offers a high return to the investors. The word real estate means

land and buildings. There is a normal notion that the price of the real estate has increased by

more than 12 percent over the past ten years. The population growth and the exodus of people

towards the urban cities have made the prices to increase manifold. Recently, the recession in the

economy has affected the real estate. Prices marked a substantial fall in 1998 from the 1997

prices. Reasons for investing in real estate are given below:

High capital appreciation compared to gold or silver particularly in the urban area. Availability of loans for the construction of houses. The 1999-2000 budget provides huge

incentives to the middle class to avail of housing loans. Scheduled banks now have to

disburse 3 percent of their incremental deposits in housing finance.


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Tax rebate is given to the interest paid on the housing loans. Further Rs.75, 000 tax rebateon a loan upto Rs.5 lakhs which is availed of after April 1999.

If an investor invests in a house for about Rs.6-7lakh, he provides a seed capital of aboutRs.1-2 lakh. The Rs.5 lakh loan, which draws an interest rate of 15 percent, will work outto be less than 9.6 percent because of the Rs.75,000 exempted from tax annually. In

assessing the wealth tax, the value of the residential home is estimated at its historical

cost and not on its present market value.

The possession of a house gives an investor a psychologically secure feeling and astanding among his friends and relatives.

Apart from making investment in the residential houses, the people in the higher

income bracket invest their money in time share plans of the holiday resorts and land situated

near the city limit with the anticipation of a capital appreciation. Farm houses and plantations

also fall in the line. In spite of the fast capital appreciation investors generally do not invest in

the real estate apart in the real estate apart from owning one or two houses. The reasons are:

Requirement of huge capital: To purchase a land or house in the urban area, the investorneeds money in lakhs whereas he can buy equity, gold or other from of investment by

investing thousands of rupees.

Malpractices: often-gullible investors become cheated in the purchase of land. Theproperties already sold are resold to the investors. The investor has to lose the hard-

earned money.

Restriction of the purchase: The land ceiling Act restricts the purchase of agriculture landbeyond a limit.

Lack of liquidity: If the investor wants to sell the property, he cannot immediately realizethe money. The waiting period may be months or years.


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The points to be taken care of while purchasing the real estate are:

The plots should be approved by the local authority because on the un approved layoutconstruction of a house is not permitted.

Possibility of capital appreciation. It depends upon the locality and facilities of the site.

Originality of title deeds. The site should be free from encumbrance. Encumbrancecertificate for a minimum period of latest 15 years should be got from the registrars

office.

Plinth area should be verified.

Earliest records of securities trading in India are available from the end of

eighteenth century. Before 1850 there was business conducted in Mumbai in the share of bank

and the securities of east India Company, which were consider as securities for buying, selling

and exchange. The share of commercial bank, mercantile bank and bank of Bombay were some

of the prominent shares traded. The business was conducted under a sprawling banyan tree in

front of the town hall, which is known as horniman Circle Park.In 1850, the companies act was

passed and that heralded the commencement of join stock companies in India.

It was the American civil war that helped Indians to established broking business. The

leading broker, Shri Premchand Roichand designed and developed a procedure to be followed

while dealing in shares. In 1874 the dalal street became the prominent place for meeting of the

brokers to conduct business. The broker organized an association on 9th

July 1875 known asnative share and stock broker association to protect the character, status of the native brokers.

That was the foundation of the stock exchange, Mumbai.


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The exchange was established with 318 members. The stock exchange, Mumbai did not

have to look back as it started raiding high ladder of growth. The stock exchange is a market

place, like any other centralize market where buyers and sellers can transact business in

securities at given point of a time in a convenient and competitive manner at the fairest possibleprizes.

In Jan 1899, Mr. James M Mac Len, MP inaugurated the brokers hall. After the first

world war the stock exchange was housed properly at an old building near the Town hall in1928,

the present premises where acquired surrounded by Dalal street, Mumbai samachar marg and

hamam street. A new building a present location was constructed and was occupied on 1st

Dec

1930.In 1950 the regulation of business in securities and stock exchange became an exclusively

central Government sub following adaptation of constitution of India. In 1956, the security

contract act was passed by the parliament of India. to regulate the securities market, SEBI was

initial established on Oct 12 1988 as an interim board under control of ministry of finance,

Government of India. In 1992, SEBI act was passed through which the SEBI came into

existence.

