Relance Money Project

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Share Trading and Mutual Fund

A CUSTOMER PERSPECTIVE

SUMMER PROJECT REPORT

In partial fulfillment for the award of two year full timeMaster of Business Administration (MBA) degree of Uttar Pradesh Technical University, Lucknow

Submitted byANUJ HALDIYA

Roll No.:0827270011

Under SupervisionRAMESH YADAV

Designation: Branch Manager Name of Company: RELIANCE MONEY

Submitted to:

Uttar Pradesh Technical University ,LucknowGreater Noida Instiute of Tecnology-MBA Institute

7,konowledge Park-II

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Greater Noida -201306

2

S .NO CONTENTS PAGE NO1 CERTIFICATE 3-4

2 DECLARATION 5

3 ACKNOWLEDGEMENT 6-7

4 LIST OF GRAPHS 8

5 INTRODUCTION 9-17

6 REVIEW OF RELATED LITERATURE 18-56

7 DESIGN OF STUDY 57

8 THE STUDY 58-66

9 OBJECTIVE OF STUDY 67

10 DATA COLLECTION SOURCE 68

11 DATA COLLECTION METHOD 69-72

12 ANALYSIS OF DATA 73-92

13 FINDINGS 93-95

14 CONCLUSION AND RECOMMENDATION 96-98

15 REFRENCES 99

16 BIBILIOGRAPHY 100

17 QUESTIONNAIRE 101-104


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CERTIFICATE

This is to certify that the Summer Training Project Report entitled Share

Trading and Mutual Fund A CUSTOMER PERSPECTIVE being

submitted by Mr. Anuj Haldiya in partial fulfillment of the requirement for the degree of the Master of Business Administration from U. P. Technical

University, Lucknow, is an independent original research work done by him

under my supervision and guidance.

Place: Gr. Noida Director

Date: GNIT- MBA Institute

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DECLARATION

This is to certify that Mr.Anuj Haldiya , a student of master Degree MBA

(2008-2010), Greater Noida Institute of Technology, Uttar Pradesh Technical

University, Uttar Pradesh has worked on the Project Share Trading andMutual FundA CUSTOMER PERSPECTIVE.

The period for which he was working on this project was for 6 weeks, starting

from 1 June, 2009 to July 18, 2009. This dissertation report has the requisite

standard for the partial fulfillment the master Degree in master of Business

Administration. To the best of our knowledge, the contents are based on

original research.

ANUJ HALDIYA

ROLL NO:-

0827270011

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ACKNOWLEDGEMENT

It has been very enriching experience working in RELIANCE MONEY

(Anil Dhirubhai Ambani Group), Bareilly (U.P.). This department deals

with all products like DMAT A/c, Share Trading, Mutual Fund, Life

Insurance and General Insurance etc.

I am extremely thankful to everyone who has helped me to give this project

its present form. I am very thankful to Mr. Anand Prakash (Center

Manager) and Mr. Ramesh Yadav (Branch Manager) for providing me the

opportunity to undergo the practical training in the Sales and Distribution

Division of Reliance Money Limited under the supervision of Mr. Ramesh

Yadav (Assistant Center Manager). He guided me from time to time and

gave me dynamic ideas and suggestions by which I am able to complete my

training successfully.

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I am thankful to the . Reliance Money Limited staff members who made

me feel comfortable during my training period & helping me in completion

of work assigned during the training period.

I sincerely thank all the visible and non-visible hands, which helped me tocomplete the practical training with great success.

Last but not least I would like to thank my family who have always

encouraged me and taught me to think and work out innovatively,

whatsoever is the field of life .To be very candid, whatever I know about

marketing concept that has been possible due to the well managed intense

training education imparted under conditions, which are quite conducive to

learning, at my institute Greater Noida Institute Of Technology, Mgt.

Institute Gr. Noida.

Education and acquisition of knowledge has no limits or boundaries. It is an

ever expanding field and we need to keep our faculties straight and absorb

this vast ocean of knowledge, as much as we can. Doing things we not only

widen our personal horizons but also able to present ourselves as a more

intelligent being in front of other.

ANUJ HALDIYA

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LIST OF GRAPHS

Sr. No. Topic1 Preference of investment2 Awareness of online share trading3 Preference of investing in stock market4 Awareness of reliance money as a brand5 Awareness of reliance money facilities6 Customers having de-mate account in companies7 Frequency of investment8 Percentage of earnings invested in Share Trading9 Problems faced during trading

10 Rating of products of Reliance Money11 Customer awareness for the different brokerage company12 Preference toward Mutual Funds13 In which type of mutual fund people invest their money

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14 What people see before investing in share market?15 Comparison of Reliance money against other brokerage company16 According to the Family expenses

CHAPTER -1

INTRODUCTION

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COMPANY PROFILE

Reliance money is a part of the reliance Anil Dhirubai Ambani Group and is

promoted by Reliance capital, the fastest growing private sector financial

services company in India, ranked amongst the top 3 private sector financial

companies in terms of net worth.

Reliance money is a comprehensive financial solution provider that enables

you to carry out trading and investment activities in a secure, cost-effective

and convenient manner. Through reliance money, you can invest in a wide

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Reliance Capital

RelianceLife Insurance

RelianceGeneral Insurance

RelianceMoney

RelianceConsumer

Finance

RelianceMutual fundMutual Fund


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range of asset classes from Equity, Equity and commodity Derivatives, Mutual

Funds, insurance products, IPOs to availing services of Money Transfer &

Money changing.

Reliance Money offers the convenience of on-line and offline transactionsthrough a variety of means, including its Portal, Call & Transact, Transaction

Kiosks and at its network of affiliates.

Some key steps of the company that are as..

Success is a journey, not a destination. If we look for examples to prove

this quote then we can find many but there is none like that of Reliance

Money. The company which is today known as the largest financial service

provider of India.

Success sutras of Reliance Money:

The success story of the company is driven by 8 success sutras adopted by it

namely trust, integrity, dedication, commitment, enterprise, hard work

and team play, learning and innovation, empathy and humility. These

are the values that bind success with Reliance Money.

Vision of Reliance Money

To achieve & sustain market leadership, Reliance Money shall aim for

complete customer satisfaction, by combining its human and technological

resources, to provide world class quality services. In the process Reliance

Money shall strive to meet and exceed customer's satisfaction and set industry

standards.

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Mission statement:

Our mission is to be a leading and preferred service provider to our

customers, and we aim to achieve this leadership position by building an

innovative, enterprising , and technology driven organization which will

set the highest standards of service and business ethics.

BUSINESS OVERVIEW

Reliance Capital has interests in asset management and mutual funds, life and

general insurance, private equity and proprietary investments, stock broking,

depository services, distribution of financial products, consumer finance and

other activities in financial services.

Reliance Mutual Fund is India's no.1 Mutual Fund. Reliance Life Insurance is

India's fastest growing life insurance company and among the top 4 private

sector insurers. Reliance General Insurance is India's fastest growing general

insurance company and the top 3 private sector insurers. Reliance Money is

the largest brokerage and distributor of financial products in India with more

than 2.5 million customers and the largest distribution network. Reliance

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Consumer finance has a loan book of over Rs. 8,000 crores at the end of June

2008.

Reliance Capital has a net worth of Rs.6,862 crores (US$ 1.6 billion) and total

assets of Rs. 19,940 crores (US$ 4.6 billion) as of June 30, 2008 and over 26,000 employees.

Money has increased its market share among private financial companies to

nearly Convenient & effective Anytime & anywhere financial transaction

capability. Launched in April 2007. It provides the Flat fees system. It has 2.2

million customers in 1 year of official launch. It has over 5,000 outlets across

700 towns/cities. Average daily turnover in excess of Rs 2,000 crores.

Considering the entire life market, including the Rs. 12,890 crores booked by

life insurance Corporation, Reliance life insurance market share works out to

around 6.25% .

The life insurance market continuous to be dominated by LIC which has about

67% share this only a marginal dip from its 73% share in end-July . These

comparisons are only for first year or new business premium.

