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A PROJECT REPORT ON RISK AND RETURN OF A PORTFOLIO AT KARVY STOCK BROKING LIMITED SUBMITTED BY ADITY ASOPA HINDUSTAN COLLEGE OF SCIENCE AND TECHNOLOGY FARAH, MATHURA Annexure II Declaration 1

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A

PROJECT REPORT

ON

RISK AND RETURN OF A PORTFOLIO

AT

KARVY STOCK BROKING LIMITED

SUBMITTED BY

ADITY ASOPA

HINDUSTAN COLLEGE OF SCIENCE AND TECHNOLOGYFARAH, MATHURA

Annexure II

Declaration

I, Adity ASOPA, hereby declare that the project titled “RISK AND RETURN OF A

PORTFOLIO” is an original work carried out under the guidance of Mrs. Tanu

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Marwah. The report submitted is a bonafide work of my own efforts and has not

been submitted to any institute or published before.

Signature of the student

Name of the student:

ADITY ASOPA

Date: 04TH MARCH 2012

Annexure V

Acknowledgement

At the very outset, it is with a deep sense of gratitude that I acknowledge the able

guidance received from Mrs. Tanu Marwah and other Finance team of Karvy Stock

Broking Limited, during all stages of this project. The project owes much of its work

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to their generative suggestions, illuminating comments, encouragement and

ceaseless patience.

I would like to take the opportunity to thank my HOD Mrs. Riju Agarwal HCST,

Mathura for her guidance and support throughout the study. Her opinions and

experience offered me valuable insights into the study area and gently enhanced the

value of the project.

Last but not the least, my endless appreciation goes to my family who has stood by

my side and gave me moral support whenever I was low and boosted my will power.

I would fail in my duty, if I do not make a special mention of all others who helped me

directly or indirectly in pursuit of this project.

Thank You.

Signature of the student

ADITY ASOPA

Date: 04TH MARCH 2012

Annexure VI

INDEX

Chapter.No. Content Page No

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Chapter 1 Introduction5-6

Chapter 2 Objectives7

Chapter 3Company Profile

8-37

Chapter 4 Introduction (About Project)

38-40

Chapter 5 Research Methodology41-44

Chapter 6 Questionnaire

45-47

Chapter 7Data Collection

Analysis & Interpretation

48-59

BibliographyBooks / Articles referred

Websites referred

60

Chapter 1

Introduction

Investors in equity markets are besieged by risk. At times, in fact, it seems as though

equity investors are more likely to lose money than gain it. In order to address the

perceived risk associated with investing, portfolio risk management was developed.

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Portfolio risk management is a field of economics, finance and statistics that seeks to

help investors manage the risk associated with the investments they make. Portfolio

risk management is largely predicated on the idea that there is some trade-off

between risk and return. Equities with higher levels of risk must also carry higher

returns, in order to compensate owners for undertaking an elevated level of

uncertainty. Portfolio risk management attempts to quantify and manage this risk so

as to better match investments to the needs of investors.

Stock exchanges to some extent play an important role as indicators, reflecting the

performance of the country’s economic state of health. Stock market is a place

where securities are bought and sold. It is exposed to a high degree of volatility;

prices fluctuate within minutes and are determined by the demand and supply of

stocks at a given time. Stockbrokers are the ones who buy and sell securities on

behalf of individuals and institutions for some commission.

The securities and exchange board of India (SEBI) is the authorized body, which

regulates the operations of stock exchange, banks and other financial institutions.

The past performance in the capital market specially the securities scam by Harshad

Mehta has lead to tightening of the operation by SEBI. In addition the international

SEBI and investment expose has made it imperative to better operational efficiency.

With the view to improve, discipline and bring better transparency in this sector,

constant efforts are being made and to ascertain extent improvement have been

made.

As the condition of capital market constantly improving, it has started drawing

attention of lot more people than before. On the career related aspect, professional

opportunities to choose for a wide range of jobs available in the organization in this

sector and one can expect to have good time ahead of him.

In present scenario stock broking sector is provi9ding more service with the basic

investment and karvy have a good financial instruments like Mutual Fund, Demat,

Bond etc. which give the right way to save the money and earn good profit by

invested premium. Today people want more services and more return on their

investment. So this stock broking company is providing more value added services

with basic investment operation.

So this is just into the – part of the project inside I have discuss the definition, market

share and the performance in detail manner. I hope the research work would be

satisfactory an up to the expectation of the reader.

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Chapter 2

OBJECTIVES OF THE STUDY:

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

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

decision maker in solving the problem.

The objectives of the study were as follows-

To identify the factors influencing investment decisions in stocks

market.

To understand the significance given by investors to those factors and

to understand the familiarity of investors with respect to those factors.

To understand how much risk is involved by investing money in stock

market.

What is the relation between Risk and Return.

How much return should an investor require form a given portfolio?

Chapter 3

COMPANY PROFILE

Karvy Consultants Limited was established in 1982 at Hyderabad. It was established

by a group of Hyderabad based practicing Chartered Accountants. At initial stage it

was very small in size. It was started with a capital of Rs 150000.In starting it was

offering only auditing and taxation services. Later it acts into the registrar and Share

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transfer activities and subsequently into financial services and other services like

Financial Product Distribution, Investment Advisory Services, Demat Services,

Insurance etc.

Today Karvy has access to millions of Indian Shareholders, besides companies,

banks, financial institutions and regulatory services. Over the past one and half

decade Karvy has evolved as a veritable link between industry, finance and people.

In January 1998, Karvy became first Depository Participants in Andhra Pradesh. An

ISO 9002 Company. Karvy’s commitment to quality and retail reach has made it an

Integrated Financial Service Company. Today Company has 230 Branch Offices in

164 cities all over India. The Company service over 16 million individual investors,

180 corporate and handle corporate disbursements that exceed Rs.2500 crores.

Karvy is a Asset Management Company:

The role of an AMC is to act as the investment manager of the Trust under the Board

supervision and direction of the Trustees.

The AMC is required to be approved and registered with SEBI.

The AMC of a Mutual Fund must have a net worth of at least Rs. 10 crore at all time.

The AMC cannot act as a trustee of any other Mutual Fund.

They will float schemes only after obtaining the prior approval of the Trustees and

SEBI.

The director of AMC should be a person of reputed of high standing and at least

have five years experience in relevant field.

AMC can be terminated with 75% unit holders or majority of trustees.