Hence SEBI acquired statutory status on 30th Jan 1992 by passing an ordinance, which

was subsequently converted into an act passed by the parliament on April 4th 1992. The main

objective of SEBI is to protect the interest of investor, regulate and promote the capital market

by creating an environment, which would facilitate mobilization of resources through efficient

allocation and to generate confidents among the investor.

As such SEBI is responsible for regulating stock exchanges and other

intermediaries who may be associated with capital market and the process of the public

companies rising capital by issuing instrument that will be traded on capital market. SEBI

has been empowered by the central government to develop and regulate capital markets

in India and there by protect the interest of investors.In 1992, OTCI (Over the counter

exchange of India) came in to existent where equities of small companies are listed.


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In 1994, NSE(national stock exchange) came into existent which brought an and

to the open but cry system of trading securities which was in vogue for 150 years, and

introduced screen based trading system.

BSE (Bombay stock exchange) online trading system was launched on March 14th

1995.

Online trading can be done who are authorized by the stock exchange.

In screen based trading, investor place there buy and sale orders with brokers whose enter

the orders in the automated trading system. When buy and sale order matches, a trade is

generated and trade details are given to respective brokers. After a trade has taken place, the

buyer as to pay money and seller has to deliver the securities.

On the stock exchange hundred & thousands of trades take place every day.

Buyers and sellers are spread over a large geographical area. Due to these problems completing a

trade by paying cash to the seller & securities to buyer immediately on execution of trades on an

individually basis is virtually impossible. So the exchange allows trading to take place for a

specified period which is called trading cycle.

A unique settlement number identifies each trading cycle. Once the trading period is

over, buyer broker pays money and seller broker delivers securities to the CC/CH on a

predefined day. This process is called as pay in, after pay in securities are given to the buyer

brokers and money is given to seller brokers by the CC/CH, this process is called as pay out.

This process of pay in & pay out is called settlement.

Initially the trading cycle was of one fortnight, which was reduced to one week. The

transactions entered during this period, of a fortnight or one week, were used to be settled either

by payment for purchase or by delivery of shares certificates sold on notified days one fortnight

or one week of expiry of the trading. The settlement schedules are made known to the members

of the exchange in advance.


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The weekly settlement period was reduced by daily settlement popularly known as rolling

settlement, in which each day is separate trading day. With effect from December 2001, t+%

rolling settlement cycle was introduced for all equities where T is the trading day and pay in &

pay out for the settlement was done on the 5th

business day after the trade day. For e.g.

If T was Monday, the pay-in & pay-out were done o next Monday as Saturday &

Sunday are not counted as business days. T+5 cycles were further shortened to T+3 settlement

cycle from April 1st

2002 and T+2 from April 2003.


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National Stock Exchange (NSE)

With the liberalization of the Indian economy, it was found inevitable to lift the Indian

stock market trading system on par with the international standards. On the basis of therecommendations of high powered Pherwani Committee, the National Stock Exchange was

incorporated in 1992 by Industrial Development Bank of India, Industrial Credit and Investment

Corporation of India, Industrial Finance Corporation of India, all Insurance Corporations,

selected commercial banks and others.

Trading at NSE can be classified under two broad categories:

(a) Wholesale debt market and

(b) Capital market.

Wholesale debt market operations are similar to money market operations - institutions

and corporate bodies enter into high value transactions in financial instruments such as

government securities, treasury bills, public sector unit bonds, commercial paper, certificate of

deposit, etc.

There are two kinds of players in NSE:

(a) Trading members and

(b) Participants.

Recognized members of NSE are called trading members who trade on behalf ofthemselves and their clients. Participants include trading members and large players like banks

who take direct settlement responsibility.


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Trading at NSE takes place through a fully automated screen-based trading mechanism

which adopts the principle of an order-driven market. Trading members can stay at their offices

and execute the trading, since they are linked through a communication network.

The prices at which the buyer and seller are willing to transact will appear on the screen.

When the prices match the transaction will be completed and a confirmation slip will be printed

at the office of the trading member.

NSE has several advantages over the traditional trading exchanges. They are as follows:

NSE brings an integrated stock market trading network across the nation.

Investors can trade at the same price from anywhere in the country since inter-marketoperations are streamlined coupled with the countrywide access to the securities.

