iifl welth mgt

8/4/2019 iifl welth mgt

1/83

COMPERATIVE ANALYSIS OF MUTUAL FUND

A Minor Project Report

Submitted in partial fulfillment of the requirement for BBA(cam) Semester VI

Programme of G.G.S.Indraprastha University, Delhi

SUBMITTED BY

Paras Sharma

BBA(cam) Semester-VI

Enrolment No : 07112401909

(2009-2012)

Delhi Institute of Rural Development

Nangali Poona, New Delhi 110036


2/83

2

Declaration

I hereby declare that the minor project report, entitled ComaprativeAnalysis of Mutual Fund , is based on my original study and has not

been submitted earlier for any degree or diploma of any

institution/university.

The work of other auther(s), wherever used, has been acknowledged at

appropriate place(s).

Place: Candidates signature

Date : ... Name: ..

Enrol. No. : ..

Countersigned

Name:.

Supervisor

Delhi Institute Of Rural Development


3/83

3

ACKNOWLEDGEMENT

Any purpose and its fulfillment require deep routed efforts for its completion.

Many characters play a vital role. This is more when a project undertaken is

directly to a cause.

Our sincere thanks to Prof. Dr. R. K. Balyan, Director of IBMR

Business School for gave this opportunity to us. Our sincere thanks to Prof.

B.N.Mehta, Academic Director. He was introduced as one of the pillars of our

Organization. It is from him that we learnt the nuance of the day-to-day affairs.

He made us to learn more processes beyond our project.

We would like to thank Prof.Priyanka Gohil , our Project guide, not

only for giving us the opportunity to work on this project, but also for providing

us with sound guidance and the necessary facilities to carry out the project. She

constantly insisted and helped us in learning new things. She provided us a lot

of learning opportunities.

Finally we would like to thank all those who were directly and indirectly

concerned in making my project successful. To put it in a nutshell a difficult

and arduous journey was made simple and quiet enjoyable due to their support.

RAMESH KUMAR (253)

SATISH KATHIRIYA (269)


4/83

4

PREFACE

MBA program is one of the most reputed professional courses in the field of

Management. Training is an integral part of MBA (PGPM). As a

complementary to that every trainee has to submit a report on the research work

conducted in that institute.

This report is thus prepared for the project work done at Indiainfoline

Bapunagar branch. The topic of the project is, wealth management with

reference to IndiaInfoline.

Investment means putting your money to work to earn more money. If done

wisely it can help to meet one's financial goals like buying a new house, paying

for a college education, education, enjoying a comfortable retirement or

whatever is important to an individual.

One needs to make decisions about how much he/she wants to invest and where

to invest. To choose he needs to know current good options available and their

relative risk exposures. These help are given to a client in Indiainfoline as to in

which portfolio they can invest and what risks are related to it. They manage all

the respected returns of their clients and timely inform them for the switching to

be done between funds in cases of expected downfall in returns of their Mutual

Funds in future.


5/83

5

INDEX

NO PARTICULAR PAGE NO

1 INTRODUCTION TO WEALTH

MANAGEMENT

6

INTRODUCTION OF WEALTHMANAGEMENT

7

2 COMPANY PROFILE 14

INTRODUCTION TO INDIA INFOLINE 15 HISTORY OF INDAIINFOLINE 16 VISION 18 MISSION 18 COMPANYS PHILOSHOPY 18

COMMITTEE 19 COMPANY STRUCTURE 20 PRODUCT & SERVICE 21 MILESTONES ACHIVED 35 MARKET SHARE OF COMPANY 37 CHALLENGE FACED BY INDIAINFOLINE 39 MARKETING STRATGY OF

INDIAINFOLINE

40

HUMAN RESOURCES 41

3 RESEARCH METHODOLOGY 42 OBJECTIVE OF STUDY 43 DATA COLLECTION 43 FUNDAMENTAL RESEARCH SERVICE 44 TECHNICAL RESEARCH SERVICE 45 SWOT ANALYSIS 47 PORTERS FIVE FORCE MODEL 48

4 DATA ANALYSIS 50

FINANCIAL PERFORMANCE 51

P & L ACCOUNT OF INDIAINFOLINE 54 BALANCE SHEET OF INDIAINFOLINE 56 COMPITITORS 57 COMPARATIVE ANALYSIS OF CHARGES

& FACILITIES PROVIDED BY

DIFFERENT COMPANY

60

PERFORMANCE HIGHLIGHT 2008-09 61 HIGHLIGHTS ,2008-09 INDUSTRY

OPTIMISM

62

5 FINDING 64


6/83

6

6 RECOMMENDATION 65

7 CONCLUSION 66

8 BIBLIOGRPHY 67


7/83

7

INTRODUCTION

Wealth management Service is provided by banks, professional trust

companies, and brokerages. For those with sizeable assets, professional wealth

management can help you plan your estate or invest your assets based on

personal criteria and financial goals.

Wealth Management system is an integrated platform designed to support

high demand of customer relationship businesses and a complex portfolio

management analysis. The solution provides technology that helps private

wealth institutions utilize their customers database more proficiently and more

efficiently. With IndiaInfoline WMS sophisticated work system, firms will be

able to enhance their services and sale capabilities throughout a comprehensive

set of wealth management services such as investment strategy setting,

marketing event or campaign management, a high level of portfolio

management or a graphic design of a consolidated report.

Wealth management System offers a one-stop solution to take the guess

work out of mandatory rollovers so you can save time and money.

Wealth management is an advanced investment advisory discipline that

incorporates financial planning and specialist financial services. The keyobjectives are to provide high net worth individuals and families with tailored

retail banking services, estate planning, legal resources, taxation advice and

investment management, with the goal of sustaining and growing long-term

wealth. Wealth management can be provided by independent financial advisers

or large corporate entities whose services are designed to focus on high-net

worth retail customers. Such customers would be considered mass affluent or
http://en.wikipedia.org/wiki/High_net_worth_individualhttp://en.wikipedia.org/wiki/Retail_bankinghttp://en.wikipedia.org/wiki/Estate_planninghttp://en.wikipedia.org/wiki/Taxationhttp://en.wikipedia.org/wiki/Investment_managementhttp://en.wikipedia.org/wiki/Mass_affluenthttp://en.wikipedia.org/wiki/Mass_affluenthttp://en.wikipedia.org/wiki/Investment_managementhttp://en.wikipedia.org/wiki/Taxationhttp://en.wikipedia.org/wiki/Estate_planninghttp://en.wikipedia.org/wiki/Retail_bankinghttp://en.wikipedia.org/wiki/High_net_worth_individual


8/83

8

upper retail clients because of their net worth, the number of potential products

they own from financial institutions, their assets under management and other

methods of segmentation. Large banks and brokerage houses create separate

sales forces, services and other benefits to retain or attract these customers who

are typically more profitable than other retail banking, brokerage, or insurance

customers.

In most industrialized countries, a substantial part of financial wealth is

not managed directly by savers, but through a financial intermediary, which

implies the existence of an agency contract between the investor (the principal)

and a broker or portfolio manager (the agent). Therefore, delegated brokerage

management is arguably one of the most important agency relationships

intervening in the economy, with a possible impact on financial market and

economic developments at a macro level.

As the per-capita-income of the city is on the higher side, so it is quite

obvious that they want to invest their money in profitable ventures. On the other

hand, a number of brokerage houses make sure the hassle free investment in

stocks. Asset management firms allow investors to estimate both the expected

risks and returns, as measured statistically. There are mainly two types of

Portfolio management strategies.

Passive Portfolio Strategy

Active Portfolio Strategy

Passive Portfolio Strategy: A strategy that involves minimal expectation

input, and instead relies on diversification to match the performance of

some market index. A passive strategy assumes that the marketplace will

reflect all available information in the price paid for securities
http://en.wikipedia.org/wiki/Net_worthhttp://en.wikipedia.org/wiki/Assets_under_managementhttp://en.wikipedia.org/wiki/Brokeragehttp://en.wikipedia.org/wiki/Brokeragehttp://en.wikipedia.org/wiki/Assets_under_managementhttp://en.wikipedia.org/wiki/Net_worth


9/83

9

Active Portfolio Strategy: A strategy that uses available information

and forecasting techniques to seek a better performance than a portfolio

that is simply diversified broadly.