WHERE KARVY STAND IN THE MARKET?

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

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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. 

Achievements of Karvy:

Largest mobilizer of funds as per PRIME DATABASE 

First ISO - 9002 Certified Registrar in India 

A Category- I Merchant banker

A Category- I Registrar to Public Issues

Ranked as "The Most Admired Registrar” by MARG

Handled the largest- ever Public Issue - IDBI 

Strategic tie-up with Jardine Fleming India Securities Ltd

Handled over 500 Public issues as Registrars 

Handling the Reliance Account which accounts for nearly 10 million account holders

First Depository Participant from Andhra Pradesh.

Mission Statement of ‘Karvy’

An organization exists to accomplish something or achieve something. The mission

statement indicates what an organization wants to achieve. The mission statement

may be changed periodically to take advantage of new opportunities or respond to

new market conditions.

Karvy’s mission statement is “To Bring Industry, Finance and People together.”

Karvy is work as intermediary between industry and people. Karvy work as

investment advisor and helps people to invest their money same way Karvy helps

industry in achieving finance from people by issuing shares, debentures, bonds,

mutual funds, fixed deposits etc.

Company’s mission statement is clear and thoughtful which guide geographically

dispersed employees to work independently yet collectively towards achieving the

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organization’s goals.

Vision of Karvy Stock Broking Limited

To be the “Category Champion” for Capital Markets and Retail Finance in India.

Company’s vision is crystal clear and mind frame very directed. “To be pioneering

financial services company. And continue to grow at a healthy pace, year after year,

decade after decade.” Company’s foray into IT-enabled services and internet

business has provided an opportunity to explore new frontiers and business

solutions. To build a corporate that sets benchmarks for others to follow. 

Quality Policy of Karvy:

To achieve and retain leadership, Karvy shall aim for complete customer satisfaction,

by combining its human and technological resources, to provide superior quality

financial services. In the process, Karvy will strive to exceed Customer’s

expectations.

Quality Objectives of Karvy

Build in-house processes that will ensure transparent and harmonious relationships

with its clients and investors to provide high quality of services. 

Establish a partner relationship with its investor service agents and vendors that will

help in keeping up its commitments to the customers.

Provide high quality of work life for all its employees and equip them with adequate

knowledge & skills so as to respond to customer's needs. 

Continue to uphold the values of honesty & integrity and strive to establish

unparalleled standards in business ethics.

Use state-of-the art information technology in developing new and innovative

financial products and services to meet the changing needs of investors and clients.

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Strive to be a reliable source of value-added financial products and services and

constantly guide the individuals and institutions in making a judicious choice of

same.

Strive to keep all stake-holders (shareholders, clients, investors, employees,

suppliers and regulatory authorities) proud and satisfied.

Karvy Group Companies

These are as follows-:

Karvy Consultants Limited

Karvy Investor Services Limited 

Karvy Stock broking Limited 

Karvy Computer Shares Pvt. Ltd. 

Karvy realty (India) Pvt Ltd

Karvy globle services Ltd

Karvy data base management services

Karvy comtrade Ltd.

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Karvy Insurance broking Pvt Ltd.

Karvy Consultants Limited.

KARVY STOCK BROKING LIMITED

History.

Karvy Consultants Limited was established in 1982 at Hyderabad. It was established

by a group of Hyderabad-based practicing Chartered Accountants. At initial stage it

was very small in size. It was started with a capital of Rs. 1, 50,000. 

In starting it was only offering auditing and taxation services. Later, it acts into the

Registrar and Share transfer activities and subsequently into financial services and

other services like Financial Product Distribution, Investment Advisory Services,

Demat Services, Corporate Finance, Insurance etc. 

All along, Karvy’s strong work ethics and professional background leveraged with

Information Technology enabled it to deliver quality to the individual. A decade of

commitment, professional integrity and vision helped Karvy achieving a leadership

position in its field when it handled largest number of corporate and retail that proved

to be a sound business synergy.

Today, Karvy has access to millions of Indian shareholders, besides companies,

banks, financial institutions and regulatory agencies. Over the past one and half

decades, Karvy has evolved as a veritable link between industry, finance and

people.

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.

Today, company has 230 branch offices in 164 cities all over the India. The company

adds 5 new offices every month to the company’s ever growing national network in

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every nook and corner of the country. The company service over 16 million individual

investors, 180 corporate and handle corporate disbursements that exceed Rs.2500

Crores.

Company Birth

The birth of Karvy was on a modest scale in 1981. It began with the vision and

enterprise of a small group of practicing Chartered Accountants who founded the

flagship company. Karvy Consultants Limited. We started with consulting and

financial accounting automation, and carved inroads into the field of registry and

share accounting by 1985. Since then, we have utilized our experience and

superlative expertise to go from strength to strength to better our services, to provide

new ones, to innovate, diversify and in the process, evolved Karvy as one of India’s

premier integrated financial service enterprise.

Thus over the last 20 years Karvy has traveled the success route, towards building a

reputation as an integrated financial services provider, offering a wide spectrum of

services. And we have made this journey by taking the route of quality service, path

breaking innovations in service, versatility in service and finally…totality in service.

Our highly qualified manpower, cutting-edge technology, comprehensive

infrastructure and total customer-focus has secured for us the position of an

emerging financial services giant enjoying the confidence and support of an enviable

clientele across diverse fields in the financial world.

Our values and vision of attaining total competence in our servicing has served as

the building block for creating a great financial enterprise, which stands solid on our

fortresses of financial strength - our various companies.

With the experience of years of holistic financial servicing behind us and years of

complete expertise in the industry to look forward to, we have now emerged as a

premier integrated financial services provider.

And today, we can look with pride at the fruits of our mastery and experience –

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comprehensive financial services that are competently segregated to service and

manage a diverse range of customer requirements.

Establishment Year: 1981

Firm Type: Public. Ltd.

Nature of Business : Services

Level to Expand : International

Head office : "Karvy House", 46 Avenue 4, Street No. 1, Banjara

Hills, Hyderabad - 500034, (Andhra Pradesh), India.