Delays in communication, late payments and the malpractices prevailing in thetraditional trading mechanism can be done away with greater operational efficiency and

informational transparency in the stock market operations, with the support of total

computerized network.

Unless stock markets provide professionalized service, small investors and foreign investors will

not be interested in capital market operations. And capital market being one of the major sources

of long-term finance for industrial projects, India cannot afford to damage the capital market

path. In this regard NSE gains vital importance in the Indian capital market system.


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The OrganizationThe National Stock Exchange of India Limited has genesis in the report of the High

Powered Study Group on Establishment of New Stock Exchanges, which recommended

promotion of a National Stock Exchange by financial institutions (FIs) to provide access to

investors from all across the country on an equal footing. Based on the recommendations, NSE

was promoted by leading Financial Institutions at the behest of the Government of India and was

incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the

country.

On its recognition as a stock exchange under the Securities Contracts (Regulation) Act,

1956 in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment

in June 1994. The Capital Market (Equities) segment commenced operations in November 1994

and operations in Derivatives segment commenced in June 2000.

NIFTY: The Nifty is relatively a new comer in the Indian market. S&P CNX Nifty is a 50 stock

index accounting for 23 sectors of the economy. It is used for purposes such as benchmarkingfund portfolios, index based derivatives and index funds.

The base period selected for Nifty is the close of prices on November 3, 1995, which

marked the completion of one-year of operations of NSEs capital market segment. The base

value of index was set at 1000.

S&P CNX Nifty is owned and managed by India Index Services and Products Ltd.

(IISL), which is a joint venture between NSE and CRISIL. IISL is a specialized company

focused upon the index as a core product. IISL have a consulting and licensing agreement with

Standard & Poors (S&P), who are world leaders in index services.


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BSE (Bombay Stock Exchange)

The Bombay Stock Exchange, is the oldest stock exchange in Asia, was established in

1875 as the Native Share and Stock Brokers Association at Dalal Street in Mumbai. A lot has

changed since then when 318 persons became members upon paying Re 1.

In 1956, the BSE obtained recognition from the Government of India- the first stock

exchange to do sounder the Securities Contracts (Regulation) Act, 1956.The Sensex, first

compiled in 1986, is a Market Capitalization- Weighted Index of 30 component stocks

representing a sample of large and financially sound companies. The BSE- Sensex is the

benchmark index of the Indian capital markets.The BSE Sensex comprises these 30 stocks:

ACC, Bajaj Auto, Bharti Tele, BHEL, Cipla, Dr Reddys, Gujarat Ambuja, Grasim, HDFC,

HDFC Bank, Hero Honda, Hindalco, HLL, ICICI Bank, Infosys, ITC, L&T, Maruti, NTPC,

ONGC, Ranbaxy, Reliance, Reliance Energy, Satyam, SBI, Tata Motors, Tata Power, TCS and

Wipro. Heres a timeline on the rise of the SENSEX through Indian stock market history.

SENSEX - THE BAROMETER OF INDIAN CAPITAL MARKETS

Introduction:

For the premier Stock Exchange that pioneered the stock broking activity in India, 128

years of experience seems to be a proud milestone. A lot has changed since 1875 when 318

persons became members of what today is called "The Stock Exchange, Mumbai" by paying a

princely amount of Re1.

Since then, the country's capital markets have passed through both good and bad periods.

The journey in the 20th century has not been an easy one. Till the decade of eighties, there was

no scale to measure the ups and downs in the Indian stock market. The Stock Exchange, Mumbai

(BSE) in 1986 came out with a stock index that subsequently became the barometer of the Indian

stock market.


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SENSEX is not only scientifically designed but also based on globally accepted

construction and review methodology. First compiled in 1986, SENSEX is a basket of 30

constituent stocks representing a sample of large, liquid and representative companies. The base

year of SENSEX is 1978-79 and the base value is 100. The index is widely reported in both

domestic and international markets through print as well as electronic media.

The Index was initially calculated based on the "Full Market Capitalization"

methodology but was shifted to the free-float methodology with effect from September 1, 2003.

The "Free-float Market Capitalization" methodology of index construction is regarded as an

industry best practice globally. All major index providers like MSCI, FTSE, STOXX, S&P and

Dow Jones use the Free-float methodology.Due to is wide acceptance amongst the Indian

investors; SENSEX is regarded to be the pulse of the Indian stock market.