The gap between Reliance life insurance and the second-in-line private insurer

is vast. In fact, this scenario has led some analysts to wonder if the company is

not a trifle too aggressive. But others say this has more to do with the

companies customer-centric focus, its pan-India presence and superior risk

management and investment strategies. Reliance Money is not, however,

resting on its laurels.

Companys customer centric approach will be studied during the training

period and the finding of the research work will definitely focus on the present

condition & future requirement (if any) relating to products of company.

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BOARD OF DIRECTORS

Anil Dhirubhai Ambani - Chairman

Regarded as one of the foremost corporate leaders of contemporary India, Shri

Anil D Ambani, 50, is the chairman of all listed companies of the Reliance

ADA Group, namely, Reliance Communications, Reliance Capital, Reliance

Energy, Reliance Natural Resources and Reliance Power. He is also Chairman

of the Board of Governors of Dhirubhai Ambani Institute of Information and

Communication Technology, Gandhi Nagar, Gujarat. Till recently, he also

held the post of Vice Chairman and Managing Director in Reliance Industries

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Limited (RIL), India's largest private sector enterprise. Anil D Ambani joined

Reliance in 1983 as Co-Chief Executive Officer, and was centrally involved in

every aspect of the company's management over the next 22 years. He is

credited with having pioneered a number of path-breaking financialinnovations in the Indian capital markets. He spearheaded the country's first

forays into the overseas capital markets with international public offerings of

global depositary receipts, convertibles and bonds. Starting in 1991, he

directed Reliance Industries in its efforts to raise over US$ 2 billion. He also

steered the 100-year Yankee bond issue for the company in January 1997.

Amitabh Jhunjhunwala - Vice-Chairman

Shri Amitabhabh Jhunjhunwala, 51, is a Fellow Chartered Accountant. He has

vast experience in the areas of financial services and capital markets. Shri

Jhunjhunwala was appointed to the Board on March 7, 2003 and was

appointed Vice Chairman on March 20, 2006. He is a Director on the Board of

Harmony Art Foundation and Reliance Anil Dhirubhai Ambani Group Pvt.

Ltd.

Rajendra Chitale - Independent Director

Shri Rajendra P. Chitale, 46, an eminent Chartered Accountant, is the

Managing Partner of M/s M. P. Chitale & Associates. He is a Director on

boards of the National Securities Clearing Corporation Limited, Asset

Reconstruction Company (India) Ltd, Hinduja TMT Limited, HTMT Global

Solutions Ltd, Ambuja Cement Limited, SME Rating Agency of India

Limited, Ishan Real Estate PLC and Reliance General Insurance Company

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Ltd. He is also a member of the advisory board of the Insurance and

Regulatory Authority of India (IRDA). He has also served on the boards of

Life Insurance Corporation of India, Unit Trust of India, SBI Capital Markets

Ltd., National Stock Exchange of India Ltd. and Small IndustriesDevelopment Bank of India.

Shri C. P. Jain

Shri C.P. Jain, 61, is the former Chairman and Managing Director of NTPC

Ltd. (National Thermal Power Corporation). Shri Jain has an illustrious career

spanning over four decades of contribution in the fields of financialmanagement, general management, strategic management and business

leadership. He is a fellow member of the Institute of Chartered Accountants of

India with an advanced diploma in Management and is a law graduate. Shri C.

P. Jain joined the Board of NTPC in 1993 as Director (Finance), was elevated

as Chairman & Managing Director in September 2000 and superannuated in

March 2006. He is Chairman of the Global Studies Committee of World

Energy Council (WEC), world's largest energy NGO with nearly hundred

member-nations. He has been on several important committees of the

Government of India, latest being the 'Adhoc Group of Experts on

Empowerment of CPSEs'. He was Chairman of Standing Conference of Public

Enterprises (SCOPE) between April 2003 and March 2005. He is a Director

on the Board of IL & FS Infrastructure Development Corporation and, is also

a member of the Audit Advisory Board of the Comptroller and Audit General

of India.

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COMPANY PRODUCTS

Reliance Money is a comprehensive solutions provider offering a complete

basket of financial services. Through Reliance Money, currently, a

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customer will be able to transact amongst others, in equity and commodity,

derivatives, offshore investments, IPOs, mutual funds and insurance

products.

At the present the company has more than 350 employees across 75locations with a total number of 42 offices.

Reliance Money can be segregated into four main products which include:

1. Reliance Life Insurance Plans

2. Reliance General Insurance Policies

3. Reliance Mutual Funds

4. Reliance On Line Trading Facility

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CHAPTER-2

REVIEW OF RELATED

LITERATURE

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RELIANCE DEMATE ACCOUNT

Overview of Demat Account.

In India, a Demat account , the abbreviation for dematerialised account , is a

type of banking account which dematerializes paper-based physical stock

shares. The dematerialised account is used to avoid holding physical shares:

the shares are bought and sold through a stock broker.

This account is popular in India. The Securities and Exchange Board of India

(SEBI) mandates a demat account for share trading above 500 shares. As of

April 2006, it became mandatory that any person holding a demat account

should possess a Permanent Account Number (PAN), and the deadline for

submission of PAN details to the depository lapsed on January 2007.

Procedure

1. Fill demat request form (DRF) (obtained from a depository participant or

DP with whom your depository account is opened).

2. Deface the share certificate(s) you want to dematerialise by writing across

Surrendered for dematerialisation.

3. Submit the DRF & share certificate(s) to DP. DP would forward them to the

issuer / their R&T Agent .

4. After dematerialisation, your depository account with your DP, would be

credited with the dematerialised securities.

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Reliance Money Demat Account Services

Reliance Money Transacting and investing simplified.

Get ready to change the way you transact and invest in financial products and

services.

Whether you wish to transact in equity, equity & commodity derivatives,

IPOs offshore investments or prefer to invest in mutual funds, life & general

insurance products or avail money transfer and money changing services, you

can do it all through reliance money.

Simply open a reliance money account and enjoy the convenience of handling

all your key financial transactions through this one window.

Benefits of having a reliance money account

Its cost effective

You pay comparatively lower transaction fees. As an introductory offer, we

invite you to pay a flat fee of just Rs. 500/- and 750/- and transact through

reliance money. This fee is valid for two months or a specified transaction

value

See the table below for details.

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Its offers single window access

Through reliance moneys associates, you can transact in equity, equity and

commodities derivatives, offshore investments mutual funds, IPOs life

insurance, general insurance, money transfer, money changing and credit

cards, amongst others.

Its convenient

You can access reliance moneys services through

The internet

Transaction kiosks

The phone (call & transact)

Our all India network of associates

On an assisted trade (through the call centre or our network of associates) a

charge of Rs 12 per executed trade will be applicable.

Its Safe

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Your account is safeguarded with a unique security number that changes every

32 seconds. This number works as a dynamics password to keep your account

extra safe.

Its provides you a demat account

You get your own demat account with reliance capital at an annual fee of just

Rs. 50/-.

Its provides you a 3-in-1 facility .You can access your banking, trading and demat account through a single

window and transfer funds across accounts seamlessly.

It provide you value- added services

At www.reliancemoney.com, you get

Reliable research, including views of external experts with an enviabletrack record

Live news updates from Reuters and Dow Jones

CEOs / expert views on the economy and financial markets

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Tools that help you plan your investments, tax, retirement, etc. in the

personal finance section

Risk Analyser for analysis of your risk profile

Asset allocators to build an appropriate investment portfolio

Reliance Money provides 3 different trading platforms for equity trading:

Insta Trade

Fast Trade

Easy trade

The benefits

A safe and convenient way to hold securities;

Immediate transfer of securities;

No stamp duty on transfer of securities;

Elimination of risks associated with physical certificates such as bad

delivery, fake securities, delays, thefts etc.;

Reduction in paperwork involved in transfer of securities;

Reduction in transaction cost;

No odd lot problem, even one share can be sold;

Nomination facility;

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Change in address recorded with DP gets registered with all companies

in which investor holds securities electronically eliminating the need to

correspond with each of them separately;

Transmission of securities is done by DP eliminating correspondencewith companies;

Automatic credit into demat account of shares, arising out of

bonus/split/consolidation/merger etc.