The Basic Methods of Wealth management is.

Mutual funds

A Mutual Fund is a body corporate registered with SEBI (Securities Exchange

Board of India) that pools money from individuals/corporate investors and

invests the same in a variety of different financial instruments or securities such

as equity shares, Government securities, Bonds, debentures etc. Mutual funds

can thus be considered as financial intermediaries in the investment business

that collect funds from the public and invest on behalf of the investors. Mutual

funds issue units to the investors. The appreciation of the portfolio or securities

in which the mutual fund has invested the money leads to an appreciation in the

value of the units held by investors. The investment objectives outlined by a

Mutual Fund in its prospectus are binding on the Mutual Fund scheme. The

investment objectives specify the class of securities a Mutual Fund can invest

in. Mutual Funds invest in various asset classes like equity, bonds, debentures,

commercial paper and government securities. The schemes offered by mutual

funds vary from fund to fund. Some are pure equity schemes; others are a mix

of equity and bonds. Investors are also given the option of getting dividends,

which are declared periodically by the mutual fund, or to participate only in the

capital appreciation of the scheme

Equities

Equity trading is the buying and selling of company stockshares. Shares in

large publicly-traded companies are bought and sold through one of the
http://en.wikipedia.org/wiki/Shareshttp://en.wikipedia.org/wiki/Public_companyhttp://en.wikipedia.org/wiki/Public_companyhttp://en.wikipedia.org/wiki/Shares


10/83

10

major stock exchanges, such as the Bombay Stock Exchange, National Stock

Exchange, which serve as managed auctions for stock trades.

Share or stock is a document issued by a company, which entitles its holder to

be one of the owners of the company. A share is issued by a company or can be

purchased from the stock market.

Share market where dealing of securities is done is known as share market.

There are two ways in which investors gets share from market:

Primary market: markets in which new securities are issued are known as

primary market. This is part of the financial market where enterprises issue their

new shares and bonds. It is characterized by being the only moment when the

enterprise received money in exchange for selling its financial assets.

Secondary Market: Market in which existing securities are dealt is known as

secondary market. The market where securities are traded after, they are initially

offered in the primary market. Most trading is done in the secondary market.

The Stock Market is an invisible market that trades in stocks of various

companies belonging to both the public and private sectors. The Indian Stock

Market is often referred to as the Share Market since it deals primarily with

shares of various companies.

A Stock Exchange is a place where the stocks are listed and traded. Such

exchanges may be a corporation or mutual organization which specializes in the

business of introducing the sellers with the buyers of stocks and securities.

The Indian Stock Market in India comprises of two stock exchanges:
http://en.wikipedia.org/wiki/Stock_exchangehttp://en.wikipedia.org/wiki/Auctionhttp://en.wikipedia.org/wiki/Auctionhttp://en.wikipedia.org/wiki/Stock_exchange


11/83

11

Bombay Stock Exchange (BSE)

National Stock Exchange (NSE)

BOMBAY STOCK EXCHANGE (BSE)

The Bombay Stock Exchange (BSE) was established in 1875.The BSE India

Stock Exchange serves as the most important for companies to raise money.

The chief function of the Stock Market of India is to help raise money as capital

for the growth and expansion of various private and public sector enterprises.

Besides, the Stock Market of India provides able assistance to the individual

investors through daily updates on current position of the stocks of the

respective companies that are enlisted in the Stock Index in which the

movement of prices in a section of the market are captured in price indices. The

popular acronym for Stock Index is Sensitive index or sensex. Moreover, the

liquidity provided by the exchange enables the investors to sell securities owned

by them easily and quickly. Hence a person, who is subjected to sudden dearth

of funds, can immediately sell his shares for cash in India Stock Market.

The BSE Sensex, also known as BSE 30 is a widely used market index not

only in India but across Asia. In terms of volume of transactions, it is ranked

among the top five stock exchanges in the world.

NATIONAL STOCK EXCHANGE (NSE)

The National Stock Exchange of India Ltd. (NSE), set up in the year 1993, is

today the largest stock exchange in India and a preferred exchange for trading in

equity, debt and derivatives instruments by investors. NSE has set up a

sophisticated electronic trading, clearing and settlement platform and its

infrastructure serves as a role model for the securities industry. The standards

set by NSE in terms of market practices; products and technology have become


12/83

12

industry benchmarks and are being replicated by many other market

participants.

NSE provides a screen-based automated trading system with a high degree oftransparency and equal access to investors irrespective of geographical location.

The high level of information dissemination through the on-line system has

helped in integrating retail investors across the nation.

The exchange has a network in more than 350 cities and its trading members are

connected to the central servers of the exchange in Mumbai through a

sophisticated telecommunication network comprising of over 2500 VSATs.

NSE has around 850 trading members and provides trading in equity shares and

debt securities. Besides this, NSE provides trading in various derivative

products such as index futures, index options, stock futures, stock options and

interest rate futures.

In addition to these organizations there are other organizations highlighting on

the share trading in the Indian Stock Market are:

Securities and Exchange Board of India (SEBI)

NSDL

CDSL

Commodities

Do you think gold prices will go up further?

Are you sure that crude oil prices are going to fall?

Have you heard that the soya crop this year is bad and will result in soya prices

going up?


13/83

13

If you believe that these predictions have a good chance of coming true and

are willing to bet some money on them, you could try your hand at playing the

commodity futures market.

A commodity is a basic good representing a monetary value. Commodities are

most often used as inputs in the production of other goods or services. With the

advent of new online exchange, commodities can now be traded in futures

markets. When they are traded on an exchange,

Commodities must also meet specified minimum standards known as basic

grade.

Types of Commodities

Precious Metals : Gold and Silver

Base Metals : Copper, Zinc , Steel and Aluminum

Energy : Crude Oil, Brent Crude and Natural Gas

Pulses : Chana , Urad and Tur

Spices : Black Pepper, Jeera, Turmeric , Red Chili

Others : Guar Complex, Soy Complex, Wheat and

Sugar

Bonds

Bonds refer to debt instruments bearing interest on maturity. In simple terms,

organizations may borrow funds by issuing debt securities named bonds, having

a fixed maturity period (more than one year) and pay a specified rate of interest

(coupon rate) on the principal amount to the holders

It is a fixed income (debt) instrument issued for a period of more than one year

with the purpose of raising capital. The central or state government,


14/83

14

corporations and similar institutions sell bonds. A bond is generally a promise

to repay the principal along with a fixed rate of interest on a specified date,

called the Maturity Date.

Portfolio Management Service (PMS)

Portfolio management service (PMS) is a type ofprofessional service

offered by portfolio managers to their client to help them in managing their

money in less time. Portfolio managers manage the stocks, bonds, and mutual

funds of clients considering their personal investment goals and risk

preferences. In addition to money, the portfolio managers manage the portfolio

of stocks, bonds, and mutual funds.

Successful investing in Capital Markets demands ever more time and expertise.

Investment Management is an art and a science in itself. Portfolio Management

Services (PMS) is one such service that is fast gaining eminence as an

investment avenue of choice for High Net worth Investors (HNI). PMS is a

sophisticated investment vehicle that offers a range of specialized investment

strategies to capitalize on opportunities in the market. The Portfolio

Management Service combined with competent fund management, dedicated

research and technology, ensures a rewarding experience for its clients.

Indiainfoline PMS brings with it years of experience, expertise, research and the

backing of India's leading stock broking house. At Angel, experienced portfolio

management is the difference. It will advise you on a suitable product based on

factors such as your investment horizon, return expectations and risk tolerance.


15/83

15

Loan

A loan is a type of debt. Like all debt instruments, a loan entails the

redistribution of financial assets over time, between the lender and the borrower.

In a loan, the borrower initially receives or borrows an amount ofmoney, called

the principal, from the lender, and is obligated to pay back or repay an equal

amount of money to the lender at a later time. Typically, the money is paid back

in regular installments, or partial repayments; in an annuity, each installment is

the same amount. The loan is generally provided at a cost, referred to as interest

on the debt, which provides an incentive for the lender to engage in the loan. In

a legal loan, each of these obligations and restrictions is enforced by contract,

which can also place the borrower under additional restrictions known as loan

covenants.