As the oldest index in the country, it provides the time series data over a fairly long

period of time (From 1979 onwards). Small wonder, the SENSEX has over the years become one

of the most prominent brands in the country.The growth of equity markets in India has been

phenomenal in the decade gone by. Right from early nineties the stock market witnessed

heightened activity in terms of various bull and bear runs. The SENSEX captured all these events

in the most judicial manner. One can identify the booms and busts of the Indian stock market

through SENSEX.


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2.COMPANY PROFILE

Anand Rathi is a leading full service investment bank founded in 1994 offering a wide

range of financial services and wealth management solutions to institutions, corporations, high

net worth individuals and families. The firm has rapidly expanded its footprint to over 350

locations across India with international presence in Dubai, Hong Kong & New York. Founded

by Mr. Anand Rathi and Mr. Pradeep Gupta, the group today employs over 2,500 professionals

throughout India and its international offices.

The firms philosophy is entirely client centric, with a clear focus on providing

long term value addition to clients, while maintaining the highest standards of excellence, ethics

and professionalism. The entire firm activities are divided across distinct client groups:Individuals, Private Clients, Corporates and Institutions. Anand Rathi has been named The Best

Domestic Private Bank in India by Asiamoney in their Fifth Annual Private Banking Poll 2009.

The firm has emerged a winner across all key segments in Asiamoneys largest survey of high

net worth individuals in India.

In year 2007 Citigroup Venture Capital International joined the group as a financial

partner.Their research expertise is at the core of the value proposition that they offer to their

clients. Research teams across the firm continuously track various markets and products. Theaim is however common - to go far deeper than others, to deliver incisive insights and ideas and

be accountable for results. AR research processes incorporate quantitative areas well as

qualitative analyses. This multi-pronged approach helps them to provide superior risk- adjusted

returns for their clients.






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Their research expertise is at the core of the value proposition that we offer to their

clients. Research teams across the firm continuously track various markets and products. The

aim is however common - to go far deeper than others, to deliver incisive insights and ideas and

be accountable for results. AR research processes incorporate quantitative areas well asqualitative analyses. This multi-pronged approach helps us to provide superior risk- adjusted

returns for their clients. AR analysts provide objective and decisive research that is designed to

enable clients to make informed investment decisions. The team covers entire spectrum of

financial markets from equities, fixed income, and commodities to currencies. They also cover

the global markets, to give clients an unparalleled macro-view of the investment opportunities

across the globe.

Vision:

To be a shining example as a leader in innovation and the first choice for clients and

employees

Mission statement:

Anand Rathi is a premier consultancy firm launched with the belief in Team Work aimed with

the following missions;

To be amongst the top 5 service providers of financial services. Adding tangible value to clients. Serving clients with the highest standards of excellence, ethics and professionalism.

Milestones

1994:

* Started activities in consulting and Institutional equity sales with staff of 15.


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1995:

* Set up a research desk and empanelled with major institutional investors.

1997:

*Introduced investment banking businesses

* Retail brokerage services launched

1999:

*Lead managed first IPO and executed first M & A deal

2001:

*Initiated Wealth Management Services

2002:

*Retail business expansion recommences with ownership model

2003:

* Wealth Management assets cross Rs1600 crores

* Insurance broking launched

* Launch of Wealth Management services in Dubai

* Retail Branch network exceeds 50

2004:

* Commodities brokerage and real estate services introduced

* Wealth Management assets cross Rs3000crores

* Institutional equities business relaunched and senior research team put in place

* Retail Branch network expands across 100 locations within India

2005:

* Real Estate Private Equity Fund Launched

* Retail Branch network expands across 200 locations within India


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2006-07:

* AR Middle East, WOS acquires membership of Dubai Gold & Commodity Exchange

(DGCX)

* Ranked amongst South Asia's top 5 wealth managers for the ultra-rich by Asia Money

2007poll

* Ranked 6th in FY2006 for All India Broker Performance in equity distribution in the High

Net worth Individuals (HNI) Category

* Ranked 9th in the Retail Category having more than 5% market share

* Completes its presence in all States across the country with offices at 300+ locations within

India.

2008-09

* Citigroup Venture Capital International picks up 19.9% equity stake

* Retail customer base crosses 100 thousand

* Establishes presence in over 350 locations.

CORE STRENGTHS

Single-mindedly research driven. Distinguished for transparency in execution and settlement practices Professional to the core. A comprehensive range of services that are aimed at building robust relationships.