Holding investments in equity and debt instruments in a single account.

Required Documents

The extent of documentation required to open a demat account may vary

according to your relationship with the institution. If you plan to open a demat

account with a bank, a savings, current and, or other account for which the

holder have been issued a check book, such holder has an edge over the non-

account holder. In fact, banks usually offer additional incentives to customers

who open a demat account with them. Along with the application form, your

photographs (with co-applicants) and proof of identity/residence/date of birth

have to be submitted. The DPs also ask for a DP-client agreement to be

executed on non-judicial stamp paper. Here is a broad list:

A canceled check, preferably MICR Proof of Identification

Proof of Address

Pan card (mandatory)

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Recent photographs, one and, or more

For proof of identification and, or address self-attested facsimile copies of

PAN card, Voters ID, Passport, Ration card, Drivers license, Photo credit

card, Employee ID card, Bank attestation, latest IT returns and, or latest

Electricity/Landline phone bill are sufficient. While they only ask for

photocopies of the documents, they will need the originals for verification.

Points To Remember

1. Only securities admitted by NSDL can be dematerialised. The list is

available with your DP.

2. Only securities registered in the name of the account holder can be

dematerialised.

3. Dematerialisation is normally completed within 15 days after the share

certificates have reached the issuer/ their R&T Agent. Thus it may take

you a month from the date you hand over shares, to receive demat

credit.

4. Dematerialisation would be done only when the issuer / their R&T

Agent is satisfied of genuineness of securities & ownership status.

5. All the joint holders should sign the DRF.

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6. The pattern of holding in the DRF should match the pattern of holding

on the share certificate & the pattern in which account is opened.

7. Demat requests with name(s) not matching exactly with the name(s)

appearing on the certificates merely on account of initials not beingspelt out fully or put after or prior to the surname, would be processed,

provided the signature(s) of the client(s) on the DRF tallies with the

specimen signature(s) available with the issuer/ their R & T agent.

8. If the signature in the DRF does not match with the signature available

with the issuer/ their R & T agent, the issuer/ their R & T agent may at

the time of demat confirmation, ask for additional documentation (like

bank attestation/ notarisation, etc.) to prove that the certificate belongs

to the person who forwarded the DRF.

9. In case there is any problem in processing the DRF, contact your DP

and if he cannot resolve the problem you may contact NSDL.

RELIANCE MUTUAL FUND

The Concept of Mutual Fund

A mutual fund is a common pool of money into which investors place their

contributions that are to be invested in accordance with a stated objective. The

ownership of the fund is thus joint and mutual; the fund belongs to allinvestors

Reliance Mutual Fund

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Reliance Mutual Fund (RMF), a part of the Reliance - Anil Dhirubhai Ambani

Group, is India's leading Mutual Fund, with average Assets Under

Management of Rs. 90,813 crores for the month of June 2008, and an investor

base of over 6.7 million. Reliance Mutual Fund offers investors a wellrounded portfolio of products to meet varying investor requirements. Reliance

Mutual Fund has a presence in 300 cities across the country and constantly

endeavors to launch innovative products and customer service initiatives to

increase value to investors. Reliance Mutual Fund schemes are managed by

Reliance Capital Asset Management Ltd., a wholly owned subsidiary of

Reliance Capital Ltd.

Organization of a Mutual Fund

Here are many entities involved and the diagram below illustrates theorganizational set up of a mutual fund:

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Types of Mutual Funds on the Basis of Risk Vs Returns

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Sector Funds

Risk

Money Market FundsFloaters

Income Funds

Gilt Funds

MIPs

Balanced Funds

Diversified EquityFunds

Retur n

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Frequently used term in Mutual Funds

Net Asset Value (NAV)

Net Asset Value is the market value of the assets of the scheme minus its

liabilities. The per unit NAV is the net asset value of the scheme divided by

the number of units outstanding on the Valuation Date.

Sale PriceIs the price you pay when you invest in a scheme. Also called Offer Price. It

may include a sales load.

Repurchase Price

Is the price at which a close-ended scheme repurchases its units and it may

include a back-end load. This is also called Bid Price

Redemption Price

Is the price at which open-ended schemes repurchase their units and close-

ended schemes redeem their units on maturity. Such prices are NAV related.

Sales Load

Is a charge collected by a scheme when it sells the units. Also called, Front-

end load. Schemes that do not charge a load are called No Load schemes

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Repurchase or Back-end Load

Is a charge collected by a scheme when it buys back the units from the unit

holders.

Types of Reliance Mutual Funds

1. Reliance Growth Fund

2. Reliance Vision Fund

3. Reliance Banking Fund

4. Reliance Diversified Power Sector Fund

5. Reliance Pharma Fund6. Reliance Media & Entertainment Fund

7. Reliance NRI Equity Fund

8. Reliance Equity opportunities Fund

9. Reliance Index Fund

10.Reliance Tax Saver (ELSS) Fund

11.Reliance Equity Fund

12.Reliance Long Term Equity Fund

13.Reliance Regular Saving Fund

The key term in mutual funds

Dividend Policy: Dividend will be distributed from the available distributable

surplus after the deduction of the divided distribution surplus after thededuction of the dividend distribution tax and the applicable surcharge, if any.

The mutual fund is not guaranteeing or assuring any dividend. Pease read the

offer document for details. Further payment of all the dividends shall be in

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compliance with SEBI circular No. SEBI/IMD/CIR No. 1/64057/06 dated

4/4/06.

Applicable NAV : Sale of units by reliance mutual fund: in respect of valid

applications received up to 3 p.m. by the mutual fund alongwith a localcheque or a demand draft payable at par at the place where the application is

received, the closing NAV of the day on which application is received shall be

applicable.

Repurchase including Switch-out: in respect of valid applications received

upto 3 pm by the mutual fund, same days closing NAV shall be applicable. In

respect of valid applications received after 3 p.m. by the mutual fund, the

closing NAV of the next business day shall be applicable.

Daily net Asset Value(NAV) publication: the NAV will be declared on all

working days and will be published in 2 newspaper. NAV can also be viewed

on www.reliancemutualfund.com and www.amfiindia.com .

Tax Benefits to the mutual fund: Reliance Mutual Fund is a Mutual fund

registered with the securities & exchange board of India and hence the entire

income of the mutual fund will be exempt from income tax in accordance with

the provisions of section 10(23D) of the income tax act, 1961. The mutual

fund will receive all income without any deduction of tax at source under the

provisions of section 196(iv) of the act.

An exemption has been granted under the finance (No.2) act, 2004 to open

ended equity oriented mutual funds from paying distribution tax on income

distributed without any time limit, effective from 1 April 2004.

Securities transaction Tax :

Name of Transaction Payable by Rate of Tax

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Purchase and sale of

equity shares or units of

equity oriented mutual

funds on a recognisedstock exchange on

delivery basis

Both purchaser as well

as seller

0.125%

Sale on stock exchange

of equity shares or units

of equity oriented

mutual funds on non-

delivery basis

seller 0.025%

sale of derivatives

reorganized stock

exchange

Seller 0.017%

Sale of units of equity

oriented mutual funds

to the mutual fund

Seller 0.25%

There are two types of investment in Mutual Funds.

Lump Sum

Systematic Investment Plan(SIP)

.

Lump sum : In Lump sum the investment is only one times thatis of Rs. 5,000. and if the investment is monthly then the investment will be

6,000/-.

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Systematic Investment Plan(SIP) :

We have already mentioned about SIPs in brief in the previous pages but now

going into details, we will see how the power of compounding could benefit

us. In such case, every small amounts invested regularly can growsubstantially. SIP gives a clear picture of how an early and regular investment

can help the investor in wealth creation. Due to its unlimited advantages SIP

could be redefined as a methodology of fund investing regularly to benefit

regularly from the stock market volatility. In the later sections we will see how

returns generated from some of the SIPs have outperformed their benchmark.

