A
Project Study Report
On
Training Undertaken at
KARVY STOCK BROKING LTD.
“A Comparative Study between services provided to Karvy
Franchisees and other Franchisees”
Submitted in Partial Fulfilment for the
Award of Degree of
Master of Business Administration
Submitted By: Submitted To:
Vijaya Mishra The Director
MBA 3rd Sem. JECRC Business School
Preface
In the present scenario, any study will not be completed without knowing practical concepts in
marketplace. The studies with a practical view are a gold coin. The MBA curriculum has been
designed to provide practical exposure to the future manager. The project study is necessary for
the fulfilment of MBA curriculum, it provide an opportunity to the researcher to understand
industry with special emphasis on the development of skills in analysis, interpretation of
practical problem through application of management.
Myself as a student of MBA is very fortunate to have done my report on professionally
advanced topic ‘A comparative study between services provided to Karvy Franchisees
and other Franchisees.
The main objective of this project report is to upgrade oneself from theoretical concepts to
practical environment. No doubt every situation is unique but a set of theoretical tool of
knowledge, itself based on empirical foundation, can help in developing the mechanism for
handling such situation. Another objective is to learn how business expands through
franchisees and how are they served.
The project is an act of increasing one’s knowledge and skills so that he/she can perform
his/her job in a better manner. In my context, this project work has helped us not only in
preparing my project but also in understanding the organisational aspect in a detailed manner.
This project work is indeed a life time experience to me.
Acknowledgement
I express my sincere thanks to my project guide, Mr Yugdeep Singh, Manager, Karvy Fortune
for guiding me right from the inception till the successful completion of the project. I sincerely
acknowledge him for extending his valuable guidance, support for literature, critical reviews of
project and the report and above all the moral support he had provided to me with all stages of
this project.
Besides him I would also like to express my thanks to all my faculty members who always
guided me towards the completion of project and made it a successful one.
Vijaya Mishra
Executive Summary
The main objective of this project is to understand how business can grow by providing its
franchisee. This helps organisation to save its costs which would be otherwise incurred on
setting another branch. Franchising is an arrangement whereby a franchiser grants franchisee,
the right to sell products in exchange for some type of consideration.
Franchising offers several benefits to both franchiser and franchisee. It enables a franchisee to
start its business with limited capital and use the business experience of others. If a business
problem arises, the franchisee can obtain guidance or advice from the franchiser at a little or no
cost. Franchised outlets are generally more successful than independently owned business
units.
The franchiser gains fast and selective product distribution through franchise arrangements
without incurring the high cost of constructing and operating its outlets. The franchiser benefits
from the fact that the franchisee being the sole proprietor in most of the cases is likely to be
highly motivated to succeed. Success of the franchisee means more sales which translate in to
more royalties for franchiser.
In the project undertaken, proper research is done on services provided by KARVY to its
franchisees and same by other major players in the market and how well are they satisfied. The
data for the same is majorly primary and secondary to some extent. The research is based on
various factors such as security deposit, back office cost and facilities given by the franchisers.
This project enabled us to carefully analyse the basis on which the franchisee is taken and
provided us with an opportunity to interact with many franchisees of major broking firms.
Contents
1) Introduction to the Industry
1.1) Introduction to the Financial Market1.2) Financial Intermediation
2) Introduction to the Organization
2.1) About Karvy Stock Broking Limited2.2) Board Of Directors2.3) Mission, Vision and Quality Policy of the Company2.4) Journey of Karvy2.5) Different Verticals of Organization2.6) Organizational Structure2.7) Achievements2.8) Karvy Fortune2.9) Modes to become partner with Karvy 2.9.1) Franchisee 2.9.2) Remisser2.10) Other Major Players in Market
3) Research Methodology
3.1) Title of the Study 3.2) Duration of the Project 3.3) Objective of the Study 3.4) Type of Research 3.5) Sample size and method of selecting sample 3.6) Scope of Study 3.7) Limitations of Study
4) Facts and Findings
5) Analysis and Interpretation
6) SWOT
7) Conclusion
8) Recommendation and Suggestions
9) Appendix
10) Bibliography
Introduction to the Industry
The Indian financial services industry is in a process of rapid transformation. Reforms are
continuing as part of the overall structural reforms aimed at improving the productivity and
efficiency of the economy. The role of an integrated financial infrastructure is to stimulate and
sustain economic growth.
The Indian economy is estimated to have grown by 7.4 per cent in 2009-10. According to the
latest Central Statistical Organisation (CSO) data, financial services, banking, insurance and
real estate sectors rose by 9.7 per cent in 2009-10.
