Financial services Sector_Kritika

8/7/2019 Financial services Sector_Kritika

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Financial services Sector

By Kritika Dhingra

FMS MBA(MS) batch of 2012

Financial services provided by finance companies include insurance, housingfinancing, mutual funds, credit reporting, debt collection, stock broking,portfolio management, and investment advisory.

The financial services sector contributed 15 per cent to India's GDP inFY09, and is the second-largest component after trade, hotels, transportand communication all combined together, as per the Banking & Finance

Journal, released by an industry body in August 2010.

Financial services

Capital markets Portfolio/asset management Nbfc/MFI

Capital markets

India has 19

recognised stock

exchanges. The NSE

and the BSE are the

main exchanges,with NSE

contributing

more than 75 per

cent of the

turnover.

Retail brokerage

There are more

than 8,000

brokers

in addition to

over75,000 sub-

brokers

registered with

SEBI.

Mutual funds

Mutual funds in

India had assets

under

management

to the tune of US$ 155 billion

(INR 7,132 billion)

as of September

2010.

Nbfc

More than I2,500

NBFCs are

registered with

RBI. More than

80% of theequipment hire

purchase

segment

is financed by

them.

Microfinance

microfinance

segment in

India is

witnessing

rapidgrowth. These

institutions

reach out

to the grass-

root level&

have fewer

defaults





stiff competition from other investment products such as those off ered byof the life insurance industry and the portfolio managers

Suggestions – • Allowing Asset Management Companies the flexibility to charge managementfees. In a “perfect competition” scenario, the price of goods or services is

efficiently determined by the market itself.• Mutual fund distributors in India are largely unregulated. Further, there are instances of distributors rendering investment advice withoutrequisite qualification, information of mutual fund schemes/investorand consideration of the investor’s needs. Distribution supported by

quality investment advice is clearly the need of the hour.products• There are a plethora of similar sounding schemes off ered by theasset management companies resulting in a craving for lower number of schemes with similar investment strategy.

The products are not innovative and off er limited asset classes with inadequateopportunities for diversification.

Deals

The number of mergers and acquisitions (M&A), private equity (PE)transactions and Qualified Institutional Placements (QIP) increased close to 40per cent to US$ 3.23 billion in November 2010. Besides, there have been US$ 9billion plus deals so far in 2010, the highest seen in any year.

Stock markets

Market capitalisation of India as a proportion of world market cap has risen to a

record high. According to data sourced from Bloomberg, the country's marketcapitalisation as a proportion of the world market cap is currently 3.34 per cent.India's current market-cap is US$ 1.55 trillion as compared with world market-cap of US$ 46.5 trillion. This is higher than 3.12 per cent share India enjoyed atthe market peak of January 2008.

List of top 10 financial services companies in India

Find below a comprehensive list of top financial services companies in India.



SBI Capital Markets Limited: This happens to be the oldest organizations in the sphere of capital markets in India. Established in 1986 inthe form of an ancillary of SBI, they have ranked second in Asia's Project Advisory services. The companyis a traiblazer in privatization and securitization. The subsidiaries of SBI Capital Markets are SBICAPsVentures Ltd., SBICAP Trustee Co.Ltd. and many others.

Bajaj Capital Limited: One of the major financial services companies in India, Bajaj Capital offers best investment advisory andfinancial planning services. The services are meted out to the institutional investors, NRIs, corporatehouses, individual investors, high network clients as well.

DSP Merrill Lynch Limited: A major player in the equity and debt market in India, DSP Merrill Lynch offers financial advises to variedcorporations and institutions. With an array of wealth management and investor services, their services arecustomized in a manner that they meet every investor requirement.

Birla Global Finance Limited: The subsidiary of Aditya Birla Nuvo Ltd., this company has operations in the corporate finance and capitalmarket arena. An alliance with Sun Life Financial of Canada, they have given birth to Birla Sun LifeInsurance Co Ltd., Birla Sun Life Distribution Co. and alike.

Housing Development Finance Corporation: A best financial solution for home loans, NRI loans, HDFC is the one stop destination for personal finance.With overseas branches in Singapore, Kuwait, Qatar, Saudi Arabia and many others, HDFC has beengoing great guns every year.

PNB Housing Finance Limited: This company offers premium solutions for relieving the borrower segment. The Home Loan Life InsurancePlan of this has come in conjunction with TATA AIG, with the lowest premium when compared to the peers.

ICICI Group: Wide arena of financial products and services, ICICI Group has solutions like InstaBanking, Online Trading,Insta Insure, ICICI Bank imobile etc. Providing high class financial services in all segments of the society,ICICI Group deals with Mutual Fund, Private Equity, Securities, and Life Insurance etc.

LIC Finance Limited: It is the biggest Housing Finance Company in India, providing finance to individuals for repair orconstruction or renovation of any old or new apartment or house.

L & T Finance Limited: Established in 1994 by the Larsen and Turbo group, this has become a significant name in the financialsector. Funds for automobiles, Agricultural Instruments, secured loans; they have all types of loans for along tenure.

Karvy Group: With Mutual Funds Services, Depository Services, Debt Market Services, Investment Banking and manyothers, Karvy Group has spanned across the domestic financial sector as well as abroad.

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Financial services Sector_Kritika