But before moving on to that lets have a look at some of the top performing

SIPs and their return for 1 year:

Scheme

Amoun

t NAV

NAV

Date

Total

AmountReliance diversified

power sector retail 1000 62.74 30/5/2008 14524.07Reliance regular savings 1000 22.20 30/5/2008 13584.944

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equity 8principal global

opportunities fund 1000 18.86 30/5/2008 14247.728DWS investment

opportunities fund 1000 35.31 30/5/2008 13791.157BOB growth fund 1000 42.14 30/5/2008 13769.152

In the above chart, we can see how if we start investing Rs.1000 per month

then what return well get for the total investment of Rs. 12000. There is

reliance diversified power sector retail giving the maximum returns of Rs.

2524.07 per year which comes to 21% roughly. Next we can see if anybody

would have undertaken the SIP in Principal would have got returns of app.

18%. We can see reliance regular savings equity, DWS investment

opportunities and BOB growth fund giving returns of 13.20%, 14.92%, and

14.74% respectively which is greater than any other monthly investment

options. Thus we can easily make out how SIP is beneficial for us. Its hassle

free, it forces the investors to save and get them into the habit of saving. Also

paying a small amount of Rs. 1000 is easy and convenient for them, thus putting no pressure on their pockets.

Now we will analyze some of the equity fund SIP s of Birla Sunlife with BSE

200 and bank fixed deposits In a tabular format as well as graphical.

Exposure of Mutual Funds Companies in India

The concept of mutual funds in India dates back to the year 1963. The era between 1963 and 1987 marked the existence of only one mutual fund

company in India with Rs. 67bn assets under management (AUM), by the end

of its monopoly era, the Unit Trust of India (UTI). By the end of the 80s

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decade, few other mutual fund companies in India took their position in

mutual fund market.

The new entries of mutual fund companies in India were SBI Mutual Fund,

Canbank Mutual Fund, Punjab National Bank Mutual Fund, Indian Bank Mutual Fund, Bank of India Mutual Fund.

The succeeding decade showed a new horizon in Indian mutual fund industry.

By the end of 1993, the total AUM of the industry was Rs. 470.04 bn. The

private sector funds started penetrating the fund families. In the same year the

first Mutual Fund Regulations came into existence with re-registering all

mutual funds except UTI. The regulations were further given a revised shape

in 1996.

Kothari Pioneer was the first private sector mutual fund company in India

which has now merged with Franklin Templeton. Just after ten years with

private sector players penetration, the total assets rose up to Rs. 1218.05 bn.

Today there are 33 mutual fund companies in India in which some are as

below.

ABN AMRO Mutual Funds

Birla Sun life mutual Funds

Bank of Baroda Mutual Fund

HDFC Mutual Fund

HSBC Mutual Fund

ING Vysya Mutual Fund Prudential ICICI Mutual Fund

Sahara Mutual Fund

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State Bank of India Mutual Fund

Tata Mutual Fund (TMF)

Kotak Mahindra Asset Management Company (KMAMC)

UTI Asset Management Company Private Limited

Reliance Mutual Fund (RMF)

Standard Chartered Mutual Fund

Escorts Mutual Fund

Alliance Capital Mutual Fund

Benchmark Mutual Fund

Canbank Mutual Fund

Chola Mutual Fund

LIC Mutual Fund

GIC Mutual Fund

Working of a Mutual Fund

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Terms and conditions

This facility offered only to the investors having bank accounts in

selected cities which are specific in the form of the SIP. Submit the following document at least 21 working days before the first

SIP date for ECS( Electronic clearing Service).

The first SIP cheque should be issued from the same bank account

which is to be debited under ECS for subsequent installments.

The bank account provided for ECS(Debit) should participate in local

MICR clearing. SIP auto debit facility is available only on specific dates of the month

i.e. 2 nd or 10 th or 18 th or 28 th .

The investor agrees to abide by the terms and conditions of ECS facility

of Reserve bank of India.

An investor can opt for monthly or quarterly frequency.

Only one SIP per month or per quarter is permitted per folio/account. Minimum investment amount monthly SIP option 60 installments of

Rs. 100/- each or 12 installment or Rs. 500/- each or 6 installments of

Rs. 1000/- each and in multiples of Re.1/- thereafter. The gap between the 1 st cheque/ installment & the 2 nd cheque /

installment should be at least 21working days. However subsequent

cheques should have a gap of at least a month or a quarter depending

upon the frequency chosen.

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Advantages of Mutual Funds

Diversification: The best mutual funds design their portfolios so

individual investments will react differently to the same economic

conditions. For example, economic conditions like a rise in interest rates

may cause certain securities in a diversified portfolio to decrease in

value. Other securities in the portfolio will respond to the same

economic conditions by increasing in value. When a portfolio is

balanced in this way, the value of the overall portfolio should gradually

increase over time, even if some securities lose value.

Professional Management: Most mutual funds pay topflight

professionals to manage their investments. These managers decide what

securities the fund will buy and sell.

Regulatory oversight: Mutual funds are subject to many governmentregulations that protect investors from fraud.

Liquidity: It's easy to get your money out of a mutual fund. Write a

check, make a call, and you've got the cash.

Convenience: You can usually buy mutual fund shares by mail, phone,

or over the Internet.

Low cost: Mutual fund expenses are often no more than 1.5 percent of

your investment. Expenses for Index Funds are less than that, because

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index funds are not actively managed. Instead, they automatically buy

stock in companies that are listed on a specific index

Transparency

Flexibility

Choice of schemes

Tax benefits

Well regulated

Drawbacks of Mutual Funds

Mutual funds have their drawbacks and may not be for everyone:

No Guarantees: No investment is risk free. If the entire stock market

declines in value, the value of mutual fund shares will go down as well,

no matter how balanced the portfolio. Investors encounter fewer risks

when they invest in mutual funds than when they buy and sell stocks on

their own. However, anyone who invests through a mutual fund runs the

risk of losing money.

Fees and commissions: All funds charge administrative fees to cover

their day-to-day expenses. Some funds also charge sales commissions

or "loads" to compensate brokers, financial consultants, or financial

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planners. Even if you don't use a broker or other financial adviser, you

will pay a sales commission if you buy shares in a Load Fund.

Taxes: During a typical year, most actively managed mutual funds sell

anywhere from 20 to 70 percent of the securities in their portfolios. If

your fund makes a profit on its sales, you will pay taxes on the income

you receive, even if you reinvest the money you made.

Management risk : When you invest in a mutual fund, you depend on

the fund's manager to make the right decisions regarding the fund's

portfolio. If the manager does not perform as well as you had hoped,

you might not make as much money on your investment as you

expected. Of course, if you invest in Index Funds, you forego

management risk, because these funds do not employ managers

How You Can Invest in a Mutual Fund?

There are two ways in which you can invest in a mutual fund.

1. One-Time Outright Payment

If you invest directly in the fund, you just hand over the cheques and you

get your fund units depending on the value of the units on that particular day.

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Lets say you want to invest Rs 10,000. All you have to do is approach the

fund and buy units worth Rs 10,000. There will be two factors determining

how many units you get.

Entry load

This is the fee you pay on the amount you invest. Lets say the entry load is

2.25%. Two percent on Rs 10,000* would Rs 225. Now, you have just Rs

9,775 to invest.

NAV

The Net Asset Value is the price of a unit of a fund. Lets say that the NAV

on the day you invest is Rs 30. So you will get 326.67 units (Rs 9800 / 30).

2. Periodic Investments

This is referred to as a SIP ( Systematic Investment Plan ).

That means that, every month, you commit to investing, say, Rs 1,000 in

your fund. At the end of a year, you would have invested Rs 12,000 in your

fund.

Lets say the NAV on the day you invest in the first month is Rs 20; you

will get 50 units.

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The next month, the NAV is Rs 25. You will get 40 units.

The following month, the NAV is Rs 18. You will get 55.56 units.

So, after three months, you would have 145.56 units. On an average, youwould have paid around Rs 21 per unit. This is because, when the NAV is

high, you get fewer units per Rs 1,000. When the NAV falls, you get more

units per Rs 1,000.