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COMPANY AT A GLANCE

Name of the company: Anandrathi Financial Services Limited.

Branch manager: Mr Bakhtiyarkhan M Pachapur

Company Address: 103108, A Block

Kundagol Complex,

Court circle, Hubli - 589929

Telephone No: +91 836 425 9200

Website: www.anandrathi.com

Man Power: 15 People.

Working Hours: 8.30am to 7pm.

Weekly Holiday: Sunday.

Achievements & Awards: business HAWK award broking(equity and commodities)

COMPETITORS

Kotak Securities Indiabulls Sherkhan Share Brokers Karvy securities JRG Motilal Oswal ICICI Direct.com HDFC Investments Religare


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Products and Services

A product for every need Anandrathi is the company, which allows you to invest in

Shares, Mutual funds, Derivatives (Futures and Options) and other financial products. The

company offers a product for every investment, the customers need.

1. Trading in shares:

Anandrathi offers you various options while trading in shares.

Cash Trading:

This is a delivery based trading system, which is generally done with the intention of taking

delivery of shares or monies.

Margin Trading:

Customers can also do an intra-settlement trading up to 3 to 4 times of their available funds,

wherein customers take long buy/ short sell positions in stocks with the intention of squaring

off the position within the same day settlement cycle.

Margin PLUS Trading:

Through Margin PLUS customers can do an intra-settlement trading up to 25 times of their

available funds, wherein customers take long buy/ short sell positions in stocks with the

intention of squaring off the position within the same day settlement cycle. Margin PLUS will

give a much higher leverage in customers account against their limits.

Spot Trading:

This facility can be used only for selling the demat stocks which already exist in the customers

demat account. When customers are looking at an immediate liquidity option, 'Cash on Spot'

may work the best, On selling shares through "cash on spot", money is credited to customers

bank a/c the same evening & not on the exchange payout date.


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BTST:

Buy Today Sell Tomorrow (BTST) is a facility that allows the customers to sell shares even on

1st and 2nd day after the buy order date, without having them to wait for the receipt of shares

into their Demat account.

Trading on NSE/BSE:

Through Anandrathi, customers can trade on NSE as well as BSE.

Market Order:

Customers could trade by placing market orders during market hours that allows them to trade

at the best obtainable price in the market at the time of execution of the order.

Limit Order:

Allow customers to place a buy/sell order at a price defined by them. The execution can happen

at a price more favorable than the price, which is defined by them, limit orders can be placed by

customers during holidays & non-market hours too.

2. TRADE IN DERIVATIVES:

FUTURES:

Through Anandrathi, customers can now trade in index and stock futures on the NSE. In futures

trading, customers take buy/sell positions in index or stock(s) contracts having a longer contract

period of up to 3 months. Trading in FUTURES is simple! If, during the course of the contract

life, the price moves in your favor (i.e. rises in case you have a buy position or falls in case you

have a sell position), you make a profit.

Presently only selected stocks, which meet the criteria on liquidity and volume, have been

enabled for futures trading.


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OPTIONS:

An option is a contract, which gives the buyer the right to buy or sell shares at a specific

price, on or before a specific date. For this, the buyer has to pay to the seller some money,

which is called premium. There is no obligation on the buyer to complete the transaction if theprice is not favorable to himTo take the buy/sell position on index/stock options, customers

have to place certain % of order value as margin. With options trading, they can leverage on

their trading limit by taking buy/sell positions much more than what they could have taken in

cash segment.

The Buyer of a Call Option has the Right but not the Obligation to Purchase the

Underlying Asset at the specified strike price by paying a premium whereas the Seller of the

Call has the obligation of selling the Underlying Asset at the specified Strike price.

The Buyer of a Put Option has the Right but not the Obligation to Sell the Underlying

Asset at the specified strike price by paying a premium whereas the Seller of the Put has the

obligation of buying the Underlying Asset at the specified Strike price.

By paying lesser amount of premium, customers can create positions under OPTIONS

and take advantage of more trading opportunities.

3. Investing in Mutual funds:

Anand Rathi offer lump sum investment plans as well as systematic investment plans of

all Mutual Fund ouses to our customers Lump sum Investment:

4. IPOs and Bonds Online:

Customers could also invest in Initial Public Offers (IPOs) and Bonds online without

going through the hassles of filling ANY application form/ paperwork.