Acting as a provider of loans is one of the principal tasks for financial

institutions. For other institutions, issuing ofdebt contracts such as bonds is a

typical source of funding.

Insurance

Insurance is a basic form of risk management which provides protection

against possible loss to life or physical assets. A person who seeks protection

against such loss is termed as insured, and the company that promises to honor

the claim, in case such loss is actually incurred by the insured, is termed as

Insurer. In order to get the insurance, the insured is required to pay to the

insurance company (i.e. the insurer) a certain amount, termed as premium, on a

periodical basis (say monthly, quarterly, annually, or even one-time).
http://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Assethttp://en.wiktionary.org/wiki/lenderhttp://en.wiktionary.org/wiki/borrowerhttp://en.wikipedia.org/wiki/Moneyhttp://en.wikipedia.org/wiki/Annuity_(finance_theory)http://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Contracthttp://en.wikipedia.org/wiki/Loan_covenanthttp://en.wikipedia.org/wiki/Loan_covenanthttp://en.wikipedia.org/wiki/Financial_institutionhttp://en.wikipedia.org/wiki/Financial_institutionhttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Bond_(finance)http://www.appuonline.com/insurance/index.html#_blankhttp://www.appuonline.com/insurance/index.html#_blankhttp://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Financial_institutionhttp://en.wikipedia.org/wiki/Financial_institutionhttp://en.wikipedia.org/wiki/Loan_covenanthttp://en.wikipedia.org/wiki/Loan_covenanthttp://en.wikipedia.org/wiki/Contracthttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Annuity_(finance_theory)http://en.wikipedia.org/wiki/Moneyhttp://en.wiktionary.org/wiki/borrowerhttp://en.wiktionary.org/wiki/lenderhttp://en.wikipedia.org/wiki/Assethttp://en.wikipedia.org/wiki/Debt


16/83

16


17/83

17

INTRODUCTION TO INDIAINFOLINE

IndiaInfoline founded in 1995 by Mr. Nirmal Jain (Chairman and ManagingDirector) as an independent business research and information provider. We

gradually evolved into a one-stop financial services solutions provider. Ourstrong management team comprises competent and dedicated professionals.

We are a pan-India financial services organization across 1,361 business

locations and a presence in 428 cities. Our global footprint extends across

geographies with offices in New York, Singapore and Dubai. We are listed on

the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

We offer a wide range of services and products comprising broking (retail and

institutional equities and commodities), wealth management, credit and finance,

insurance, asset management and investment banking.

We are registered with the BSE and the NSE for securities trading, MCX,

NCDEX and DGCX for commodities trading, CDSL and NSDL as depository

participants. We are registered as a Category I merchant banker and are a SEBIregistered portfolio manager. We also received the FII license in IIFL Inc. IIFL

Securities Pte Ltd received approval from the Monetary Authority of Singapore

to carry out corporate advisory and dealing in securities operations. Two

subsidiariesIndia Infoline Investment Services and Moneyline Credit Limitedare registered with RBI as non-deposit taking non-banking financial servicescompanies. India infoline Housing Finance Ltd, the housing finance arm, is

registered with the National Housing Bank.


18/83

18

HISTROY OF INDIAINFOLINE

The IndiaInfoline Group was originally incorporated on October 18, 1995

as Probity Research and Services Private Limited at Mumbai under the

Companies Act, 1956 with Registration No. 11 93797. The IndiaInfoline Group

commenced its operations as an independent provider of information, analysis

and research covering Indian businesses, financial markets and economy, to

institutional customers. We became a public limited company on April 28, 2000

and the name of the Company was changed to Probity Research and Services

Limited. The name of the Company was changed to India Infoline.com Limited

on May 23, 2000 and later to India Infoline Limited on March 23, 2001.

In 1999, The IndiaInfoline Group identified the potential of the Internet to

cater to a mass retail segment and transformed our business model from

providing information services to institutional customers to retail customers.

Hence we launched our Internet portal, www.indiainfoline.com in May 1999

and started providing news and market information, independent research,

interviews with business leaders and other specialized features.

In May 2000, the name of our Company was changed to India

Infoline.com Limited to reflect the transformation of our business. Over a

period of time, we have emerged as one of the leading business and financial

information services provider in India.

In the year 2000, The India Infoline Group leveraged its position as a

provider of financial information and analysis by diversifying into transactional

services, primarily for online trading in shares and securities and online as well

as offline distribution of personal financial products, like mutual funds and RBI

Bonds. These activities were carried on by our wholly owned subsidiaries.


19/83

19

The India Infoline Groups broking services was launched under the

brand name of 5paisa.com through our subsidiary, India Infoline Securities

Private Limited and www.5paisa.com, the e-broking portal, was launched for

online trading in July 2000. It combined competitive brokerage rates and

research, supported by Internet technology Besides investment advice from an

experienced team of research analysts, we also offer real time stock quotes,

market news and price charts with multiple tools for technical analysis.

Acquisition of Agri Marketing Services Limited ("Agri")

In March 2000, The IndiaInfoline Group acquired 100% of the equity

shares of Agri Marketing Services Limited, from their owners in exchange for

the issuance of 508,482 of our equity shares. Agri was a direct selling agent of

personal financial products including mutual funds, fixed deposits, corporate

bonds and post-office instruments. At the time of our acquisition, Agri operated

32 branches in South and West India serving more than 30,000 customers with a

staff of, approximately 180 employees. After the acquisition, we changed the

company name to India Infoline.com Distribution Company Limited.

The India Infoline group, comprising the holding company, India Infoline

Ltd (NSE: INDIAINFO, BSE: 532636) and its subsidiaries, is one of the

leading players in the Indian financial services space. India Infoline offers the

entire gamut of financial services covering investment products ranging from

Equities and derivatives, Commodities, Portfolio Management Services, Mutual

Funds, Life Insurance, Fixed deposits, Loans, Investment Banking, GoI bonds

and other small savings instruments. It owns and manages the website,

www.indiinfoline.com, which is one of Indias leading online destinations for

personal finance, stock markets, economy and business.


20/83


21/83


22/83

22

COMPANY PHILISOPHY

The IndiaInfoline Group is committed to placing the Investor First, by

continuously striving to increase the efficiency of the operations as well as the

systems and processes for use of corporate resources in such a way so as to

maximize the value to the stakeholders. The Group aims at achieving not only

the highest possible standards of legal and regulatory compliances, but also of

effective management.

COMMITTEE

Audit Committee

Terms of reference & Composition, Name of members and Chairman: The

Audit committee comprises Mr Nilesh Vikamsey, Chairman of the Committee,

Mr Sat Pal Khattar, Mr Sanjiv Ahuja and Mr Kranti Sinha, three of whom areindependent Directors. The top Executivess and Internal Auditors are invitees to

the Meeting. The Terms of reference of this committee are as under: - To

investigate into any matter that may be prescribed under the provisions of

Section 292A of The Companies Act, 1956 - Recommendation and removal of

External Auditor and fixation of the Audit Fees. - Reviewing with the

management the financial statements before submission of the same to the

Board. - Overseeing of Companys financial reporting process and disclosure of

its financial information. - Reviewing the Adequacy of the Internal Audit

Function.


23/83

23

Compensation/ Remuneration Committee

Terms of reference & Composition, Name of members and Chairman: The

Compensation / Remuneration Committee comprises Mr Sanjiv Ahuja,

Chairman of the Committee, Mr Nilesh Vikamsey and Mr Kranti Sinha, all of

whom are independent Directors. The Terms of reference of this committee are

as under: - To fix suitable remuneration package of all the Executive Directors

and Non Executive Directors, Senior Employees and officers i.e. Salary,

perquisites, bonuses, stock options, pensions etc. - Determination of the fixedcomponent and performance linked incentives alongwith the performance

criteria to all employees of the company - Service Contracts, Notice Period,

Severance Fees of Directors and employees. - Stock Option details: whether to

be issued at discount as well as the period over which to be accrued and over

which exercisable. - To conduct discussions with the HR department and form

suitable remuneration policies.

Share Transfer and Investor Grievance Committee

Details of the Members, Compliance Officer, No of Complaints received and

pending and pending transfers as on close of the financial year. The committee

functions under the Chairmanship of Mr Kranti Sinha, a Non-executive

independent Director. The other Members of the committee are Mr Sanjiv

Ahuja, Independent Director and Mr R Venkataraman, Executive Director. Ms

Komal Parikh, Company Secretary is the Compliance Officer of the Company.