Parthasarathy - Managing Director

M Yugandhar - Managing Director

M S Ramakrishna - Director

Stuart Crosby - Chairman

Mark Davis - Director

Chandra Balaraman - Director Overview

Karvy Stock Broking Limited provides stock broking and research advisory services

in India. The company offers portfolio analysis, depository participant, and financial

planning and management services for individuals and institutional clients. It also

provides a monthly magazine, Fin polis, which provides up-dated market information

on market trends, investment options, and opinions. The company was founded in

1990 and is based in Hyderabad, India. Karvy Stock Broking Limited is a subsidiary

of Karvy Consultants Limited. Karvy, is a premier integrated financial services

provider. Karvy covers the entire spectrum of financial services such as

Stockbroking, Depository Participants, Distribution of financial products - mutual

funds, bonds, fixed deposit, equities, Insurance Broking, Commodities Broking,

Personal Finance Advisory Services, Merchant Banking & Corporate Finance,

placement of equity, IPOs, among others.

Values:

1. Integrity

2. Responsibility

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3. Reliability

4. Unity

5. Understanding

6. Excellence

7. Confidentiality

Karvy has adequate internal control systems and procedures commensurate

with the size nature of its business. These system and procedures provide

reasonable assurance of maintenance of proper accounting records, reliability

of financial information, protection of resources and safeguarding of assets

against unauthorized use.

General Information’s of Karvy Stock Broking Ltd.

1. Sales performance

In Rupees – Karvy Stock Broking Ltd generate around 15000 to 20000

revenue in per day basis.

In units – And around 3500 units in monthly basis.

2. Number of Employees

(Section-wise or as per classification like skilled, semiskilled,

unskilled worker, officers, managers, etc.)

The number of Employees in Karvy Stock Broking Ltd since

In 1991 – 676

In 2008 – 7000

In 2010 – 10000, and the organization increases 1000 employees per year in

each and every branch.

Manager – In Karvy Stock Broking Ltd number of manager is one.

Officers - In Karvy Stock Broking Ltd number of officers is three.

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Skilled – At present there are six skilled employees in Karvy Stock Broking Ltd.

Semiskilled – At present there are four semiskilled employees in Karvy Stock

Broking Ltd.

Unskilled worker - At present there are two semiskilled employees in Karvy

Stock Broking Ltd.

3. Detailed Organizational charts

Karvy Stock Broking Ltd. Branch level organization chart

CHAIRPERSON

COUNTRY HEAD

VICE PRESIDENT

EMPLOYEE

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CHAIRPERSON -: In Karvy there is a one chairperson.

COUNTRY HEAD -: One country head.

VICE PRESIDENT -: There are six vice presidents in the six zones,

East

West

North

South

South-East

North-East

Employees of the organization report to the Vice presidents and the Vice president

report to the Country head and lastly Country head submit the final copy of report to

the Chairperson. The overall organizational chart of the Karvy Stock Broking Ltd

shows a vertical format or structure.

National level organization chart

CM & MD

(Hyderabad)

GM GM GM

(Marketing) (Finance) (HRM)

Zonal Manager

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Regional Manager

Branch Mgr. Branch Mgr. Branch Mgr.

Accountant Sr. Executives

Executives

4. Future plans of the company

The future plans of the Karvy Stock Broking Ltd.is try to acquire more

number of customer, and acquisition of Demat & Trading Accounts.

The organaition also plans to do more number of tie up with banks.

5. KARVY Stock Broking Limited is a member of:

National Stock Exchange (NSE)

Bombay Stock Exchange (BSE)

Hyderabad Stock Exchange (HSE)

6. Product, photographs of the product, technical details, etc.

Product:-

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I-ZONE

IPO

VALUE SAVER

Photographs of the product:-

7. COMPETITOR ANALYSIS

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

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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.

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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. 

4. ICICI Securities Ltd.

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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

mostcomprehensive 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

dematservice.

HDFC and its subsidiary provides following services.

Demat Service

Life Insurance

Banking Service

Housing Finance

Vehicle Finance

Education Loan

Personal Loan

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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 (MOSt) is one of the leading equity research and

broking houses of India. MOSt 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 MOSt 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

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8.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 Rise 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

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stationery, brokerage, and information forward to its sub-broker. The sub-brokers

send filled forms, queries, amount of investment etc. back to the company. 

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.

9. HR Policy’s of Karvy Stock Broking Ltd.

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,

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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. E.e. Marketing

executive of Jamnagar branch directly reports Senior Marketing executive of

Baroda zonal office. 

If particular branch earn certain profit then Karvy gives them special

incentives. E.g. last year Karvy had arranged two days tour of Div for their

employees of Rajkot, Jamnagar, Junagadh and Bhavnagar branch which was

totally free of cost. This also helps in maintaining co-operation between

employees. 

10. KARVY SERVICES- AN OVERVIEW:

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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.

1. Stock Broking:

KARVY is working as Capital Market Intermediaries. Stockbrokers are regulated by

SEBI [Stock-brokers and Sub-brokers] Regulations, 1992. The stockbroker is a

member of the stock exchange. Stockbrokers are the intermediaries who are allowed

to trade in securities on the exchange of which they are members. They buy and sell

on their own behalf as well as on behalf of their clients. 

Stockbrokers expand their business by engaging sub-broker. Sub-brokers mean

“any person not being a member of a stock exchange who acts on behalf of a stock

broker as an agent or otherwise for assisting the investors in buying, selling or

dealing in securities through such stock-brokers.”

2. Demat Services:

Karvy is a depository participant with the National Securities Depository Limited

(NSDL) for trading and settlement of dematerialized shares.

Depository Participants (DPs) are described as an agent of the depository. They are

intermediaries between the depository and the investors. The relationship between

the DPs and the depository is governed by an agreement made between the two

under Depositories Act. 

A DP can offer depository-related services only after obtaining a certificate of

registration from SEBI.

Since Karvy is also in the broking business, investors who use Karvy’s depository

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services get a dual benefit. They can use Karvy’s brokerage 

services to execute transactions and Karvy’s depository services to settle them.

3. Investment Products Distribution:

Company is also concern with the distribution of investment products like

(a). Fixed Deposit

(b). Bonds

(c). IPO

(a). Fixed Deposit:

KARVY is dealer of 34 fixed deposits of various types which includes fixed deposits

of Public Sector, Non Banking Finance Companies, Housing Finance Companies

and Manufacturing Companies.

Company is dealer of following Fixed Deposits

PUBLIC SECTOR

1 HUDCO

2 Sardar Sarovar Narmada Nigam Ltd.

3 Tamilnadu Power Finance Corporation Ltd.

4 NTPC

NON BANKING FINANCE COMPANIES

1 Ashok Leyland Finance Ltd.

2 Bajaj Auto Finance Ltd.

3 Birla Home Finance Ltd.

4 Cholamandalam Investment & Finance Co. Ltd.

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5 Escorts Finance Ltd.