1. Is there a load?

An exit load is a fee you pay the fund when you sell the units, just like the

entry load is a fee you pay when you buy the units. Initially, funds never

charged an entry load on SIPs. Now, however, a number of them do.

You will also have the check if there is an exit load. Generally, though,

there is none. Also, if there is an entry load, an exit load will not be

charged.

An exit load may be charged if you stop the SIP mid-way. Lets say youhave a one-year SIP but discontinue after five months, then an exit load will

be levied. These conditions will wary between mutual funds.

2. What is the Minimum Investment?

If you do a one time investment, the minimum amount that you have to

invest is Rs 5,000.

If you invest via an SIP, the amount drops. Each fund has its own minimum

amount. Some may keep it at least Rs 500 per month; others may keep it as

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Rs 1,000. [ Only in Reliance mutual funds, you can invest as little as Rs.

100/- per month .]

3. How often does one have to invest?

It would depend on the fund.

Some insist the SIP must be done every month. Others give you the option

of investing once in three months or once in six months.

They also give fixed dates. So you will get the option of various dates and

you will have to choose one. Lets say you are presented with these dates: 1,10, 20 or 30. You can pick any one date.

If you pick the 10th of the month, then on that day, the amount you have

decided to invest in the fund has to be credited to your mutual fund.

4. How must the payment be made?

You can opt for the Electronic Clearance Service from your bank; this

means the mutual fund will, as per your instructions, debit a certain amount

from your account every month.

Lets say you have a SIP of Rs 1,000 every month and you have chosen to

invest in it on the 10th of every month. Under this option, you can instruct

your mutual fund to directly debit your bank account of Rs 1,000 on the due

date.

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If you dont have the required money in your account, then for that month,

no units will be allocated to you. But, if this continues periodically, the

mutual fund will discontinue the SIP. You need to check with each mutual

fund what their parameters are.

Alternately, you can give cheques to your mutual fund. In this case, they

may ask for five Post Dated Cheques upfront with your first investment.

Since these cheques are dated ahead of time, they cannot be processed till

the date indicated.

5. Must I state for how long I want the SIP?

Yes. You will have to state whether you want it for a year or two years, etc.

If, during the course of this period, you realize you cannot continue with the

SIP, all you have to do is inform the fund 15 days prior to the payout.

The SIP will be discontinued. You can continue to keep your money with

the fund and withdraw it when you want.

6. Do all funds offer SIP?

No. Liquid funds, cash funds and floating rate debt funds do not offer an

SIP. These are funds that invest in very short-term fixed-return investments.

Floating rate debt funds invest in fixed return investments where the interest

rate moves in tandem with interest rates in the economy (just like a floatingrate home loan).

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All types of equity funds (funds that invest in the shares of companies), debt

funds (funds that invest in fixed-return investments) and balanced funds

(funds that invest in both) offer a SIP.

7. Tax implications

Lets say you have invested in the SIP option of a diversified equity fund.

If you sell the units after a year of buying, you pay no capital gains tax. If

you sell if before a year, you pay capital gains tax of 15%.

Lets say you invest through a SIP for 12 months: January to December 2007. Now, in March 2008, you want to sell some units.

Will you be charged capital gains tax?

The system of first-in, first-out applies here. So, the amount you invest in

January 2007 and the units you bought with that money will be regarded as

the units you sell in March 2008.

For tax purposes, the units that you sell first will be considered as the first

units bought.

8. How will an SIP help?

When you buy the units of a fund, you may do so when the NAV is really

high. For instance, lets say you bought the units of a fund when the Bull

Run was at its peak, leading to a high NAV.

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If the market dips after that, the value of your investments falls and you

may have to wait for a long while to make a return on your investment. But,

if you invest via a SIP, you do not commit the error of buying units when

the market is at its peak. Since you are buying small amounts continuously,your investment will average out over a period of time.

You will end up buying some units at a high cost and some units a lower

price. Over time, your chances of making a profit are much higher when

compared to an one-time investment.

SHARE TRADING

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Points To Consider Before Investing

Its always risky to invest your money in one stock. The confidence in a

stock may be effective but the overconfidence can be hazardous. The stocks

and stock markets have very irregular nature. It is very hard to analyze thefuture conviction of a stock. The unpredictable things may occur, which

may have shocking effects on the investors.

The investors should always track few lucrative stocks before investing.

The investors are always advised to interpret the stocks and stock market

correctly, study the past as well as present movements of the stocks, and

adopt the flexible policies that may deal with the changing market trends.

It is very difficult to predict the future of the stock market, but the investors

outline brief plan about how the market may perform in the coming future

on the basis of market trends. The stock markets are highly volatile and

erratic in nature. The investors should follow the active market trends and

manage their stocks in such a way so that they must earn some gain.

If you are a day trader, you should make proper selection of the stock and

when the suitable time comes, sell it. Dont wait for further increase;

otherwise you may lose your money. In case of long-term investing, you

should pick the stocks that have some demand and when the price reaches

to its highest peak, covering your costs plus profits, then its better to sell it.

You must take help from an expert and follow proper instructions to make

bigger profits.

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Stock Market Story

Stock exchange provides an opportunity to investors to invest money in the

securities of their choice. It is a structured securities market that offers

sufficient marketability and price stability for shares so essential for the

requirements of investors. It (stock market) is considered as a symbol of the

growth of an economy.

Stock market offers a balanced measure of security and integrity in the sale

and purchase of different securities. Through the interchange of demand for

the supply of securities, a well-structured securities market helps in accuratevaluation of stocks. The stock exchange assists in the systematic flow of

distribution of savings as between various kinds of aggressive investments.

The stock exchange is considered as an organization of huge

significance in every country. Industrial development and expansion hinge

upon capital formation, that is, money being invested in various securities.

This becomes achievable on a large scale due to subsistence of stock

exchanges. Those who are interested in investing their funds are usually

fascinated towards securities issued by various companies.

The prices of particular securities traded at the stock exchanges reflect their

relative demand and supply. The prices of securities also indicate the

financial health of individual companies. This serves as a guide to the

investors to invest in sound securities.

The security price index schedule provides a reasonable indication of the

state of the economy, industry and business. Thats why the stock exchange

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is known as the barometer of the economy. Just like, the barometer depicts

the changes in atmospheric pressure; stock market quotes give an idea about

the economic progress of a country.

Swing Stock Trading

Swing stock trading is a short-term trading technique in which stocks are

held only for shorter periods such as two to four days or weeks. Normally,

the newcomers adopt this style and it depends on the weekly or monthly

variations in stock prices.

Swing trading provides higher returns as compared to day trading.However, swing traders have to suffer overnight risk, which could have

adverse affect on stock price. Swing traders suffer less challenge from big

traders.

During the upward trend, a swing trader observes a particular stock for a

couple of days. If there is a downfall in the market, the trader shifts to

another emerging stock. Swing trading is most productive, when the

markets are performing firmly.

A swing trader appraises the temporary impulsion and pricing strategies of

the stock, rather than its basic value. Swing stock trading carries lesser

risks. A swing stock trader takes advantage from the expected steady

market instabilities.

When there is substantial price variation in the market, the swing trader

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sells the stock without waiting. Swing stock trading provides quick results,

but the important thing is to choose the right market and the right stocks.

Swing trading ignores rapid increase or decrease in stock prices and the

prices tend to go in straight direction without fluctuating. Swing trading is best for part-time traders, while day traders have to watch each and every

movement in quotes and they have to stick to their computers for many

hours. Swing trading doesn't require that type of focus and dedication.

In brief a swing traders aim is to generate money by captivating the

immediate changes that stocks attain in their lifetime, and at the same time

manipulating their risk by following suitable money management practices.

Day Trading

Numerous people have wrong perception that short term trading strategy is

chancy and long term trading strategy is secure. But this is wrong, both

short term trading and long term trading can be effectual trading strategies.