24/83

24

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India, viz.

the Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE)and is also a member of both the exchanges. It is engaged in the businesses of

Equities broking, Wealth Advisory Services and Portfolio Management

Services. It offers broking services in the Cash and Derivatives segments of the

NSE as well as the Cash segment of the BSE. It is registered with NSDL as well

as CDSL as a depository participant, providing a one-stop solution for clients

trading in the equities market. It has recently launched its Investment bankingand Institutional Broking business.

A SEBI authorized Portfolio Manager; it offers Portfolio Management Services

to clients. These services are offered to clients as different schemes, which are

based on differing investment strategies made to reflect the varied risk-return

preferences of clients


25/83

25

PRODUCT & SERVICES

Equities

India Infoline provided the prospect of researched investing to its clients,

which was hitherto restricted only to the institutions. Research for the retail

investor did not exist prior to India Infoline. India Infoline leveraged

technology to bring the convenience of trading to the investors location of

preference (residence or office) through computerized access. India Infoline

made it possible for clients to view transaction costs and ledger updates in real

time.

Over the last five years, India Infoline sharpened its competitive edge

through the following initiatives:

Multi-channel delivery model :

The Company is among the few financial intermediaries in India to offer a

complement of online and offline broking. The Companies network of

branches also allows customers to place orders on phone or visit our branches

for trading.

Integrated middle and back office :

The customer can trade on the BSE and NSE, in the cash as well as the

derivatives segment all through the available multiple options of Internet,

phone or branch presence.

Multiple-trading options :

The Company harnessed technology to offer services at among the lowest

rates in the business.


26/83


27/83

27

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic

intent to emerge as a one stop solutions financial intermediary. Its experience

in securities broking has empowered it with requisite skills and technologies.

Increased offering: The Companies commodities business provides a contra-

cyclical alternative to equities broking. The Company was among the first to

offer the facility of commodities trading in Indias young commodities market

(the MCX commenced operations only in 2003). Average monthly turnover on

the commodity exchanges increased from Rs 0.34 bn to Rs 20.02 bn. The

commodities market has several products with different and non-correlated

cycles. On the whole, the business is fairly insulated against cyclical gyrations

in the business.

IndiaInfoline distinguished its business through the interplay of

knowledge and technology:

Complete solution :

The Company provides a complete - advice to execution solution facilitated by

information and advice on likely commodity trends in the Indian and

international environment.Technology :

The Company has extended the trading terminal to the investors

home/workplace reinforced with real-time commodity information and ledger

position.


28/83

28

Rates :

The Company harnessed technology to offer services at among the lowest

rates in the business. Membership: The Company widened client reach in

trading on the domestic and international exchanges.

Key Features :

Enjoys memberships with the MCX and NCDEX, two leading Indiancommodities exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model, making it among the select few to offer

online as well as offline trading facilities

Extended commodity trading to retail investors, among the few Indian

financial intermediaries to do so

Online business at 80% of revenues dominates commodities trading

revenues

Provides regular commodity updates pertaining to the Indian and

international environment

INSURANCE

An entry into this segment helped complete the client's product basket;

concurrently, it graduated the Company into a one stop retail financial solutions

provider. To ensure maximum reach to customers across India, we have employed a

multi pronged approach and reach out to customers via our Network, Direct and

Affiliate channels. Following the opening of the sector in 1999-2000, a number ofprivate sector insurance service providers commenced operations aggressively and

helped grow the market.

The Companies entry into the insurance sector derisked the Company from a

predominant dependence on broking and equity-linked revenues. The annuity based


29/83

29

income generated from insurance intermediation result in solid core revenues across

the tenure of the policy.

Over the last five years, India Infoline sharpened its competitive edge in this

business segment through the following initiatives:

Client base :

Grew its 40,000 strong client base through knowledge-led analysis, translating into

an attractive opportunity to cross-sell products and generate referral business.

Distribution network :

Invested in a distribution network of 177 branches across 19 states, which provided

it with an unmatched reach within its segment.

Hands-on training :

Invested aggressively in training its field force more than 100 hours a year in

product attributes across the insurance sector - highlighting various product details

and marketing skills apart from regular meets where best practices are shared.

Technology :

The Company provides a prudent mix of proprietary and outsourced technologies,

which facilitate business growth without a corresponding increase in costs.

Research and advice :

Provided clients with advice on diverse investment products based on the customers

existing and prospective financial profile.


30/83

30

Key features :

India Infoline was the first corporate in India to get the agency licence inearly 2001

The Company is the biggest corporate agency in India for life insurance

products

The Company operates multiple channels, namely branch network,

preferred client group, direct marketing, corporate tax advisory, walk-insand seminars, to reach out to customers.

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market

so effortless. All you have to do is register with us and thats all. No

paperwork no queues and No registration charges.

If you are 5p customer use your existing login ID and Ledger (fund transfer)

password. Indiainfoline offers you a host of mutual fund and IPO choices

under one roof; backed by in-depth information and research to help you

invest effortlessly.


31/83

31

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof,

backed by in-depth research and advice from research house and tools

configured as investor friendly. Investing in Mutual Funds has never been

easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going

through the hassles of filling ANY application form/ paperwork.

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings)

which are about to hit the market and analysis on these recent IPO

listings, prospectus/offer documents, and IPO reports are few of the

features, which help you, keep on top of the IPO markets.

Loans

They say you mustn't trust a man till you know his house. Everyone likes

hearing people say Wow, what a beautiful house you have! From cave dwelling,

we have evolved and now a house provides far more than just shelter...it alsobecomes a source of pride. A Housing Loan is used as finance to help you buy

or modify that perfect home.

The different Housing Loan products can be classified as:

Home Loans & Home Extension Loans

NRI Loans


32/83

32

Land Loans

Home Equity Loans

What is a housing loan? Who can apply? General Terms and

conditions of a Housing

Loan product. Charges applicable to

housing loan products.

Repayment capacity Credit documentation Legal documentation

Tax Benefits Property Insurance

What is a housing loan?They say you mustn't trust a man till you know his house. Everyone likes

hearing people say "Wow, what a beautiful house you have!" From cave

dwelling, we have evolved and now a house provides far more than just

shelter...it also becomes a source of pride. A Housing Loan is used as finance to

help you buy or modify that perfect home. The different Housing Loan products

can be classified as:

Home Loan

Home Extension Loans

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans
http://new.indiainfoline.com/PersonalFinance/Loans/#1http://new.indiainfoline.com/PersonalFinance/Loans/#2http://new.indiainfoline.com/PersonalFinance/Loans/#3http://new.indiainfoline.com/PersonalFinance/Loans/#3http://new.indiainfoline.com/PersonalFinance/Loans/#3http://new.indiainfoline.com/PersonalFinance/Loans/#3http://new.indiainfoline.com/PersonalFinance/Loans/#3http://new.indiainfoline.com/PersonalFinance/Loans/#4http://new.indiainfoline.com/PersonalFinance/Loans/#4http://new.indiainfoline.com/PersonalFinance/Loans/#4http://new.indiainfoline.com/PersonalFinance/Loans/#4http://new.indiainfoline.com/PersonalFinance/Loans/#5http://new.indiainfoline.com/PersonalFinance/Loans/#6http://new.indiainfoline.com/PersonalFinance/Loans/#7http://new.indiainfoline.com/PersonalFinance/Loans/#8http://new.indiainfoline.com/PersonalFinance/Loans/#9http://new.indiainfoline.com/PersonalFinance/Loans/#9http://new.indiainfoline.com/PersonalFinance/Loans/#8http://new.indiainfoline.com/PersonalFinance/Loans/#7http://new.indiainfoline.com/PersonalFinance/Loans/#6http://new.indiainfoline.com/PersonalFinance/Loans/#5http://new.indiainfoline.com/PersonalFinance/Loans/#4http://new.indiainfoline.com/PersonalFinance/Loans/#4http://new.indiainfoline.com/PersonalFinance/Loans/#3http://new.indiainfoline.com/PersonalFinance/Loans/#3http://new.indiainfoline.com/PersonalFinance/Loans/#3http://new.indiainfoline.com/PersonalFinance/Loans/#2http://new.indiainfoline.com/PersonalFinance/Loans/#1


33/83

33

Short term Bridging Loans

Balance Transfer

Who can apply?