6 First Leasing Company of India Ltd.

7 IDBI Suvidha

8 Nicco Uco Alliance Credit Ltd.

HOUSING FINANCE COMPANIES

1 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.

MANUFACTURING COMPANIES

1 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 Express

10 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.

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(b). Bonds:

Karvy is dealer of following bonds

RBI Saving Bonds

NHB

REC

(c). IPO:

Company is also provides services related to Initial Public Offer of company.

Company provides stationary at the time of IPO as well as provides information to

investors regarding IPO and solves their queries.

4. Investment Advisory Services:

This division provides portfolio management services to high net-worth individuals

and corporate. The expertise of Karvy in research and stock broking gives it the right

perspective to provide investment advisory services. Company provides advisory

services to its clients. 

Financial goal of each individual investor varies according to his dream, ambition and

family size and future financial planning for the children & old age pension for self

and wife so does the pathway to achieve it. Karvy apply the principles of Financial

Planning as both science & art, it understands the time horizon, risk bearing capacity

and investment goals of investors keeping in mind their psyche and financial needs.

Based upon this Karvy helps individual investors to plan their entire life up to

retirement, Taxes, Insurance needs and other important personal financial goals. It

designs portfolio for investor to invest their saving in various financial products like

shares, bonds, debentures, mutual funds, fixed deposits, insurance etc., Company

design portfolio by considering following factors.

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Investor’s requirement of getting money back,

Investor’s willingness to take risk,

Investor’s tax planning etc.

5. Corporate finance & Merchant banking: 

Corporate finance is the financial activity of corporation. It deals with the firm's

operations with regard to investing and financing. It concerned with how firms raise

capital and the consequences of alternative methods of raising capital. Firm’s capital

can be raised by raising loans, issuing shares, and acquiring or merging with other

businesses by public or private companies.

Merchant banking is a financial intermediation that matches entities that need capital

and those that have capital. Hence they facilitate the flow of capital in the market.

Karvy enjoys SEBI category (I) authorization for Merchant Banking. Karvy offers the

full spectrum of Merchant Banking Services, beginning from identifying the best time

for an issue to final stage of marketing it, to harvest unparalleled success.

As a merchant banker Karvy offer following services:

Issue management

Instrument designing

Pricing of the issue

Registration process for the issue of shares

Marketing efforts

Final allotment to investors

Listing details on stock exchanges

Loan syndication

Lease financing

Corporate advisory services

Underwriting

Portfolio management

6. Insurance:

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Karvy is also dealer of many private life insurance companies. At Jamnagar branch,

company is associated with dealing of following companies.

ICICI Prudential Life Insurance

HDFC Life Insurance

TATA AIG Life Insurance

7. Mutual Fund Services:

Since its inception in 1982, Karvy has demonstrated a dedication coupled with

dynamism that has inspired trust from various segments – corporate, government

bodies and individuals. Karvy has since been performing a pivotal role as the

intermediary – the interface – between these players. 

With Mutual Funds emerging as a distinct asset class, Karvy has made a strategic

choice to leverage the power of latest technology to provide a cutting edge to its

services. Karvy, today, service nearly 80% of the asset management companies

(AMCs) across an extensive network of service centers with assets under service in

excess of Rs.10,000 crores. 

Karvy's ability to mass customize and offer a diverse range of products for a diverse

range of customers has helped mutual fund companies to uniquely position

themselves in the market place. These diverse range of services cut across multiple

delivery channels – service centers, web, mobile phones, call center – has brought

home the benefits of technology to investors, distributors, and the mutual funds.

Going forward, Karvy shall strive to create new products and services, which would

address the needs of the end customer. Company’s single minded focus in

delivering products for customers has given it the distinguished position of being the

preferred provider of financial services in the country. 

List of Mutual Fund Clients of KARVY:

1 Alliance Mutual Fund

2 Birla Mutual Fund

3 Bank of Baroda Mutual Fund

4 Can Bank Mutual Fund

5 Chola Mutual Fund

6 Deutsche Mutual Fund

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7 DSP Merrill Lynch Mutual Fund

8 Franklin Templeton Investments

9 GIC Mutual Fund

10 HDFC Mutual Fund

11 HSBC Mutual Fund

12 IL & FS Mutual Fund

13 JM Mutual Fund

14 Kotak Mutual Fund

15 LIC Mutual Fund

16 Punjab National Bank Mutual Fund

17 Prudential ICICI Mutual Fund

18 Principal Mutual Fund

19 Reliance Mutual Fund

20 State Bank of India Mutual Fund

21 Standard Chartered Mutual Fund 

22 Sundaram Mutual Fund

23 SUN F&C Mutual Fund

24 Tata Mutual Fund

8. Income Tax enabled services:

Karvy has been started this service since March, 2004. Karvy is work as TIN

Facilitation Centre it provides following IT enabled services.

a. Distribution of PAN Card.

b. Distribution of TAN Card.

c. Services related to e-TDS.

Karvy work as an intermediary between NSDL and IT payers. Karvy provides various

form for different IT enabled services and guide people to fill that forms. It also

solves queries of the tax payers. It also distributes PAN and TAN card to the tax

payers.

9. Registrars & Transfer agents:

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In 1985, Karvy entered the Registrar and Share Transfer Business to create a

market niche in the competitive field of financial services. In 1994-95, it reached a

milestone when it processed 104 Public Issues constituting 46 per cent market

share. Now in its second decade of existence, Karvy is the leader in the industry: In

an opinion poll conducted by an independent market research agency - MARG,

Karvy has been rated as India’s Most Admired Registrar on various parameters: -

Overall Excellence.

Handling of Volumes

Timely Dispatch

Quality Management and Technological Up gradation.

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.

10. Loan:

Karvy has recently started this service at selected branches of metro cities. This

service has not been started in Saurashtra-Kucch region. Karvy provides loans for

following.

Vehicle Loan

Home Loan

Personal Loan.