Overall, the US$28 billion Indian financial sector has grown at around 15 percent and has
displayed stability for the last several years, even when other markets in the Asian region were
facing a crisis, according to Ministry of External Affairs, Government of India. This stability was
ensured through the resilience that has been built into the system over time. The financial
sector has kept pace with the growing needs of corporate and other borrowers. Banks, capital
market participants and insurers have developed a wide range of products and services to suit
varied customer requirements. The Reserve Bank of India (RBI) has successfully introduced a
regime where interest rates are more in line with market forces.
India’s financial services sector will enjoy generally strong growth during coming years, driven
by rising personal incomes, corporate restructuring, financial sector liberalization and the growth
of a more consumer-oriented, credit-oriented culture. This should lead to increasing demand for
financial products, including consumer loans (especially for cars and homes), as well as for
insurance and pension products.
According to data from Bloomberg, India's market cap as a percentage of world market cap was
2.8 per cent as on December 31, 2009.
In 2009, there were 21 IPOs that raised US$ 4.18 billion as compared to 36 IPOs in 2008 that
raised US$ 3.62 billion.
Further, according to ICICI Securities, Indian companies are likely to raise up to US$ 42.43
billion from the primary market over the next three years.
According to Madhabi Puri-Buch, Managing Director and CEO, ICICI Securities' nearly US$ 20
billion will be raised from the initial public offer (IPO) market this fiscal (2010-11), of which
around US$ 8.49 billion would be from the public sector and an equal amount from private
companies.
Moreover, on the back of an increase in the participation of agriculture and other commodities,
the 23 commodity exchanges posted 50 per cent year-on-year growth in turnover in the April-
February period of 2009-10, to touch US$ 1.53 trillion, according to the commodity markets
regulator, Forward Markets Commission (FMC).
The average assets under management of the mutual fund industry stood at US$ 170.46 billion
for the month of May 2010, as compared to US$ 135.58 billion in May 2009, according to the
data released by Association of Mutual Funds in India (AMFI).
FINANCIAL MARKETS
A Financial Market can be defined as the market in which financial assets are created or
transferred. As against a real transaction that involves exchange of money for real goods or
services, a financial transaction involves creation or transfer of a financial asset. Financial
Assets or Financial Instruments represents a claim to the payment of a sum of money sometime
in the future and /or periodic payment in the form of interest or dividend.
Money Market- The money market ifs a wholesale debt market for low-risk, highly-liquid, short-
term instrument. Funds are available in this market for periods ranging from a single day up to
a year. This market is dominated mostly by government, banks and financial institutions.
Capital Market - The capital market is designed to finance the long-term investments. The
transactions taking place in this market will be for periods over a year.
Forex Market - The Forex market deals with the multicurrency requirements, which are met by
the exchange of currencies. Depending on the exchange rate that is applicable, the transfer of
funds takes place in this market. This is one of the most developed and integrated market
across the globe.
Credit Market- Credit market is a place where banks, FIs and NBFCs purvey short, medium
and long-term loans to corporate and individuals.
Constituents of a Financial System
FINANCIAL INTERMEDIATION
Having designed the instrument, the issuer should then ensure that these financial assets reach
the ultimate investor in order to garner the requisite amount. When the borrower of funds
approaches the financial market to raise funds, mere issue of securities will not suffice.
Adequate information of the issue, issuer and the security should be passed on to take place.
There should be a proper channel within the financial system to ensure such transfer. To serve
this purpose, Financial intermediaries came into existence. Financial intermediation in the
organized sector is conducted by a widerange of institutions functioning under the overall
surveillance of the Reserve Bank of India. In the initial stages, the role of the intermediary was
mostly related to ensure transfer of funds from the lender to the borrower. This service was
offered by banks, FIs, brokers, and dealers. However, as the financial system widened along
with the developments taking place in the financial markets, the scope of its operations also
widened. Some of the important intermediaries operating ink the financial markets include;
investment bankers, underwriters, stock exchanges, registrars, depositories, custodians,
portfolio managers, mutual funds, financial advertisers financial consultants, primary dealers,
satellite dealers, self regulatory organizations, etc. Though the markets are different, there may
be a few intermediaries offering their services in move than one market e.g. underwriter.
However, the services offered by them vary from one market to another.