As long as you want to buy a house in India, you can apply for a Home Loan.

You could be a Resident Indian or an NRI; you could want to buy a property

now or in the future, but you may still apply for a Home Loan. In case you go

with the last option and want to wait before you consider nests, all you have tobe sure of is the amount you are willing to spend on this property and the HfIs

will let you know your eligibility based on your income which will help you

plan out your budget. To find out your eligibility, please use our calculator.

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals.

When you're 18, you are allowed to go for that late night party on the condition

that someone drops you home before 12. Every step we take requires condition

to be fulfilled. Similarly, these are the general terms & conditions of a Home

Loan. For more details, please refer to the individual product.

LTV Ratio will not exceed a particular percentage. This percentage

differs from HFI to HFI and the components of the value of property are

covered in Cost of Property

Elastic can be stretched only to a certain extent. The loan tenure also will

not go beyond 20 years. However, HFIs do provide for different tenures

with different terms and conditions.

Your EMI normally does not exceed 50% of your Gross Monthly income.


34/83

34

The total monthly payment towards all the loans you have availed of,

including the present one, will normally not exceed 50% of your Gross

Monthly Income.

Your loan eligibility is calculated using LTV, IIR and FOIR norms and

the lowest from the three is chosen.

Your profile is considered by the HFI before your repayment capacity is

judged.

If the HFI insists on a personal guarantor, you need to provide one before

the disbursement of your loan.

Your property should be both technically and legally clear before your

loan can get disbursed by the HFI.

In case you have bought an under construction property, your loan will be

partly disbursed, as per the stages of construction and PEMI needs to be

paid on it.

The disbursement, in most cases, will be in the name of the builder or the

seller or the society or the development authority unless you have madesome payment to them.

Repayment of the loan is either via Deduction Against Salary, Post Dated

Cheques, standing instructions or by cash / DD.

You can either choose to repay the loan using the Annual rests or

Monthly rests.

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below:

Upfront Fees

Rate of Interest

Legal and Technical Charges


35/83

35

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

Legal and technical charges :

Some HFIs charge you for the legal and technical checks undertaken on your

documents and property, by lawyers and the technical team of the HFI.

Stamp duty and registration charges:

If you go in for a registered mortgage, these charges incurred by the HFI are

passed onto you. Sometimes these charges are rather heavy depending on the

State laws in the state from where you purchase your property.

Personal Guarantee form charges:

A piece of paper signed does not have much value unless stamped andvalidated by the concerned authority. That power of attorney document that you

signed with your spouse would not be credible unless signed on a Rs.100 stamp

paper. Similarly, HFIs currently charge you a minimum of Rs.100 to get the

personal guarantee validated and stamped in the eyes of the law.


36/83

36

PDC swapping charges:

In case you want to exchange the PDCs you gave the HFIs for EMI repayments

because of a change in bank accounts, a change in EMI amount, etc., the HFismight charge a flat fee for it.

Repayment capacity

Your repayment capacity is judged according to your income and your income

is considered differently if you are salaried and differently if you are self-

employed. Income is used to calculate the amount of money that you will be

able to shell out every month towards your loan installment using IIR and FOIR

norms. FOIR calculation also takes into account the installments of loans you

are currently repaying. The lower between the IIR and FOIR is chosen as your

maximum repayment capacity. This is then compared to the loan amount that

you have requested for and the loan eligibility as per LTV norms and the lowest

of these would be your final loan eligibility.


37/83

37

Salaried Self-employed

Any extra income on your salary slip

(including overtime, etc.) is subtracted

Any non-recurring income that affects

profit (like sale of asset) is subtracted.

50% of the average variable income

over the last 6 months is added

Any non-recurring expense that

adversely affects profits and was not

capitalized (like repairs and

maintenance) is added

Any fixed cash or voucher payment

that can be proved is added.

50% of the average depreciation of the

last two years is added.

HRA that can be received and is not

being received is added.

50% of the average annual income of

the last two years is added.

Credit Documentation

Would you trust any Tom, Dick or Harry with any matter at all? We all requirea certain assurance from people before we trust them; some sort of guarantee

that they are trustworthy. For HFIs this guarantee rests in the form of tangible

documents. Credit documents are required by all HFIs but vary in kind based on

your occupation, employer, qualifications, experience, etc. Credit documents

can be classified as

Income documents:

Money money money...no one can take a chance on the credibility of money

matters because at the end of the day, business is business. Almost everything

about your loan is based on your income and therefore proof regarding the same

is required by the HFI to ensure that no miscommunications occur.


38/83


39/83

39

-Mortgage deed if the HFI opts for a registered mortgage.

No Objection Certificate from the developer, society or development

authority

Personal Guarantees, if required.

Documents for alternate or additional security.

Post dated cheques for the EMIs.

These documents do NOT cover the entire list needed and if it is a resale

property, the pertaining agreements, etc. will also need to be attached.

Tax Benefits

Tax benefits are currently available only under Home Loans and Home

Extension loans. The details are given under the respective sections.

Property Insurance

Some events are not in our hands and are completely unavoidable. Floods,

drought and storms uproot trees and destroy the land. Along with this the birds

lose their homes and while building a nest may not be that bad and the loss is

not that great, the money that you invest in your cosy home might just be

washed away. For this reason insuring your property is a good idea as you

safeguard the asset against damage or loss.. Property insurance is not

compulsory though some HFIs insist on a mortgage redemption life insurancepolicy and you will therefore get a reduced interest rate. Some of the points that

need to be noted regarding property insurance are:

You can choose the tenure of your insurance.

The premium is charged up front

The longer your tenure, the greater the discounts insurance companies


40/83

40

offer you.

News Letter

The Daily Market Strategy is your morning dose on the health of the markets.

Five intra-day ideas, unless the markets are really choppy coupled with a brief

on the global markets and any other cues, which could impact the market.

Occasionally an investment idea from the research team and a crisp round up

of the previous day's top stories. That's not all. As a subscriber to the Daily

Market Strategy, you even get research reports of India Infoline research team

on a priority basis.

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by.

A weekly outlook coupled with the best of the web stories from India Infoline

and links to important investment ideas, Leader Speak and features is

delivered in your inbox every Friday evening.

Portfolio Management

You get recessions. You have stock market declines. If you don't understand

that's going to happen, then you're not ready; you won't do well in the markets.

No need to worry. We at India Infoline would take care of all issues related to

managing your hard earned money.

Our Portfolio Management Service is a product wherein an equity investment


41/83

41

portfolio is created to suit the investment objectives of a client. We at India

Infoline invest your resources into stocks from different sectors, depending on

your risk-return profile. This service is particularly advisable for investors who

cannot afford to give time or don't have that expertise for day-to-day

management of their equity portfolio.

It is all about your money, being managed by the experts, while you continue

with your routine life. Isn't it simple and totally hassle free.

What's more, you can keep track of your dividends / bonus / rights issues with

paperless tracking. So you always know how fast your investment is growing. It

basically means assigning the right job to the right person.


42/83

42

Research

IIFL special research cell where some of India's finest financial analysts

bring you intensive research reports on how the stock market is faring,

when is the right time to invest, when to execute your order and more.

IIFL make sure that investors are always prepared to make own investment

decision when the opportunity arises.

IIFL bring you intensive research reports - whether sectoral or company-wise

or more - that tell you exactly when and where to invest. So whenever there is

an exciting investment opportunity, you are in the know and always ready to

invest. Research reports IIFL will help you choose your investments wisely,

without wasting time. Presented in a lucid and easy-to-understand format;

these reports help you make informed decisions.


43/83

43

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated

with leading asset management companies. It operates primarily in the retailsegment leveraging its existing distribution network to reach prospective

clients. It has received the in-principle approval to set up a mutual fund.

The group recently commenced its offshore asset management business under

the IIFL Capital brand. Also, IIFL Securities Pte Ltd received approval from

the Monetary Authority of Singapore to carry out global asset management

operations. The Singapore arm can now offer broking, asset management and

investment banking services.

IIFL Inc received an FII license, thereby facilitating the investment of

dedicated funds in India.