11. CHARGE SCHEDULE for I Zone

Parameter ICICI Direct Sharekhan Indiabulls Reliance Money

Karvy

First Yr 900 650/- 1200/- 500 650/-

Demat AMC 550 420 415 400 375

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Delivery Brokerage

0.45 TO 0.85%

Rs. 100 minimum charges &0.5 to 0.8%

0.4 to 0.8% top up system

0.30%

Intraday / Futures

0.1 TO 0.45%

0.08% 0.04 to 0.05%

top up system

0.03%

Options Rs. 85 75 rs 85rs top up system

70/-

Margin Trade 6 times 9 times 10 times 10 times 4 times

Demat 2 times 4 times 3 times 3 times No

Upfront brokerage payment

NO 5000 TO 120000 10000 TO 100000

NO NO

Brokerage Negotiable

YES YES YES YES YES

12. Comparision of availability of the Feature.

Comparision of availability of the Feature

Parameter ICICI Direct Sharekhan

Indiabulls Reliance Money

Karvy

Equities, F&O YES YES YES YES YES

Mutual Fund YES NO YES NO YES

IPO NO NO YES NO YES

Market watch screen NO YES YES NO YES

Instant order confirmation NO YES YES NO YES

Live Market news NO YES YES NO YES

Multiple Bank Gateway NO YES YES YES YES

BTST – enabled NO YES YES NO YES

Consolidated Net worth Statement

YES YES YES NO YES

Hidden Charges YES YES YES YES NO

Alerts and Reminders NO NO NO NO YES

Real time Portfolio Valuations

YES YES YES NO YES

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Live Intraday scrip charts NO YES YES NO YES

SMS integration NO YES YES NO YES

Order on phone YES YES YES YES YES

Other statistical information like FII data, MF buying / selling activities etc

NO NO NO NO YES

User friendliness NO YES YES NO YES

Hot keys functionality similar to dealer terminal

NO YES NO NO YES

Exe version for frequent traders

YES NO NO YES NO

Net worth during market hours

NO YES YES NO YES

Personal finance tools NO NO YES NO YES

Extension of current relationship

NO NO NO NO YES

SWOT ANALYSIS OF KARVY

Strengths:

1. Employees are highly empowered.

2. Strong Communication Network.

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3. Good co-operation between employees.

4. Number 1 Registrar and Transfer agent in India.

5. Number 1 dealer of Investment Products in India.

Weaknesses:

1. High Employee Turnover.

Opportunity:

1. Growth rate of mutual fund industry is 40 to 50% during last year and it

expected that this rate will be maintained in future also.

2. Marketing at rural and semi-urban areas.

Threats:

1. Increasing number of local players.

2. Past image of Mutual Fund.

INTRODUCTION OF THE TOPIC

“RISK AND RETURN OF A PORTFOLIO”

Meaning of Risk :

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Risk is the potential that a chosen action or activity (including the choice of inaction)

will lead to a loss (an undesirable outcome). The notion implies that a choice having

an influence on the outcome exists (or existed). Potential losses themselves may

also be called "risks". Almost any human Endeavour carries some risk, but some are

much more risky than others.

Definitions of risk:

A probability or threat of a damage, injury, liability, loss, or other negative occurrence

that is caused by external or internal vulnerabilities, and that may be neutralized

through preemptive action.

The many inconsistent and ambiguous meanings attached to "risk" lead to

widespread confusion and also mean that very different approaches to risk

management are taken in different fields. For example:

The ISO 31000 (2009) /ISO Guide 73 definition of risk is the 'effect of uncertainty on

objectives'. In this definition, uncertainties include events (which may or not happen)

and uncertainties caused by a lack of information or ambiguity. This definition also

includes both negative and positive impacts on objectives.

Another definition is that risks are future problems that can be avoided or mitigated,

rather than current ones that must be immediately addressed.

Risk can be seen as relating to the Probability of uncertain future events For

example, according to Factor Analysis of Information Risk, risk is:the probable

frequency and probable magnitude of future loss.

Meaning of Return:

The profit on, or advantage received from, labour, or an investment, undertaking,

adventure, etc.

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Definition:

The annual return on an investment, expressed as a percentage of the total amount

invested also called rate of return. The yield of a fixed income security. Its same as

tax return.

Relationship between Risk and Return:

Risk and reward are directly related. hypothetically, the riskier the asset, to more

potential reward one expects to gain. the less risky, the less gain.

The higher the risk, the higher the return required. The reverse is also true. The

lower the risk (or the safer the asset) the lower the return.

The explanation is that high returns tend to be achieved in businesses that can't

really provide a predictable flow of inflows. With these investments, you will

frequently feel it, either going up or down (and even going out of business). No one

will invest in these assets if they pretend return a minimal amount. The bank is much

safer and provides that already!

Very safe investments (little risk) don't offer a bumpy ride. They tend to be quite

predictable, offering an almost secure return. This comes at a price. Since you run

minimal risk (the issuer of the asset does run with a lot more risk, but promises you a

rate), the issuer will offer you a lesser return.

"No risk" is generally defined to be the interest rate that a secure and stable

government will pay you for loaning money. For example, if you invest in treasury

bills from the US Government they give you a certain rate of interest, or if you put

your money in a bank Certificate of deposit they give you interest.

This is defined as a "no risk" investment because you are "guaranteed" to get

your money back plus the interest.

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In other form of investment will contain a risk that is defined against the

benchmark of a "no risk" investment. These types of investment are more risky

(because they do not have the security or stability that a national government

may have). Some are "mildly risky," others are "very risky."

As an investor, if you invest in a risky endeavor, you expect that should the

investment work out, you better receive a higher payoff than if you were to simply

put your money into a bank. Otherwise there's no point in investing in risky stuff.

Therefore, the riskier the venture, the higher the potential return. Note the word

"potential."

High return is not guaranteed. It just means that the "highest return" you could

expect from the investment, will be better than what you would get by depositing

the money in a bank and collecting interest.

RESEARCH METHODOLOGY

Research methodology has multiple dimensions. Research Methodology is a way to

systematically solve the research problems scientifically. The importance of

knowledge of research methodology and how the research is done stems from the

following considerations:

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1. Primary Data.

2. Secondary Data.

(A) Research Plan:

1. Primary data:

The primary data constitute an integral part of the market research

information and which are based on the followings.

i. Observations and Findings

ii. Interviewing

The primary data has been collected through questionnaire survey.

(B) Area of Survey:

The area selected for my research study is Agra. I have selected some

residential and market area. The following factors kept in mind while

conducting the survey:

i. The interviewee age between 22 to 55.

ii. The samples are both males and female (70% respondents are

male and 30% of them were females).