Stock market is a place where investors can earn lots of money in the short

time as well as in the long run. The return on investments mainly depends

on the time durations for which the investments are made. There are various

types of trading styles that investors may opt to make profits from the stock

market. In this article we talk about day trading.

Under day trading method, the stocks are held only for short periods - for

few hours or minutes or seconds. The day trading offers various

opportunities to make big profits daily. The trading process for the day

trading comprises exciting strategies, which assist the investor to make

good profits.

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Day traders buy and sell stocks during the whole day, hoping that the price

of the stocks will rise and let them to make quick gains. A day trader will

sell all stocks before closing of stock market. The purpose of day trading is

to speedily get in and out of any stock for a return anywhere from a fewcents to several points per share on an intra-day basis.

The day trading helps investors to control the fear of overnight risk. If the

investors have ideal plans to choose the investment opportunities from the

stock market, the day trading is the best option idea to make quick money.

Online Stock Investing BenefitsOnline stock investing is an emerging technique to trade stock but when

practiced by the average person can be a complete waste of money and

time. The average person needs to be acquainted with the ups and downs of

stock trading in order that they can stop losing money when they buy and

sell stock.

In reality, when you purchase stock, you are becoming a shareholder in that

company. The company will then take the money you used up to obtain that

share to amplify the company and make more money. When the business

makes more money the stock price will grow up. You can then sell the

stock to make more money than you invested, or if the company loses

money from when you purchased the stock you suffer a loss.

If you are interested in entering the online stock-investing world, you

should go online and make an account thru an online brokerage company.

After setting up your online account, you can begin to trade stock. It is also

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very important that you have some knowledge about stock trading. Here are

some benefits of online stock investing:

When trading stock online the broker's commissions are less. The

Brokerage charges are Rs. 12 per transaction and not depending on the

amount of money in the Reliance Money

Online trading is advantageous as the company lets the investor to chart

the lucrative stocks and also updates the investor with the most recent

updates and news on the stock market.

One of the best parts about online stock trading stock is its easiness to

access your account, get detailed information about the company and stock

you invested in, etc.

You have total freedom to buy and sell stock in your own way and at

your own time. Basically online investing is the best way to invest money

with complete freedom.

If you want help while trading online you are capable of making contact

with other trained brokers and investment counselors and ask questions to

them.

When you trade stock at your home, you save lots of money and time.

Investing In the Stock Market

Online stock trading is a new technique of buying and selling stocks, which

has created a boom in the stock market industry. It has made all people to

have the benefit of stock trading by using their own PC. Now you can buy

and sell any stock over the Internet and it doesnt take much to begin. Thru

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online facility, you can have a proper check over the market situation from

any corner of the world.

In todays hasty and hard life, nobody has time to personally visit the stock

brokers or companies to collect information or to invest in their schemes.

So, the invention of internet has proved to be the most excellent tool in the

stock trading that has given rise to trade stock online from the comfy

atmosphere of your home or office. Here are few points that you have to

consider while getting involved into it:

- You should make proper research for a well-known and trustworthy

company before putting your hands in stock market as there are several

Internet sites that deal in the buying and selling business of stocks. You

should get through the evaluations and testimonials of different investors

those who are already dealing with them and you can also visit bulletin

boards to grab information about other companies.

- There are several Internet sites that are linked to the buying and selling of

stock to foreign markets while some are related to the overseas as well as

domestic markets. You should decide earlier with which company you want

to start trade so that you should not mix up the things.

- You should always go for the sites that are completely secured as your

financial plus personal information has to be inserted over the site to start

the stock trading online. If the security of the site is less than your level of

satisfaction then need not to step in as there might be the chances that your

loaded data can be abused in future.

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- First investigate about the payment or other charges charged by different

sites. You should always choose the site charging less fees per trade, thus,

you should take the benefit of online trading that cannot be enjoyed intrading stock in a traditional manner. Online investment sites provide 24 x 7

hours assistance so that if you need any help, they should always be present

to support you.

Online Stock Trading Is Very Opportunistic

Stock market is a place where investors can make continuous profits byinvesting their funds in different segments. Stock trading has turned into big

business, now-a-days. It offers several choices to investors, which include

breakeven (BE) systems, online stock trading, futures trading and chances

to make bigger gains. Each stock investment is based on three vital

constituents i.e. capital, outlook and technique.

There are numerous investors that buy or sell shares on a daily basis.

The online facility has made stock trading an easier and simpler process.

The online stock trading (buying and selling of stocks) thru Internet has

attained much important all through the world. Because of its advantages, it

had attracted more and more users.

Online stock trading lets investors to buy or sell shares automatically. It is a

resourceful and suitable method to scrutinize the stock market and make

investments in the lucrative sections. But, it is vital that investors should

have proper knowledge about stock market basics, otherwise it will create

problems in future.

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The online stock trading has offered an opportunity to investors to

branch out their temporary plus permanent investment plans, and to make

investment in stock markets all thru the world. The other benefit of onlinetrading is that investors need to pay less brokerage charges. It also helps

investors to take immediate action, without any delay. The number of

online companies also provides the services like stock trading, automatic

investment and even reinvestment of dividends with info to buy or sell once

the price reaches a higher level.

In order to make better returns on investments, investors can hire a stock

broker. Investors can also take help from a trading professional or a trading

institute that will offer advantageous opportunities for their investment bag.

Points to Remember for a Newcomer in Stock Market

We all are interested in investing money in the stock market, which

provides opportunities to increase our wealth within short periods. Stock

exchanges encourage investments and provide a permanent market for

securities. Various types of securities are traded there. Therefore it is an

easy way for investors to utilize their available cash instead of blocking.

If there is an upward trend in the stock market, then you can easily reap

gains in much lesser time, but if there is downfall, you need to wait for

some profitable time. Stock market fixes no limits on investors; they can

easily make their profits and raise their profitability accordingly.

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But, it is necessary that you must know the basic rules and conditions of the

stock market. The trading in a stock exchange is done under strict rules and

in a very orderly manner. Stock market conditions assist you to earn higher

gains with your limited incomes. If you are a newcomer, then you have togain some knowledge about this opportunistic market. Stock market carries

higher degree of risk for all. Whether you are a day trader, swing trader or

long-term holder, you need to follow some rules.

Stock exchanges are well-organized markets that publish the quote list of

the securities traded on daily basis. The investor gets the latest prices of

their securities, which are prepared by the experts. Stock exchange acts as a

middleman between the seller and buyer of securities. Therefore, it helps in

mobilization of funds for the companies.

Is trading through the Internet safe?

The safety of transactions on the Internet depends on the encryption system

used. The better this transaction system, the more difficult it is for any

person to hack the site.

Internationally, the best system available today is the 128-bit encryption, a

system, which evens the Pentagon uses. ICICIdirect.com is one of the few

online share-trading sites in the country equipped with this 128-bit

encryption.

Secondly, you too can ensure the safety of the transactions online. You

normally get a secured user id and password, the secrecy of which is to be

maintained entirely by you.

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Thirdly, if the transaction system requires no manual intervention, you

further improve the safety in the transactions. Among Indian sites,

ICICIdirect.com is one of the very few fully integrated online trading sites.This enables the elimination of the possibility of any manual intervention.

Which means orders are directly sent to the exchange ensuring that you get

the best and right price?

What about security of my money demat shares and my transaction

documents?

In systems where the broking, banking and demat accounts are completely

integrated, your money remains in your own bank account, and does not get

transferred to the broker's pool account.

Is trading through the Internet a difficult and cumbersome

process?

The experience of trading through Internet depends a great deal on the type

of product offered by the site. Say, for example, one of the issues bothering

you may be tired of the paperwork involved after every trade in writing

cheques or TIFDs.

You would then seek a system that eliminates these processes. In onlinetrading sites, the greater the back-end integration of the system, the greater

the amount of work the sites do for you, therefore greater the convenience

available to you.For example, incase of ICICIdirect.com, your broking

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account, bank account and demat account are linked electronically. So when

you punch in a buy or sell order, the system checks the funds/ shares

availability and automatically credits/debits the accounts once the order is

executed by the exchange.