With offices in New York, Singapore and Dubai, IIFL Capital aims to offer

India-focused equity products, fund management and advisory services for

offshore and domestic wealth management customers.


44/83

44

MILESTONES ACHIEVED

1995

Incorporated as an equity research and consulting firm with a client base thatincluded leading FIIs, banks, consulting firms and corporates.

1999

Restructured the business model to embrace the internet; launched

archives.indiainfoline.com mobilised capital from reputed private equity

investors.

2000

Commenced the distribution of personal financial products; launched online

equity trading; entered life insurance distribution as a corporate agent.

Acknowledged by Forbes as Best of the Web and ...must read for investors.

2004

Acquired commodities broking license; launched Portfolio Management

Service.

2005

Listed on the Indian stock markets.

2006

Acquired membership of DGCX; launched investment banking services.

2007

Launched a proprietary trading platform; inducted an institutional equities team;

formed a Singapore subsidiary; raised over USD 300 mn in the group; launched

consumer finance business under the Moneyline brand.

2008
http://archives.indiainfoline.com/http://archives.indiainfoline.com/http://archives.indiainfoline.com/


45/83

45

Launched wealth management services under the IIFL Wealth brand; set up

India Infoline Private Equity fund; received the Insurance broking license from

IRDA; received the venture capital license; received inprinciple approval to

sponsor a mutual fund; received Best broker- India award from FinanceAsia;

Most Improved Brokerage- India award from Asiamoney.

2009

Received registration for a housing finance company from the National Housing

Bank; received Fastest growing Equity Broking House - Large firms in India

by Dun & Bradstreet.


46/83

46

MARKET SHARES OF COMPANY

Retail broking:

IndiaInfoline has around 3 lakh customers. It has a tie-up with

Bank of Baroda for e-broking.

Institutional broking:

IndiaInfoline has roped in Bharat Parajia, director of sales at CLSA

in Singapore, H Nemkumar, CLSA's country head for India, Aniruddha

Dange, CLSA's head of research in India, and Vasudev Jagannath,

CLSA's head of sales in India. While Parajia will join as head of

institutional sales at India Infoline, Dange will be head of research and

Nemkumar head of investment banking.

Each one of them is bringing in more than 10 years of

experience with a top institutional brokerage in Asia. The CLSA

foursome will also pick up stakes in India Infoline through the

preferential allotment route. Their collective stake would add up to

around 15%. Parajia already holds a 2.88% stake in India Infoline. He

will subscribe to 25 lakh equity warrants at Rs 440 each.Nemkumar will

pick up another 25 lakh, while Jagannath and Aniruddha Dange will

subscribe to 20 lakh warrants each. The preferential allotment includes

the four men buying 90 lakh equity warrants at a price of Rs 440 each, ofwhich 10% will be paid up front as their sign-on bonus. The remaining

will be payable at the end of eighteen months when the warrants will be

convertible into shares.That is, all these guys will have to cough up about

Rs 360 crore to convert their warrants into shares. Currently, the

company's institutional equities team has 35 people, including research

analysts and dealers.


47/83

47

Consumer Finance:

During the quarter, it managed a book size of Rs 25 crore and has

suffered a loss of Rs 5.5 crore. It expects to break even in 2-3 quarters.NIM of 6-8% on personal loans and 3-4% on home refinancing. It is

looking at a Rs 200 crore private-equity funding for its consumer finance

subsidiary. It intends to leverage its extensive branch network to expand

its consumer finance division to tier-II and tier-III cities in the coming

quarters. IndiaInfoline is going slow as it has just started this business

with a robust risk management system. The company has roped in experts

from Citi Financial and other banks.

Ticker: 532636

Exchanges: BOM

2009 Sales: 9,630,900,000

Major

Industry:

Financial

Sub

Industry:

Securities

Brokerage

Country: INDIA

Employees: 14105


48/83

48

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai,

Ahmedabad, and New Delhi accounting for major bulk of the trading.

Competition related - due to high brand proliferation, the market from a

consumer standpoint has become commoditized given product parity in terms

of offerings.

Brand related - challenge being to maintain high decibel and impactful

communication on a sustained basis.

Key executives

S.No Name Designation

1 Mr. Nirmal Jain Chairman and Managing director

2 Mr. A K Purwar Director

3 Mr. R Venkataraman Executive Director

4 Mr. Nilesh Vikamsey Independent Director

5 Mr. Kranti Sinha Independent Director

6 Mr. Sat Pal Khattar Non Executive Director


49/83

49

MARKETING STRATEGY OF INDIA INFOLINE

Market Positioning:

Market positioning statements of India Infoline are At India Infoline we

give you single window service and We also ensure your comfort. So, India

Infoline focus on the consumers who prefer almost all investment activities at

same place by providing number of various financial services. At India Infoline

a person can purchase or sell shares, debentures etc. and at the same place also

demat it. India Infoline 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 India Infoline

provides comfort to its customers.

Target Market:

India Infoline uses demographic segmentation strategy and segment

people based on their occupation. India Infoline uses selective specialization

strategy for market targeting. Target person for the India Infoline Stock Broking

and India Infoline 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:

India Infoline 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


50/83

50

channel. Company distributes 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:

India Infoline provides training to the sub-brokers because they will be

viewed as the company by the investors. The executives of India Infoline

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 India Infoline is to create awareness about

services of India Infoline among investors and sub-brokers.

India Infoline also publishes its weekly Stock Market Newsletter Market

Mantra.


51/83

51

HUMAN RESOURCES

The India Infoline Groups Human Resources policy is based on the philosophy

of Owner Mindset. We believe that the key to our continued growth lies in

unleashing the entrepreneurial energy of our employees. We encourage all

employees to behave more as 51owners of their departments rather than

employees. Our people are highly driven and work towards increasing India

Infolines brand and market share across product lines.

We have developed extensive in-house training modules. In addition, our staff

is trained by various Asset Management Companies and ICICI Prudential Life

Insurance Company Limited. We lay emphasis on on the job training where

an experienced and senior person mentors a junior executive.

In addition to salary, our employees get performance-based incentives on a

quarterly basis. We have also implemented an Employee Stock Option Plan.

As on December 31, 2009, the total employee strength of our company and our

subsidiaries was 1200.


52/83

52


53/83

53

RESEARCH METHODOLOGY

i) Objective of the Study:

To know percentage of people invest in mutual fund, insurance, equityand other financial products and services.

To know future prospects of their investment in the financial productsand services.

ii) Data Collection:

Primary data:-

Primary data are data freshly gathered for a specific purpose. The various

sources of primary data for my project are as follows.

Banks.

Local residents. People from industries Mall

Small Retailers

Secondary Data:-

Secondary data provide a starting point for research and offer the

valuable source of information.

The secondary data was the most important source for my project because itgave us information about company profile, competitors, market scenario,

market share, etc.

It also give us information of the financial industry, its emergence,& its

importance in country progress.

We used secondary data for following sources:

Internet

Indiainfoline brochure


54/83

54

FUNDAMENTAL RESEARCH SERVICES:

The Sunday Weekly Report :

This weekly report is the ace of all reports. It offers a

comprehensive market overview and likely trends in the week ahead. It

also presents few top picks based on an in-depth analysis of technical and

fundamental factors. It gives short term and long term outlook on these

scrips, their price targets and trading strategies. Another unique feature

of this report is that it provides an updated view of about 70 prominentstocks on an ongoing basis.

The Industry Watch :This report provides an in-depth analysis of specific industries

which are likely to outperform others in the economy. It analyzes their

strengths and weaknesses and ascertains their future outlook. The final

view is arrived at after thorough interaction with industry experts. Also

comparative performances of various companies in the sector are

evaluated and top picks are recommended.

Stock Analysis :Indiainfoline stock research has performed very well over the past

few years and the Indiainfoline Model Portfolio has consistently

outperformed the benchmark indices. The fundamentals of select scrips

are thoroughly analyzed and an actionable advice is provided along with

investment rationale for each scrip.

Flash News :

Key developments and significant news announcements that are

likely to have an impact on markets / scrips are flashed live on trading


55/83


56/83

56

Derivative Strategies :Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools. Suitable Derivative Strategies are

devised, which are flashed on their terminals and published in their

reports.