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(C) Following things consider during questionnaire:-

It is extremely important to ask the right questions to get the right

information, which serves the purpose.

It is instrumental to measure the level of knowledge, attitude and

behavior of the respondents.

It includes the respondents to co-operate and to answer, which are

trustworthy.

The needs are to be identified to classify the interviewer.

The design of the questionnaire should be simple for the respondents

as well as the interviewer.

RESEARCH DESIGN

1. Types of Study EXPLORATORY RESEARCH

2. Sources of Data SECONDARY DATA

3. Data Collection Mode QUESTIONNAIRE METHOD

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4. Target Respondent SALARIED PEOPLE AND BUSINESSMAN

5. Sample Size 50

6. Sampling Method RANDOM SELECTION.

Sampling procedure: - Respondents for the purpose of survey has been

selected according to my convenience.

Contact Methods: - In the survey the respondents are selected randomly.

I had personally gone to all the respondents and asked them to fill the

questionnaire and if they were not ready to fill, I noted down their response

while interaction with them. I went to the residential areas for direct interaction

with respondents.

Data Collection Method: I have used ‘Survey Method’ to collect data. I

have collected data using questionnaire. 

Questionnaire Plan: I have used ‘Structured Questionnaire’ for gathering

the required data through contacting respondent personally.

Type of Information: I have collected Fact, Awareness, Attitude, Future

action plan and reason using questionnaire.

Type of Questions: ‘Close-ended questions’ or ‘Dichotomous’ and

‘Multiple Choice’ types are asked in the questionnaire for data collection.

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Data Analysis & Interpretation: Data Analysis is based on the data

collected by way of Questionnaires.

QUESTIONNAIRE

Personal Information

1. Name - ____________________________

2. Age -

a) 18- 25 b) 26-40 c) 41-60 d) 61 and above.

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3. Qualification:

a) Undergraduate b) Graduate c) Post Graduate d) Professional Degree

e) Doctorate

4. Occupation:

a) Student b) Service c) Business Man d) House Wife e) Retired

5. Do you want to invest?

a) Yes b) No

6. If “Yes”, then where do you want to invest?

a) Mutual fund b) Share c) Post office saving d) Bank deposit (FD)

e) Others

7. How do you do equity trading?

a) Online b) Offline

8. How long have you been investing in equity trading?

a) 0-1 year b) 1-3 years c) 3-5 years d) More then 5 years.

9. How did you come to know about karvy as a distributor of share and

mutual funds?

a) News Paper b) Relatives and Friends c) Investment Advisors

d) Television e) Internet

10. What is your level of awareness about share investment?

a) Very High b) High c) Low d) Moderate e) Very Low

11. Karvy is more concern about---------------

a) Return to customer b) Client relationship c) Customer needs

d) Their own commission

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12. Would you like to work with Karvy Securities Ltd for dealing in mutual

fund?

a. Yes 

b. No.

13. If no, then the reason would be:

a. Not answered

b. No time 

c. Lack of knowledge

d. No expansion plans.

14. How company is helped to create a Strong Portfolio?

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------

------------------------------------------

15. What additional benefits or services karvy gave to their customers?

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------

-------------------------------------------

16. Is the organization services--------

a) Good.

b) Very Good.

c) Bad

d) Very Bad

e) Not Satisfied

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f) Satisfied.

17. Is organization make aware to their customer for recent market changes-----------

a) Yes

b) No

c) Very Frequent.

18. The new product of karvy “ VALUE SAVER” is effective or not?

a) Effective

b) Not effective.

19. Is karvy provide low broking charges?

a) Yes

b) No

c) Not excetly.

20. Your opinion about karvy stock broking ltd.jamshedpur--------

THANK YOU FOR YOUR KIND COOPERATION

2. Secondary Data:

The data is collected through the secondary sources and it is based on

fundamentals. The fundamentals are calculated in the long term and short

term basis. For calculating fundamentals in long term aspect I have taken few

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companies from different sectors, so that the risk and return analysis of 10

companies give a clear view of a portfolio.

1. COMPARISION BETWEEN THE HEAVY – ENGINEERING

COMPANIES

*indicates it is better as comparison to the other company’s value

48

Comparative parameters BHEL LARSEN & TURBO

EPS Rs 88.60 Rs 72.66*

P/E RATIO 15.83 25.29 *

BOOK VALUE Rs 325 * Rs 303.28

D/E RATIO 0.01 * 0.37

CURRENT RATIO 1.37 * 1.19

NET PROFIT MARGIN 12.55% * 11.56%

GROSS PROFIT MARGIN 16.06% * 12.74%

RETURN ON CAPITAL EMPLOYED 41.37% * 22.49%

RETURN ON EQUITY 27.08% 23.95% *

DIVIDEND PAID 179% 725% *

PROFIT GROWTH 37.35% 42.84% *

MARKET CAPITALIZATION 94,906.71 cr * 1,00,919.11 cr

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ANALYSIS

This comparison shows that in most of the parameters BHEL is good but L&T is

better in EPS its stock price is also cheaper and giving a good return on equity

and capital employed and having a good profit growth as compared to BHEL

where profit is fluctuating year after year so, it is more risky. L&T is also giving a

high dividend to its shareholders. So we have chosen L&T for our portfolio. And

here are some future plans for L&T which gives a green signal to buy.

Future prospects for Larsen & turbo ltd

L&T bagged an order of Rs 1513crore for the construction of high rise tower,

luxury hotels, hospital and factory building projects.

Order from ITC for construction ITC hotel costing Rs 238cr.

L&T has a significant market share in construction segment.

L&T wins US$ 217.25 million orders for electrical project from gulf.

L&T is emerging one of the strong players in development and construction of

metro rail system, airport expansion and modernization & port upgradation.

Its order book is booked for RS 71650cr

2. COMPARSION BETWEEN THE PHARMACEUTICAL

COMPANIES

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Comparative parameters SUN PHARMA RANBAXY

EPS ( avg for last 5 yrs) Rs 13.37 * Rs 27.28

P/E RATIO 35.70 * 20.12

BOOK VALUE Rs 276.06 * Rs 121.74

D/E RATIO 0.01 * 0.83

CURRENT RATIO 2.14 * 1.40

NET PROFIT MARGIN 33.99% * 19.74%

GROSS PROFIT MARGIN 9.86% 18.31% *

RETURN ON CAPITAL EMPLOYED 17.05 * 12.82

RETURN ON EQUTIY 15.71 * 22.41

DIVIDEND PAID 350 % * 40%

PROFIT GROWTH 211.00% * 100.83%

MARKET CAPITALIZATION Rs 49,708.80cr * Rs 22,755.60cr

*indicates it is better as comparison to the other companies value.