Get in-depth analyses of new IPOs issues (Initial Public Offerings), which are about to hit the

market and analysis on these. IPO calendar, recent IPO listings, prospectus/offer documents,

and IPO analysis are few of the features, which help you, keep on top of the IPO markets.


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5. Insurance:

Anand Rathi also offers various insurance products of the companies like birla sun life

insurance, ICICI prudential, kotak life insurance and many more. These insurance products

offer the customers tax benefit, life coverage and also good returns. The products are sold as per

analyzing the needs of the customers.


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3 EQUITY MARKETIntroduction:

Investing in equity, which offers returns that are higher than the inflation rate, helps you

build wealth and improve your standard of living. The risk involved with investing in equity can

be moderated by careful stock selection and close monitoring.

What is equity?

Acquiring equity shares of a company signifies ownership in that company to the extent of

shares that you have acquired.

Equity Shares:

Equity shares are commonly referred to common stock or ordinary shares. Even though

the words shares and stocks are interchangeably used, there is difference between them. Share

capital of a company is divided into a no. of small units of equal value called shares. The term

stock is the aggregate of a members fully paid up shares of equal value merged into one fund. It

is a set of shares put together in a bundle. The stock is expressed in terms of money and not as

many shares. Stock can be divided into fractions of any amount and such fractions may be

transferred like shares.

Income from equity investing:

Capital appreciation:

Equity shares of companies are listed and traded on a stock exchange ( BSE or NSE). The

market prices of these shares are continuously moving up or down depending on the interest in

the companys stock, its business potential, etc

Bonus shares:

Company declares a bonus in the ratio of 1:2 (this means it will issue one share for every

two shares you hold) and if you hold 100 shares, you will be entitled to 50 shares as a bonus.


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Rights shares:

Company will offer fresh equity shares to its existing shareholders at a price, which is lower

than the current market price of the share. For instance, if the current market price of the

companys share is Rs 35, it will offer shares at below this price, say Rs 25 .

Investor:

Investor is a person or an organization that invest money in various investment sources

for specific objective. Attitude of investment is different in each alternative. E.g. financial

market have different attitude towards risk and return. Some investors are risk avers, while some

have an affinity of risk. The risk bearing capacity of investor is a function of personal,

economical, environment, and situational factors such as income, family size, expenditure

pattern, and age. A person with higher income is assumed to have higher risk-bearing capacity.

Thus investor can be classified as risk skiers, risk avoiders, or risk bearers

Before making any investment, one must ensure to:

Obtain written documents explaining the investment Read and understand such documents Verify the legitimacy of the investment Find out the costs and benefits associated with the investment Assess the risk-return profile of the investment Know the liquidity and safety aspects of the investment Ascertain if it is appropriate for your specific goals Compare these details with other investment opportunities available Examine if it fits in with other investments you are considering or you have already made Deal only through an authorized intermediary Seek all clarifications about the intermediary and the investment Explore the options available to you if something were to go wrong, and then, if satisfied,

make the investment.


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Sources of study for investors:

A look out for new investment opportunities helps investors to beat the market. There are

many sources from which investors can gather the required information. Such as;

(i)Financial institutions:Corporate house, government bodies and mutual funds are the main source of investment

information. Many of these enterprises have their own website and post investment related

information on their websites.

(ii)Financial market:Stock exchange and regulated bodies also provide useful information to investor to make

there investment decisions. With respect to secondary market, the Securities and Exchange

Board of India uses various modes to promote investors education and takes great effort to

achieve an investor friendly secondary market in India. The Reserve Bank of India also provide

useful information relating to the prevent interest rates and non-banking financial intermediaries

that mobiles money through deposit schemes.

(iii) Financial service intermediaries:These are intermediaries who promote securities among the public. Many of these

intermediaries are the agencies of specific instruments especially tax saving instruments. These

intermediaries offer to share their commission from there concerned organization with the

individual investor thus investor get additional advantages while investing through

intermediaries.

iv) Media:Press sources such as financial news papers, financial magazine, business news channel,

websites etc. provide information related to investment to the public. Besides information on

securities, these sources also provide analysis of information and in certain instance suggest

suitable investment decisions to be made by investor


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Fundamental analysis of various Company:

Before investing in various investment alternatives fundamental analysis is very

necessary. A fundamental analysis believes that analyzing the economy, strength, management,

production, financial status and other related information will help to choose investment avenues

that will outperform the market and provide consistent gain to the investor Fundamental analysis

is the examination of the underlying forces that affect the interests of the economy, industrial

sectors, and companies. It tries to forecast the future movement of capital market using signals

from the economy, industry, company. Fundamental analysis requires an examination of the

market from broader prospective. It also examines the economic environment, industrial

performance, and company performance before taking an investment decision.