Futures Calls :A customized product for HNIs to help them trade with leveraged

position; wherein clients are advised on the stocks with entry, exit and

stop loss level for short term benefits. Over and above this, financial

status of the calls is monitored at all times.

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed

the way firms operate in the broking industry. We recognize that technology is

an important tool for broking operations.

We believe that online trading will gain market share due to significant

advantages that it offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances, problems and

bugs

The IndiaInfoline Group have invested in technology and ensured that we

have an optimum infrastructure to handle the load. Our current technology

infrastructure comprises several high ends Dell, HP, IBM servers running on

Microsoft Operating System. Most of these servers support online customers for


57/83

57

trading activities and users for the www.indiainfoline.com and www.5paisa.com

websites.

The IndiaInfoline Groups main trading servers (application and database

servers) are located at our Goregaon office and our broadcast servers are hosted

at VSNL and Reliance Internet Service Providers (ISP). Our website is hosted

with Net Magic Solutions, another ISP. All the three ISPs and our Goregaon

office are equipped with latest servers and uninterruptible power supply

systems. The Goregaon office is connected to the internet by optic fiber to Net

Magic Solutions which gives us bandwidth of more than 10Mbps expandable to

20Mbps. Our connectivity between the internal and external servers is through

this fiber connection.

Net Magic Solutions sources bandwidth from VSNL and Bharti, thereby

providing us with redundancy in the event of a failure of one of the providers

gateway. By co-locating some servers with Reliance Infocom we have further

increased our redundancy.The IndiaInfoline Group has implemented CISCO Pix firewall, managed by

Net Magic. All our servers, routers and desktops are behind this firewall. All

connections to our trading servers happen in a secure manner using 128 bit

encryption. We have a security certification from Thawte.

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network


58/83

58

- Networking and hardware

- Security

SWOT Analysis:

Strengths

Integrated technology platform One Stop shop Pan - India distribution network

India Infoline.com and 5paisa.com have developed into brands

Weaknesses

Lack of a banking arm to complete the bank-broker-depository chain Insignificant presence in institutional Segment

Opportunities

Changing demographics with higher disposable income and increasinglycomplex financial instruments will drive demand for investment advisory

services

Rapid penetration of Internet and computers means that technology enabledfinancial services will gain market share

Threats

Economic slowdown Volatile movement in indices events like May 17, 2004

Stock markets falls will have a cascading effect on our mutual fund

mobilization Increase/decrease in interest rate can affect our debt/ income fundmobilizations

Future changes in personal taxation rules can impact insurance sales Increasing competition from large and particularly foreign players


59/83

59

PORTERS FIVE FORCE MODEL

Competitive Force: - Michael Porter has identified five forces that determine theintrinsic long-run profit attractiveness of a market or market segment.

Industry competitors Potential entrants.

Substitutes.

Buyers. Suppliers

Intensity of Competition:

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller

ones becoming either franchisees for the larger brokers or closing operations.

Increased Focus of Banks in Retail Broking:

Various foreign banks like ABN Amro and others are planning to enter the

Indian retail brokerage industry.

Online Trading Competes with Traditional Brokerage:

There is an increasing demand for online trading due to consumers growing

preference for internet as compared to approaching the brokers.

Threat of New Entrants

Entry of Foreign PlayersNew forms of trading including T+2 settlement system, dematerialization etc

are strengthening the retail brokerage market and attracting foreign companies

to enter the Indian industry.Threat of Substitutes

Alternative Investment Options

Various alternative forms of investment including fixed deposits with banks and

post offices etc act as substitutes to retail broking products and services.


60/83

60

Buyer Power

Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector

that calls them to approach the broking houses.

Low Product Differentiation Proves Beneficial:

The retail broking services provided by the various companies are homogeneous

with very low product differentiation. This allows customers to enjoy a greater

bargaining power.

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising

number of IPOs coming to the market.


61/83

61


62/83

62

Financial Performance

Year 2007-08

List Revenue Profit beforeinterest,

depreciation

and tax

Profit after tax

Indiainfoline

Ltd.

6,724.4 2,772.5 1,286.9

India Infoline

Investment

Services Ltd

1,522.1 1,208.9 315.5

MoneylineCredit Ltd

113.2 19.4 20.7

India Infoline

Distribution

Company Ltd

18.4 71.3 56.0

India Infoline

Marketing

Services Ltd

405.0 129.7 75.3

India Infoline

Insurance

Services Ltd

688.1 4.2 41.7

India Infoline

Commodities

Ltd

170.1 14.7 8.3

India Infoline

Media and

823.8 98.1 63.0


63/83

63

Research

Services Ltd

Othersubsidiaries

96.9 62.4 51.2

Inter-company

adjustments

326.1 169.2 42.5

Aggregate 10,235.9 4,022.2 1,639.3

This is the tabel represents the Revenue, profit before interest, depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment. If we see this table we will find that the total revenu for 2008-09

was 10235.9, and 4022.2 is his profit before interest, depreciation and tax which

is

4022.2 * 100 =39.3%

10235.9

And if we calculate the profit on total revenue it will be

1639.3 * 100 =16.01%10235.9

And if we calculate the total Interest, depreciation and tax they will be

4022.2-1639.3=2382.9

Rs. MnLists 2007-08 2007-06

Gross Income 6724.4 2867.2

Profit before interest, depreciation

and

taxation

2,772.5 983.4


64/83

64

Interest and financial charges 211.6 63.9

Depreciation 194.4 123.3

Profit before tax 2,366.5 796.2

Taxation - Current 793.4 260.7

- Deferred 20.3 2.4

- Fringe benefit tax 10.9 11.9

- Short or excess provision of

income-tax

5.3 0.0

Net profit for the year 1,577.2 521.2

Less: Extraordinary items (Net of

tax)

290.4 0.0

Less: Appropriations

Dividend:

Interim dividend 0.0 149.6

Proposed final dividend 342.6 0.0

Dividend distribution tax 58.2 21.0


65/83

65

Transfer to general reserves 131.0 53.0

Add: Balance brought forward

from previous year

474.1 83.5

Add: Other adjustments (profits of

India

Infoline Securities Private Limited

added

pursuant to merger)

0.0 93.0

Balance to be carried forward 1,229.1 474.1

Profit & Loss account of India Infoline

------------------- in Rs. Cr. -------------------

2009 2008

INCOME

Sales Turnover 542.27 616.11

Excise Duty 0.00 0.00

Net Sales 542.27 616.11Other Income 29.34 27.29

Stock Adjustments 0.00 0.00

Total Income 571.61 643.61

EXPENDITURE

Raw Materials 0.00 0.00

Power & fuel Cost 0.00 0.00

Employee Cost 136.91 128.79


66/83

66

Other Manufacturing Expenses 93.32 105.93

Selling & Admin Expense 112.16 119.13

Miscellaneous Expense 41.03 39.67

Preoperative Exp. Capitalists 0.00 0.00

Total Expenses 383.42 393.42

OPERATING PROFIT 158.85 222.59

PBDIT 188.19 249.88

Interest 11.15 22.82

PBDT 177.04 227.04

Depreciation 25.56 19.44

Other Written Off 0.00 0.00

Profit Before Tax 151.48 207.62

Extra Ordinary Items 2.23 -0.53PBT(post extra-ord items) 153.71 207.09

Tax 47.88 78.39

Reported Net Profit 105.83 157.73

Total value Addition 383.42 393.53

Preferred Dividend 0.00 0.00

Equity Dividend 79.45 34.36

Corporate Dividend Tax 13.50 5.82

Per Share DataShare in Issue(in Lakhs) 2,834.00 571.03

Earning Par Share(Rs) 3.73 27.62

Equity Dividend (%) 140.00 60.00

Book Value(Rs) 36.58 17335

This is the Profit and loss account for the years 2007-08 and 2008-09. In which

we can see that the turnover, sale and other profits have decreased from the

2007-08 to 2008-09, which is an impact of recession.

The total income is also decreased from 643.61 to 571.61 in 09, which is around

11.19% of the previous year or 72 cr.

In the expenditure part of 2008-09 as compare to previous yes it has also

decrease from 393 to 383 which is around 3%. In this the total is decreased

instead of increase in employee cost and Miscellaneous Expense to gain

the better profit.