ANALYSIS

After comparison of all the parameters it shows that SUN PHARMA is the best

among the two. It is cheaper as compared to other. It is also giving a good return on

capital employed and equity. It is giving a good dividend to its shareholders and the

company’s profit is also growing as compared to RANBAXY which is showing a

negative growth. SUN PHARMA ‘s market share is also better as compared to

RANBAXY. So we have chosen SUN PHARMA for our portfolio which attracting the

most to purchase it.

Future prospects for Sun pharma

 A presence in lifestyle and chronic therapy categories such as diabetes and neuro-

psychiatry ensures higher growth and twice the margins for Sun Pharmaceutical.

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The company has a consistent growth track record with sales growing annually by 36

per cent over the last four years and net profits by 47 per cent during the same

period. While the domestic formulation sector is growing at 11 per cent, Sun Pharma

has managed to grow its domestic business by 19 per cent for H1, 2009.

In the international segment, expect the US (40 per cent of sales) business to grow

at about 25 per cent for the current fiscal. While the company is awaiting approval on

the 96 ANDAs it has filed with the US FDA and plans to file 30 more, FY10 might see

a slight correction as generic sales move down due to the recessionary trends in the

Top 8 global markets.

While uncertainties on Taro acquisition and FDA queries on its Caraco plant are

negatives for the stock, expect these to be resolved in the next one quarter. The

comfortable cash position at $500 million (Rs 2,500 crore) ensures that Sun Pharma

can tide over the tight liquidity conditions prevailing currently and also look out for

acquisitions at attractive valuations. At Rs 1,057, the stock can deliver returns of

about 25 per cent over the next one year.

Sun generates 41 per cent of its annual revenues from the US market, a record of

sorts among Indian drug firms. The company is bullish on its US prospects and

expects 25 per cent growth in the country this year, higher than the 18-20 per cent

growth projection it has given for other markets including India.

3. COMPARISION BETWEEN THE CONSTRUCTION COMPANIES

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COMPARATIVE PARAMETERSJP ASSOCIATES DLF

EPS ( avg for last 5 yrs) Rs 5.48 Rs 7.48 *

P/E RATIO 15.08 * 31.90

BOOK VALUE Rs 40.01* Rs 75.59*

D/E RATIO 2.11 * 0.99

CURRENT RATIO 1.73 * 5.47

NET PROFIT MARGIN 16.52% ------% *

GROSS PROFIT MARGIN 18.53% 39.82%*

RETURN ON CAPITAL EMPLOYED 13.01% 6.96% *

RETURN ON EQUITY 20.84% * 5.96%

DIVIDEND PAID 20% 100% *

PROFIT GROWTH( avg growth for last 5

yrs)90.45% 50.57% *

MARKET CAPITLAIZATION Rs 18,106.16 cr Rs 39,379.68 cr *

*indicates it is better as comparison to the other company’s value.

ANALYSIS

Here DLF is having good prospects when the financial ratios are concerned. As we

know JP ASSOCIATES is a diversified company in itself, it has presence in cement,

oil& gas, construction sectors. So it is a portfolio sector in itself. We are expecting a

strong boost in economy as well as all these above said sectors and as we are not

having any stocks in these cement and oil& gas. So we have chosen JP

ASSOCIATES as one of our stock.

FUTURE PROSPECTS FOR JP ASSOCIATES.

JP ASSOCIATES inks MoU for Rs 1050 cr cement plant in Assam. The project

would be a joint venture one with Assam Mineral Development Corporation (AMDC) ,

a government of Assam undertaking. The total production capacity of the plant would

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be 2 million tones. The plant when completed will produce about 6667 MT or about

1, 33,334 bags of bags per day.

JP Associates rises on board's nod to raise Rs 4,000 crore .The Jaiprakash (JP)

Associates stock rose 3.58 per cent to Rs 130.3 on receiving the go-ahead from its

board to raise Rs 4,000 crore through the issue of non-convertible debentures.

These funds would be used for its capex programme, working capital needs and for

other general corporate purposes.

Cement dispatch growth remains robust .The 224-million-tonne cement industry

is yet again set to strike a growth of 10 per cent in June. If the initial numbers from

the top cement makers are anything to go by, industry analysts said, the continuous

robust growth will be maintained.

4. COMPARISION BETWEEN THE STEEL COMPANIES

Comparative parameters TATA STEEL JSW STEEL

EPS ( avg for last 5 yrs) Rs 71.56 Rs90.12 *

P/E RATIO 8 9.61 *

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BOOK VALUE Rs 418* Rs 504*

D/E RATIO 0.68 * 1.26*

CURRENT RATIO 1.12 * 0.55*

NET PROFIT MARGIN 19.96% * 11.09%

GROSS PROFIT MARGIN 31.36% * 17.33%

RETURN ON CAPITAL EMPLOYED 13.06% * 15.08%

RETURN ON EQUITY 13.45% 21.14% *

DIVIDEND PAID 120.00% 122.5% *

PROFIT GROWTH 37.35% 49.36% *

MARKET CAPITALIZATION 53,918.25cr * 19,110.00 cr

*indicates it is better as comparison to the other company’s value

ANALYSIS

This comparison shows that in most of the parameters JSW STEEL is good but

TATA STEEL is better in Cash ratio and Debt Ratio. It’s stock price is also

cheaper and giving a good return on equity and margins on gross and net profit

margins and having a good profit growth as compared to JSW STEEL where

profit is fluctuating year after year so, it is more risky. TATA STEEL is also

giving a high dividend to its shareholders. So we have chosen TATA STEEL for

our portfolio. And here are some future plans for TATA STEEL which gives a

green signal to buy.

Future prospects for TATA STEEL

Mumbai, June 16, 2011 – As a part of the ongoing review of the strategic

investments of the company, Tata Steel Limited Board have considered the recent

announcement of Rio Tinto Jersey Holdings 2010Limited to de-list Riversdale Mining

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Limited following its increased shareholding to 73.20% in Riversdale Mining Limited.