(i) Economic Analysis:

The economic analysis aims at determining if the economic climate is conductive and is

capable of encouraging the growth of business sector, especially the capital market. When the

economy expands, most industry groups and companies are expected to benefit and grow andwhen the economy declines, most sectors and companies usually face survival problems. Hence,

to predict scrip prices, an investor has to spend time exploring the forces operating in the overall

economy. Economic analysis implies the examination of GDP, government financing,

government borrowings, consumer durable goods market, non-durable goods and capital goods

market, saving and investment pattern, interest rates, inflation rates, tax structure, foreign direct

investment, and money supply.


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The most used tools for performing economic analysis are:

Gross Domestic Product Monetary policy and liquidity Inflation Interest rate International influences Consumer behaviors

(ii) Industry Analysis:

It is very important to see how the industry to which the company belongs is

faring. Specifics like effect of Government policy, future demand of its products etc. need to be

checked. At times prospects of an industry may change drastically by any alterations in business

environment. For instance, devaluation of rupee may brighten prospects of all export oriented

companies. Investment analysts call this as Industry Analysis. Companies producing similar

products are subset (form a part) of an Industry/Sector. For example, National Hydroelectric

Power Company (NHPC) Ltd., National Thermal Power.Company (NTPC) Ltd., Tata Power

Company (TPC) Ltd. etc. belong to the Power Sector/Industry of India.

Tools for industry analysis:

Cross study of performance of the industry. Industry performance over times Differences in industry risk Prediction about market behaviors, and Competition over the industry life cycle


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(iii) Company Analysis:

Company analysis involved choice of investment opportunities within a specific industry

that consists of several individual companies. How has the company been faring over the past

few years? Seek information on its current operations, managerial capabilities, growth plans, its

past performance vis--vis its competitors etc.

(iv) Financial Analysis:

If performance of an industry as well as of the company seems good, then check, if at the

current price, the share is a good to buy or not. For this, look at the financial performance of the

company and certain key financial parameters Like Earnings per Share (EPS), P/E ratio, current

size of equity etc. for arriving at the estimated future price. This is termed as Financial Analysis.

For that you need to understand financial statements of a company i.e. Balance Sheet and Profit

and Loss Account contained in the Annual Report of a company.

Methodology:

Primary Data:

A questionnaire schedule was prepared and the primary data was collected.

Secondary Data:-

Company website Customer data base Company report Company Books and Records Related websites


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Type of research:

This is a descriptive research where survey method is adopted to collect the primary

information from the investors using different scales as required and the required secondary

information for the analysis.

Sampling Technique:

The sampling technique followed in this study is non-probability convenient sampling.

Simple random techniques are used to select the respondent from the available database. The

research work will be carried on the basis of structured questionnaire. The study is restricted to

the investors of Hubli city only.

Sample Size:

The population being large the survey will be carried among 100 respondents who are the

clients ofAnand Rathi. They will be considered adequate to represent the characteristics of the

entire population.

Tools used for data analysis:

The analysis of data collection is completed and presented systematically with the use of

Microsoft Excel and SPSS:-


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4 DATA ANALYSIS:1. Relationship between income level and investment

Annual income

Frequency PercentValid

PercentCumulative

Percent

Valid Below 150000 40 40.0 40.0 40.0

150001 to

300000

30 30.0 30.0 70.0

300001 to

450000

26 26.0 26.0 96.0

450001 and

above

4 4.0 4.0 100.0

Total 100 100.0 100.0

INTERPRETATION:

From above table we can come to know that the investor whose income is below

150000 has invested more then compare to the other income level.

40

3026

4

Below 150000 150001 to 300000 300001 to 450000450001 and above

Annual income Percent

Annual income Percent


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2. Are you short term investor or long term investor?

Short term investment Long term investment

Both

Are you short term investor or long term investor?