But I am not comfortable with Internet, or with finance, how

can online trading be easy for me?

Contrary to common perceptions, trading through Internet does not require

either any expertise in working on the computer, or any special financial

skills.

You could try the demo (demonstration) of the online trading sites like

ICICIdirect.com to find out why others like you, with little or no knowledge

about the Internet or finance, have switched on to online trading. Or you

could attend the demonstrations sessions held by such websites in your city.

How frequently is the price updated at all these online trading

sites?

The tickers available at online trading sites provide instantaneous updates.Also, some websites can offer to transact in those shares instantaneously

and with convenience.

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How can I be sure that I shall be trading at a price I want to

or at a price appearing in the website?

The solution to your problem could be provided in different ways by

different online share trading sites. At Reliance Money, for any trade order,

the customer is asked to click "Proceed" after he has the opportunity to

completely check the order verification form.

Moreover, you have the option of modifying or canceling the order till the

moment the order is executed at the exchange.

Finally, online trade confirmations reach reaches our customers within 4minutes, while contract notes are dispatched at the end of the day and reach

within 12-24 hours.

With Reliance Money, you decide what you want to buy and buy the share

at the price you want to and therefore you are in total control of your trades.

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CHAPTER -3

DESIGN OF STUDY

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THE STUDY

MARKET ANALYSIS

Markets

In tune with the global stock markets that began to recover from the second

half of 2003; Indian stock markets too witnessed rapid growth. Indias two

leading indices, the most popular BSE Sensex, and the one most used by the

markets the National Stock Exchanges S&P CNX Nifty rose to record levels.

Both primary and secondary market activity experienced sharp surge. Much

progress was made in further strengthening and streamlining risk

management, market regulation and supervision. A few aspects of the major

developments in the Indias stock markets are described below. And the

insurance sector is also play an important role in the growth of the financial

market.

Market Structure

Indian securities market is fairly large as compared to several other emerging

markets. There are 22 stock exchanges in the country, though the entireliquidity is shared between the countrys two national level exchanges

namely, the National Stock Exchange of India and the Bombay Stock

Exchange Ltd. The regional stock exchanges are in pursuit of business models

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that make them viable and vibrant. Meanwhile, these exchanges have become

members of the national level exchanges through formation of subsidiaries

whose business is showing continuous growth and progress.

The number of brokers in various stock exchanges rose from 6,711 in 1994-

95 to 9,335 in FY06. The number of brokers in all the exchanges together

peaked to 10,213 in the year FY01 but gradually declined thereafter when the

regional stock exchanges began to lose business in the light of wide ranging

market structure reforms introduced since then. In FY01, when the markets

were in upswing, several regional stock exchanges were generating business

owing to the availability of deferral products, such Badla and different

settlement calendars prevailing at that time in these exchanges. For instance

in FY01, the Delhi Stock Exchange registered cash market turnover of Rs

838.71 bn; Uttar Pradesh Stock Exchange, Rs 247.47 bn, Ludhiana Stock

Exchange Rs 97.32 bn, Pune Stock Exchange Rs 61.71 bn as against Rs

13,395.11 bn of the turnover at the National Stock Exchange and Rs

10,000.32 bn turnover at the Bombay Stock Exchange. With the abolition of the deferral products and introduction of uniform T+2 settlement cycle, the

liquidity in these exchanges flowed to the national level system consisting of

NSE and BSE.

Major Player in the Insurance Sector

There are many reputed companies in the market which provide the Insurancefor living being and non living beings.

The companies in life Insurance are as follows.

Life Insurer in Public Sector

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Life Insurance Corporation of India

Life Insurer in Private Sector

Reliance life Insurance Company Limited

ICICI Prudential Life Insurance

Bajaj Allianz Life Insurance

Tata AIG Life Insurance corporation Limited

HDFC Standard Life Insurance

Birla Sun Life Insurance

SBI Life Insurance

Kotac Mahindra old Mutual Life Insurance

Aviva Life Insurance

MetLife India Life Insurance

ING Vysya Life Insurance

Max New York Life Insurance

Shriram Life Insurance

Bharti AXA Life Insurance Co. Limited

IDBI Forties Life Insurance Co. Limited

Argon Religare Life Insurance Co. Limited

Major Broking house

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During the analysis of the market it has been found that there are a lot of the

brokeing house in the market which are providing the online trading facility to

the individuals or the group of the individuals.

5paisa.com

You can now buy and sell shares on 5paisa.com with speeds comparable and

at times better than NSE's NEAT Terminal. This speed and reliability comes

only with perseverance of pioneer backed by huge investment in technology!

You can now buy and sell shares on 5paisa.com with speeds comparable and

at times better than NSE's NEAT Terminal. This speed and reliability comes

only with perseverance of pioneer backed by huge investment in technology. Advani Share Brokers

Advani Share Broker, a reputed Bombay based on investment house, operates

from India's financial hub, Dalal Street, since sixty years. It deals in equities,

debt and derivatives on the Bombay Stock Exchange and the National Stock

Exchange of India.

AGROY Group of Companies

Agroy group of companies is a well established name in the field of capital

markets and financial services. AGROY Finance & Investment Ltd. (AFIL) is

the group's flagship company engaged in capital markets as a premier

financial and stock broking house. The company was formed in July 1992.

Since then it has enjoyed patronage of a large number of valued customers and

business partners.

Anand Rathi Securities Limited

Anand Rathi Securities Limited provides financial and advisory services

including wealth management, investment banking, corporate advisory,

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brokerage & distribution of equities, commodities, mutual funds and insurance

- all of which are supported by powerful research teams.

India bulls

India bulls is India's leading retail financial services company with 70locations spread across 62 cities. While our size and strong balance sheet

allow us to provide you with varied products and services at very attractive

prices, our over 450 Client Relationship Managers are dedicated to serving

your unique needs.

Religare Securities Ltd.

Religare Enterprises Limited (A Ranbaxy Promoter Group Company) through

Religare Securities Limited, Religare Finvest Limited, Religare Commodities

Limited and Religare Insurance Advisory Services Limited provides

integrated financial solutions to its corporate, retail and wealth management

clients. Provides various financial services which include Investment Banking,

Corporate Finance, Portfolio Management Services, Equity & Commodity

Broking, Insurance and Mutual Funds.

Jaypee Capital Services Ltd.

Jaypee Capital Services Ltd. is a registered self-clearing member with

National Stock Exchange and SEBI. It has the expertise and the experience to

capitalize on daily stock movements and employ over 20 specialist traders

certified by the NSE.

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ICICI Direct

Online share and mutual funds trading facility by the ICICI group.

Arcade Share & Stock Brokers

Arcadia group began its modest journey in 1995 and now Arcadia proudly

boasts about membership to NSE,BSE, Depository Participant

(CDSL),MCX,NCDEX .The philosophy of client servicing backed by all

principal Indian Stock and Commodity exchange gives Arcadia edge over

other players in the industry segment to offer value based services to its

customers.

Indianstockmarket.net Indianstockmarket.net is an effort to educate Indian investor by providing

useful stock news, stock market websites, informative articles, resources to

various investment guides.

Major Developments in equity brokerage industry in India

Corporate memberships

Wider product offerings

Greater reliance on research

Accessing equity capital markets

Foreign collaborations and joint ventures

Specialized services/niche broking Online broking

Emerging challenges and outlook for the brokerage industry

Fragmentation

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Global Opportunities

Competition from foreign firms

Investor Protection

LEGAL AND REGULATORY ENVIRONMENT

SEBI - The capital markets regulators also regulates the mutual funds in

India. SEBI requires all mutual funds to be registered with them. SEBI

issues guidelines for all mutual funds operations - investment, accounts,

expenses etc.

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RBI- as supervisor of banks owned mutual funds - As banks in India

came under the regulatory jurisdiction of RBI, bank owned funds to be

under supervision of RBI and SEBI.