67/83

67

Operating profit was decrease from 222 to 158, approximate 28.82%, from the

year 2007-08 to 2008-09.

Report net profit is decreased from 157.73 to 105.83

Share in issued has increase from 571.03 to 2834.00

Earning per share has come down from 27.62 to 3.73 which is 90%

Balance Sheet in Cr.

2009 2008

Sources offunds

Share capital 56.68 57.10

Reserve &surplus

980.13 932.75

Equity sharewarrants

11.37 59.77

Net worth 1048.18 1040.62

Loan funds

Secured loan 1.70 -Unsecured loan 00.10 130.56

Total Liability 1049.98 1180.19

Applicationfunds

Fixedasset(includingintangibles)

Gross block 143.67 98.31

Less:accumulateddepreciationandamortization

44.94 35.07

Net block 98.73 63.72

Capital work inprogress

4.51 00.49

103.24 63.73


68/83

68

Investment 873.71 915.68

Currents assetloan andadvance

Sundry debtors 103.52 342.81Cash & bankbalance

264.10 061.62

Stock on hand 166.72 154.06

Loan & advance 244.41 313.89

778.75 872.38

Less: currentliabilities &provision

Currentliabilities

552.68 514.85

Provisions 148.64 156.74

Total 701.31 671.59

Net currentassets

77.43 200.79

Total of Assets 1049.98 1180.19

This is the Balance sheet of IndiaInfoline showing the comparison for the

period of 2007-08 and 2008-09.

In this we can see that the total has come down from 1180 to 1049 in 2008-09

period. Which is all the impact of recession not only on this broking firm, on all

others too, the same impact was their in this period, their is a cost cutting and

reduction on other expenses.

The biggest of this can be seen on the liability side on unsecured loans which

has come down from 130.57 to 00.10, which is more then 99%, organization

has increased his cash from 61.62 to 264.10 for the period of 2008-09 as

compare to 2007-08.


69/83

69

COMPETITORS

(ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP.(Rs.cr

)

SALES

TURNOVE

R

NET

PROFIT

TOTAL

ASSET

INDIABULLS 135.20 4188.09 2003.09 99.451 14722.36

INDIA

INFOLINE

141.30 4004.44 571.57 103.59 1049.99

EDELWEISS CAP 470.00 3,525.20 191.39 26.39 1,865.28

MOTILAL

OSWAL F

170.80 2,443.58 57.26 45.31 433.49

HSBC INVEST 264.00 1,843.68 24.31 -15.21 667.45

FUTURECAPITAL

230.50 1,464.32 132.44 9.31 1,216.75

NETWORK 18 90.20 865.07 94.50 -19.41 862.11

GEOIIT BNP 37.80 847.03 140.56 14.39 276.06

DELTA CORP 43.30 723.81 42.73 8.31 356.87NALWASONS

INV

1,210.0

0

621.48 14.78 11.26 270.90

This table represent the comparision between the indiainfoline and other share

broking firms or inverstment organisation, which includes last price of share,

market capital, sales turnover, net profit and total assets.


70/83

70

This graph shows thr last share price of the organisation, in this we can see that

Nalwasons investment has the highest share price, as compare to others it is

very high. The indiainfoline stand very short in this.

When it comes to market capital the Indiabulls has the highest market capital,

and second is Indiainfoline just behind of Indiabulls and rest other are no ware

in this graph.

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

0

500

1000

1500

2000

2500

3000

3500

40004500

Market capital

Market capital


71/83


72/83


73/83

73

securities

ICICI direct 500/- 975/- 0.075- 0.05 450/- 5 times 2124

Motilal oswal 415/- NotRestricted

0.03- 0.30 300/- 4 times 430

Religare 299/- 5000/- 0.025-0.25 Nil 20 times 1837

Angel broking 731/- 5000/- 0.03- 0.30 300/- 4 times 120

Geojit 650/- Nil 0.03- 0.30 Nil 20 times 500

India bulls 900/- Nil 0.03- 0.30 Nil 20 times 718

Reliance

money

750/- Not

Restricted

0.05- 0.25 50/- 5 times 10000

Share khan 750/- 5000/- 0.03- 0.30 500/- 4 times 250

Hdfc 799/- 5000/- 0.05-0.50 500/-

from

2 nd

yr

5 times NA

This is comparative study based on the charges made by Indiainfoline and other

broking firms. In this it take lowest charge to open an accout and providing an

appropriate brokerage to his clients as compare to few others. And low margin

money and it has a total of more then 600 branc all over India, which is very

good in number and very less as compare to Reliance, kotak securities, ICICIsecurities and Religare, so that they can provide a proper attention towards his

clients and manages thaind in better was, thats the reason we have seen about

they have good amout of net profit with less investment.

Thats the reason they have a line ITS ALL ABOUT MONEY, HONEY


74/83


75/83

75

Wealth and asset Management Introduce the family officeplatform.

Raised around Rs.1.8 bl in thelargest single day debenture

listing of its kind. Received in principle approval

for sitting up of Mutual Funds.

Establish the infrastructure andknowledge capital for Office

Store Asset ManagementServices.

Highlights, 2008-09 Industry optimism

Wealth management

Mobilised Rs 1.8 bn in the largest single-day debenture listing of its kind

Built relationships with many reputed families across India and the globeAsset management

Received the in-principle approval from SEBI to sponsor a Mutual fund

IIFL Securities Pte Ltd received approval from the Monetary Authority of

Singapore to carry out corporate advisory and dealing in securities. The

Singapore arm can now offer

broking, asset management and investment banking services

IIFL Inc received an FII license, thereby facilitating the investment of

dedicated funds in India

Setup a team of experienced professionals for the offshoreasset management

business


76/83

76

Key Takeaways from India Infoline concall:

India Infoline was the Global coordinator and BRLM for the QIP of

Emami Limited and the Co-BRLM to the QIP of Cipla Ltd. Also, they

were the Syndicate members to Adani Power IPO in July 2009.

The first premium mobilization from insurance broking business stood at

Rs 410 million.

The net NPA on the books continue to remain less than 1%.

Its core business improved significantly.

Its market share remains same at 3.6%.

Average daily equities volumes stood at Rs 33.36 billion as compared to

Rs 32.25 billion in the previous quarter.

The company's customer base improved to 33%.

Its financial income grew by 48.7%.

Its employee cost was of Rs 7.36 million.

Administrator cost grew by 28% at Rs 507 million, QoQ.

Depreciation coat stood at Rs 131.5 million.

Interest coat was of Rs 155 million.

Its advertisement cost was of Rs 24 million.

Its cash and cash equivalent stood at Rs 9.3 billion and debt was at Rs

300 millions.


77/83

77


78/83

78

FINDINGS

Brokerage of India infoline is higher than Others broking firms likeReligare,Motilal Oswal,Indiabulls,they are charging 0 .03% for Intraday

and 0 .30% for Delivery where India Infoline is taking 0 .05% for

Intraday and 0 .50% for Delivery.

Margin money of India infoline is higher than other firm like

Indiabulls,Geojit,Motilal Oswal,there is no restriction of margin

moneye.But in India Infoline,the minimum margin money should be

5000/2555 rs..

Exposure is less than other firms. India Infoline offers eight times

exposure on margin where as Religare and Indiabulls offer twenty times

exposure on margin money.

HDFC, ICICI direct provide their customers three types of account (de-

mat a/c, trading a/c, bank a/c) but India infoline provide only De-mat a/c

and Trading a/c.

Religare takes Rs.299 for lifetime services, where as India infoline takes

Rs.555.

Relationship manager changes many times, it creates problem for the

offline customers .

Securities are not so much reliable.

India Infoline has hidden charges, Customer are not much aware about

that.

Customer satisfaction of India infoline not so good.


79/83

79

Most of the customers are trading offline.

Most of the customers approach towards the broking firm is through the

relationship manager.

Most of the people are not much aware of share market and its benefit.


80/83

80

Recommendation

To increase awareness about Share Market and the name India Infoline

itself, the company should organize campaign. The campaign can be

weakly, monthly, yearly, it will give a good result to the company to

capture market in the competitive position.

The company should reduce the margin money. It can help to acquire

more customers, if the firms bring plans for no boundation of margin

money.

The Company should increase their focus on the less margin money

customers also .It can