Frequency Percent

Valid

Percent

Cumulative

Percent

short term

investment

16 16.0 16.0 16.0

long term

investment

32 32.0 32.0 48.0

Both 52 52.0 52.0 100.0

Total 100 100.0 100.0

INTERPRETATION:-

The survey reveals that 16% investors invest for short term period. And 32%

investors invest in long term securities. And remaining 52% invest in both . The survey has

shown that most of the investors are investing for both i.e. short and long term.


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3. What is your investment per annum?

Below 25000 50001 to 100000

25001 to 50000 100001 and above

What isyour investment per annum?

Frequency Percent Valid Percent

Cumulative

Percent

Below 25000 38 38.0 38.0 38.0

25001 to 50000 33 33.0 33.0 71.0

50001 to 100000 29 29.0 29.0 100.0

Total 100 100.0 100.0

INTERPRETATION:-

The survey reveals that 38%investors invest below 25000pa, 33%investors invest between

25001 to 50000 and 29% investors invest between 50001 to 100000pa. The survey has shown

that most of the people invest below 25000pa compare to other investment level.


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4.How frequently do you invest?

Daily Weekly Monthly

Quarterly Half yearly yearly

How frequently do you invest?


Cumulative

Percent

Daily 2 2.0 2.0 2.0

Weekly 16 16.0 16.0 18.0

Monthly 28 28.0 28.0 46.0

Quarterly 26 26.0 26.0 72.0

Half yearly 16 16.0 16.0 88.0

Yearly 12 12.0 12.0 100.0

Total 100 100.0 100.0

INTERPRETATION:

From the above graph we come to know that 2% of investors are investing daily. 16%

investors are investing weekly, 28% investors are investing monthly, 26% are investing

quartely, 16% investors are investing half yearly and 12% investors investing yearly. It shows

most of investors are investing money either monthly or quarterly ie 28% & 26%.


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5. Do you personally follow the stock market?

Yes No

Do you personally follow the stock market?


Cumulative

Percent

Valid Yes 56 56.0 56.0 56.0

No 44 44.0 44.0 100.0

Total 100 100.0 100.0

INTERPRETATION:

From the above graph we come to know that 56% of investors personally follow themarket and 44% of investors doesnt follow market personally.


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6. If yes, then how frequently do you watch market?

Daily Twice a week weekly

If yes, then how frequently do you watch market?


Cumulative

Percent

Daily 41 41.0 70.7 70.7

Twice week 11 11.0 19.0 89.7

Weekly 6 6.0 10.3 100.0

Total 58 58.0 100.0

Missing

System 42 42.0

Total 100 100.0

INTERPRETATION:

From the above graph we come to know that 41% of investors personally follow the

market daily and 11% of investors twise a week follow the market and 6% investors follow

the market weekly and 42% investors doesnt follow market personally.


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7. What are your various investment alternatives?

Equity Debentures/Bonds

Real Estat Gold/Silver

PPF Bank Deposits

Mutual Fund Insurance

INTERPRETATION:From the above table it is analyzed that equity is the most preferred

investment avenue among all investment options. Second most preferred investment avenue

among various alternatives are bank deposits.

8. What are the Basis of Investment do you prefer?

What are your various investment alternatives?


Cumulative

Percent

Equity 52 52.0 52.0 52.0

Real estate 8 8.0 8.0 60.0

Gold/silver 10 10.0 10.0 70.0

Bank Deposits 22 22.0 22.0 92.0

Mutual Fund 2 2.0 2.0 94.0

Insurance 6 6.0 6.0 100.0

Total 100 100.0 100.0


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Self Analysis Financial Advice

Brokers Advice Friends/Relatives Advice

Charted Accountant Advice

What are the basis of investment do you prefer?


Cumulative

Percent

Valid Self analysis 24 24.0 24.0 24.0

Financial advise 18 18.0 18.0 42.0

Brokers advise 36 36.0 36.0 78.0

Friends/Relatives advise 20 20.0 20.0 98.0

Chartered accountant 2 2.0 2.0 100.0

Total 100 100.0 100.0

INTERPRETATION:

From this we can come to know 36% investors go through brokres advise and 24% of

investors are self analysis the stocks andn 20% investors take advice from friends/relatives and

18% investors take from financial advisers suggestions and rest from others like chartered

accountants.

9. What are the Source of study do you prefer?

8/3/2019 Sad

sad as hiv project

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