RBI as supervisor of Money Market Mutual Funds - RBI has

supervisory responsibility over all entities that operate in the money

markets. Hence in the past Money Market Mutual Funds scheme of Mutual

funds had to be abide by policies laid down by RBI. Recently, it has been

decided that Money Market Mutual Funds of registered mutual funds

will be regulated by SEBI through SEBI (Mutual Fund) Regulations

1996.

Ministry of Finance - (MoF) ultimately supervises both the RBI & the

SEBI and plays the role of apex authority for any major disputes over SEBI

guidelines.

Company Law Board - Dept of Company Affairs - Registrar of

companies

AMCs of Mutual funds are companies registered under the companies Act

1956 and therefore answerable to regulatory authorities empowered by the

Companies Act.

Stock ExchangesStock Exchanges are self-regulatory organizations supervised by SEBI.

Many of closed ended funds of AMCs are listed as stock exchanges and are

traded like shares

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Office of the Public Trustee

Mutual funds being public trust are governed by the Indian Trust Act 1882.

The Board of trustees or the Trustee Company is accountable to the officeof the public trustee, which in turn reports to the Charity commissioner

Unit Trust of India

Unit Trust of India formed under UTI Act 1963.The Management of the

Trust is under a Board of trustees, which has names of RBI, IDBI, LIC, and

SBI with the chairman appointed by the Government of India in

consultation with the IDBI.

Self-Regulatory organizations

A Self Regulatory organization (SRO) is an association representing a

group of market participants, which is empowered by the apex regulatory

authority to exercise pre-defined authority over regulation of their members.

For example stock exchanges.

However everybody representing a group of market participants does not

automatically become a SRO.

Association of Mutual funds of India (AMFI)AMFI is not a SRO . It has been formed in 1995 with the objective of

representing the Mutual fund industry collectively with a view

- To promote the interests of Mutual Funds and Unit holders.

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- To set ethical, commercial and professional standards in the industry.

- To increase public awareness of Mutual funds in the country

OBJECTIVE OF STUDY

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The main objective of training is to aware students about new market

concept & industrial environment in which they have to work after the

completion of their course

It is not possible for students to master everything in this short span of time. But it does help the students in knowing about what is happening in

the market & new technologies & trends that are prevalent in the market.

My objective during the summer training was to learn about all the

products. The company provides the knowledge about the online share

trading, DMAT A/C, mutual fund and Life Insurance. It gave the basic

knowledge as well as the concept behind these. I also learned about how to

deliver the products in front of the customers. It was a good learning that

how to interact with the different kind of customer in the market.

Therefore I have selected a topic for the project which is related to

customer perspective about share trading and mutual fund with reference to

Reliance Money.

DATA COLLECTION SOURCE

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Research is totally based on primary data. Secondary data can be used only

for the reference. Research has been done by primary data collection, and

primary data has been collected by interacting with various people. The

secondary data has been collected through various journals and websites

and some special publications of R-MONEY.

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DATA COLLECTION METHOD

DATA COLLECTION:

Proceeding further after determines the Methodology and limitation of the

study the next step is to analyze the Data being collected for the study. Data is

being collected from various sources like:-

Questionnaire

Personal visit

Telephonic Information etc.

VI.I QUESTIONAIRE:-

Questionnaire is a written form being given to the prospective investor

to give feedback about the services provided to them and also to find

the satisfaction level of the investor for a particular investment

product .Questionnaire is an easy and simple way of collecting a data

.After filling up of form the next step is to evaluate the form in different

dimensions and draw a conclusion.

It is difficult to get a Questionnaire filled by corporate because of time

they dont have time to fill the Questionnaire so at the time of meeting

them personally or after that the Questionnaire is filled by us.

The Sample size taken for this study is 100 which is not enough to draw

a conclusion but due to time limitation only this much size has beentaken into consideration. After analyzing the Questionnaire the

following evaluation has been done:-

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CATEGORY OFINVESTORS

TOTALINCOME

RISK RETURN

IT PEOPLE HIGH LOW HIGHDOCTORS HIGH LOW HIGHTIMBER MERCHANTS HIGH HIGH HIGHJEWELLERS HIGH HIGH HIGHREAL ESTATE AGENTS HIGH HIGH HIGH

After analyzing the above table the conclusion was made that the business

people are more Risk taker while professional people are less Risk taker

where the return expected in both the case are high.

VI.II PERSONAL VISIT:-

The second way of collecting data is Personal Visits to the cooporates

personally by fixing an appointment. Personal Visit gives a clear picture of

the conclusion drawn in Questionnaire It gives a clear view of the client

Awareness about the product .Some of the difficulties in making Personal

Visits are:-

To take a time or appointment from the cooperates.

To convenes investor to invest in a particular product.

Personal Visit gives a clear picture about the Investment areas of both thecategories

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PROFESSIONAL PEOPLE BUSINESS PEOPLE

PPF LANDKISAN VIKAS PATR GOLDBANK ACCOUNT STOCKSINSURANCE INSURANCEFURTHER STUDIES etc. VEHICLES etc.From the above table it is clear that the Professional people invest in the

Value Added items where as Business people they invest in Future

Prospect assets like land, gold etc.

VI.III TELEPHONIC INFORMATION:-The further source of collecting data is telephonic information with the

existing customer and the prospective investors. It is very difficult to reveal

the data of investors from the company itself because it has been kept as a

secret document. After getting a data some problems too come in the way.

Some are:-

People are not ready to listen.

People ask question like from where did you get the number?

From this source not much of the Information is drawn.

Few respondents where not happy with the level of customer

services endured by

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SCOPE OF STUDY

The research was carried out in Bareilly city only. I have visited people

randomly nearby my locality, different shopping malls, small retailers etc .

Data sources:

Research is totally based on primary data. Secondary data can be used only

for the

reference. Research has been done by primary data collection, and primary

data has been collected by interacting with various people. The secondary

data has been collected through various journals and websites and some

special publications of R-MONEY.

Sampling:

Sampling procedure:

The sample is selected in a random way, irrespective of them being investor

or not or availing the services or not. It was collected through mails and

personal visits to the known persons, by formal and informal talks and

through filling up the questionnaire prepared.

Sample size:

The sample size of my project is limited to 100 only.

Sample design:

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Data has been presented with the help of pie charts.

.

CHAPTER-4

ANALYSIS OF DATA

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1. Preference of Investment

This shows that although the mutual funds market is on the rise yet, the

most favored investment continues to be in the Share Market. So, with a

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Fig.1 Result of Preference of Investment


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more transparent system, investment in the Stock Market can definitely be

increased.

2. Awareness of Online Share Trading

With the increase in cyber education, the awareness towards online share

trading has increased by leaps and bounds. This awareness is expected to

increase further with the increase in Internet education.

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Fig. 2 Result of Awareness of Online Share Trading


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3. Preference of investing in stock market

45%

20%

35%

High returns and high risk Tax Benefits Short term gain from investment

The study shows that most of the people prefer to invest in stock market

because of high risk and high return whereas some other try to capture the

short term gain from investment. But a very few section of people invest

because of the benefits they gain in tax.

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4. Awareness of Reliance Money as a Brand

This pie-chart shows that reliance money has a reasonable amount of Brand

awareness in terms of a premier Retail stock broking company. This brand

image should be further leveraged by the company to increase its market

share over its competitors.

5. Awareness of Reliance Money Facilities

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Fig.4 Result of Awareness of Reliance money as a

Brand


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Although there is sufficiently high brand equity among the target audience

yet, it is to be noted that the customers are not aware of the facilities

provided by the company meaning thereby, that, the company should

concentrate more towards promotional tools and increase its focus on

product awareness rather than brand awareness.

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Fig .5 Result of Awareness of Reliance money

Facilities


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6. Customers having Demat account in companies

33%

21%14%

23%

9%

Reliance India bulls Kotak Mahindra ICICI Direct others

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7. Frequency of Trading

Inspite of the huge returns that the share market promises, we see that there

is still a dearth of active traders and investors. This is because of the non

transparent structure of the Indian share market and the skepticism of the

target audience that is generated by the volatility of the stock market. It

requires efficient bureaucratic interventio