Tata Steel has decided that it would not want to hold its equity investment in

Riversdale Mining Limited which is proposed to be delisted, without any joint venture

agreement with the majority shareholder in unlisted Riversdale Mining Limited.In

view of the above, the Board of Tata Steel Limited has decided to divest its entire

26.27% stake in Riversdale Mining Limited to Rio Tinto in its current takeover offer

for Riverdale Mining Limited, following which the company has initiated steps to

undertake the transaction. The sale consideration of approximately A$ 1,060 Million

represents around 100% appreciation of value in less than four years since the first

investment. The investment is currently held by Tata Steel Global Minerals Holding

Pte Limited an indirect wholly owned subsidiary of Tata Steel Limited. Tata Steel has

always welcomed Rio Tinto as the controlling shareholder of Riversdale Mining

Limitedand continues to focus on its current holding of 35% in Riversdale Energy

(Mauritius) Limited, a subsidiary of Riversdale Mining Limited, which owns coal

assets in Mozambique. Tata Steel will continue in the Joint Venture with Riversdale

Mining Limited in Mozambique. Tata Steel would look forward to work with Rio Tinto

and discuss in good faith ways to enhance its participation in the Benga JointVenture

based on the framework captured in the Joint Venture Agreement between Tata

Steel and Riversdale Mining Limited.

4. COMPARSION BETWEEN THE MOTOR COMPANIES

Comparative parameters TATA MOTORS MARUTI

EPS ( avg for last 5 yrs) Rs 39.26 * Rs 79.21

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P/E RATIO 34.51* 14.74

BOOK VALUE Rs.262.30* Rs 409.65

D/E RATIO 1.11 * 0.07

CURRENT RATIO 0.44 * 0.91*

NET PROFIT MARGIN 6.26% * 8.34%

GROSS PROFIT MARGIN 8.84% 9.93 % *

RETURN ON CAPITAL EMPLOYED 9.66 * 27.89*

RETURN ON EQUTIY 15.15 * 21.1*

DIVIDEND PAID 200 * 150.00%

PROFIT GROWTH ( Avg growth for last 5

yrs)142.10% * 93.30%

MARKET CAPITALIZATION Rs59,937.42 cr * Rs 33,290.00cr

*indicates it is better as comparison to the other companies value.

ANALYSIS

After comparison of all the parameters it shows that MARUTI is the best among the

two. It is cheaper as compared to other. It is also giving a good return on capital

employed and equity. It is giving a good dividend to its shareholders and the

company’s profit is also growing as compared to TATA MOTORS which is showing a

negative growth. TATA MOTORS‘s market share is better as compared to MARUTI.

But in other parameters MARUTI is better than TATA MOTORS. So we have chosen

MARUTI for our portfolio which attracting the most to purchase it.

Analysis and Interpretation from Primary and

Secondary Data

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1. From the survey it is believed that the demographic characteristics such as age,

gender, marital status, education etc and economic characteristics such as Annual

Household income, savings, etc are the important factors that influence one’s

investment decisions as that influence the one’s financial needs, risk appetite etc.

2. Age is considered as influencing factor in investment decisions. When reaches

different stages of lifecycle, Investor’s needs for investment changes. The

investment needs of young investor and needs of aged investors are different

because young investor looks capital appreciation whereas aged investor look for

current income as he does not have any regular source of income.

3. Education level of investor plays major role in investment decisions. The assets

involved in educated investors’ portfolio is different from that of less educated

investors’. The higher education an investor has higher will be knowledge of

investment and knowledge of investment will influence the investment decisions.

4. Income of investors from all possible sources influences the investment decisions.

If an investor has higher income that exceeds all possible expenditures, there is

possibility that he will invest remaining disposable income in various avenues of

investment he is comfortable with.

5. The objective of investor determines the portfolio of his/her investment. If an

investor who expects higher income in very short period will look for speculative

stocks for investment and ready to take higher risk. If the investors’ objective is to

reduce the tax burden, he looks for tax savings avenues of investments.

6. Investment decision in stocks is influenced by many factors including

demographic factors, socio-economic factors, etc. Decisions of buying or selling of a

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stock is mostly influenced by recommendations of brokers/consultant as investor

believes that consultant/broker has expertise and specialized in the domain. Investor

who believes they have required expertise make decisions based on their investment

philosophy like belief in fundamental factors and or current market scenario.

7. It is believed that fundamental analysis is to arrive at value of a stock and current

market analysis is to arrive at timing of buying or selling. But speculators use current

market factor to make quick profits and genuine investors would like to make money

by parking their funds for a longer horizon.

8. Investment decisions of investors depend on the perceived adequacy of

knowledge of investment. Therefore respondents are asked to state their perceived

knowledge of investment.

9. The major factor that influences investment decisions is risk appetite of investor.

Investor who is able to withstand the substantial losses arising out of an investment

will prefer speculative stocks as it gives higher return. Hence investors are asked to

different questions that constitute risk appetite of investors.

10. An analysis of Fundamental factors is to arrive at value of share. Profitability of

a firm, long-term solvency position, liquidity of the firm, efficiency with respect to

asset utilization are considered as fundamental factors. Investors weight different

factors differently.

11. The fundamental factors which is considered most is Profitability of the

company and followed by efficiency of the company. The other two factors

considered are liquidity and efficiency of the firm. It can be inferred that investors

prefer those company’s share which are profitable and which are more efficient.

Investors opine that their future returns depend on profitability and efficiency of the

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firm as efficiency of the firm influence the future returns of the firm and thereby

returns of investors and it will ensure their objective of investment over a period of

time.

12. Investors consider both fundamentals of the company and Trends of price and

volume movements before investing. The reason for that might the investors use

fundamentals to value the shares and use technical factors or current market

scenario for deciding the timing of the purchase or sell decisions.

BIBLIOGRAPHY

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Websites

www.karvy.com

www.moneycontrol.com

www.moneytoday.com

www.izone.com

www.calloptionputoption.com

www.mcxindia.com

www.equitymaster.com

Books

Kothari, C.R., Research Methodology, New Delhi, Vikas Publishing House Pvt. Ltd., 2007

Chandra, Prasanna, Investment analysis and portfolio management, New

Delhi, Tata McGraw-Hill Education Pvt. Ltd., 2011

Chandra, Prasanna, Financial management, New Delhi, Tata McGraw-Hill

Education Pvt. Ltd., 2010

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