Intermediary Market Role
Stock Exchange Capital Market Secondary Market to
securities
Investment Bankers Capital Market,
Credit Market
Corporate advisory
services, Issue of
securities
Underwriters Capital Market,
Money Market
Subscribe to
unsubscribed portion
of securities
Registrars,
Depositories,
Custodians
Capital Market Issue securities to the
investors on behalf of
the company and
handle share transfer
activity
Primary Dealers
Satellite Dealers
Money Market Market making in
government securities
Forex Dealers Forex Market Ensure exchange ink
currencies
Introduction to the Organisation
Karvy Stock Broking Limited
KARVY is a premier integrated financial services provider and ranked among the top five in the
country in all its business segments. It services over 16 million individual investors in various
capacities and provides investor services to over 300 corporate.
It is a member of all three:-
National Stock Exchange (NSE)
Bombay Stock Exchange (BSE)
Hyderabad Stock Exchange (HSE)
Karvy utilized its experience and superlative expertise to capitalize on its strengths and better its
service, innovate and provide new ones. It diversified in the process and thus evolved as India’s
premier integrated financial service enterprise.
Karvy has been a customer centric company since its inception. It offers a single platform
servicing multiple financial instruments in its bid to offer complete financial solutions to the
varying needs of both corporate and retail investors, where an extensive range of services are
provided with great volume-management capability.
KARVY covers the entire spectrum of financial services such as Stock broking, Depository
Participants, Distribution of financial products - mutual funds,bonds, fixed deposit, equities,
Insurance Broking, Commodities Broking, Personal Finance Advisory Services, Merchant
Banking & Corporate Finance, placement of equity, IPOs, among others. Karvy has a
professional management team and ranks among the best in technology, operations and
research of various industrial segments.
BACKGROUND
The flagship company, Karvy Consultants Limited was found with the vision and enterprise of a
group of practicing Chartered Accountants on a modest scale in 1981 in Hyderabad, where it
now has 13 branches.The name KARVY is actually the Initials of their names.
K - Mr. Kutumb Rao
A- Mr Ajay Kumar
R- Mr. Ramaswamy
V-Mr. Venkat Naidu
Y-Mr. Yugandhar
It initiated with just one activity and later carved roads into fields of registry and share
accounting as well. From then there was no stopping at all. A decade of commitment,
professional integrity and vision helped Karvy achieve a leadership position in its field. It is
known to handle the largest number of issues ever in the history of the Indian stock market in a
particular year. Thereafter, Karvy made inroads into a host of capital market services, corporate
and retail which proved to be a sound business synergy. Today Karvy has access to millions of
Indian shareholders, besides companies, banks, financial institutions and regulatory agencies.
Over the past one and half decades, Karvy has involved as a veritable link between industry,
finance and people.
An ISO 9002 company, Karvy’s commitment to quality and retail reach has made it an
integrated financial services company. A SEBI category 1 registrar, so far Karvy has handled
over 675 issues as Registrars to public issues, processed over 52 million applications and is
servicing over 16 million investors from various locations spread over 205 cities.
Board of Directors
Mr. C Parthasarathy, a leader in the financial services industry in India is responsible for
building Karvy as one of India's truly integrated Financial Services Provider; he is a fellow
member of the Institute of Company Secretaries of India, a Fellow Member of the Institute of
Chartered Accountants of India and a graduate in law. As Chairman, he oversees the group's
operations and renders vision and business direction. His passion and vision for achieving
leadership in the business made KARVY a leading financial intermediary ranking them as
number one in the registrar, Share Transfer and IPO Distribution businesses. He also holds
directorship in Karvy Stock Broking Limited, Karvy Investor Services Limited, Karvy
Computershare Private Limited, Karvy Comtrade Limited, Karvy Insurance Broking Pvt Ltd.
Mr. M Yugandhar, Managing Director, founder member of Karvy Consultants Limited, has
varied experience in the field of financial services spanning over 20 years. He is a Fellow
Member of the Institute of Chartered Accountants of India and was involved in the statutory and
branch audit of banks for 26 years.
Mr. M S Ramakrishna, Director, founder member of Karvy Consultants Limited is orchestrator
of technology initiatives such as the call center in the service of the customer. Mr. Ramakrishna
is a member of the Hyderabad Stock Exchange and is the director of Karvy Stock Broking
Limited, Karvy Investor Services Limited, Karvy Computershare Private Limited, Karvy
Comtrade Limited, Karvy Insurance Broking Pvt Ltd. He has helped Karvy diversify into the field
of medical transcription leveraging on the company's core competency of transaction
processing. He has more than 20 years of experience in the financial services arena.
Mr. Prasad V Potluri, Director, is an entrepreneur of repute in the IT professional services arena.
In June 1996, he founded "Procon" building the organization into one of the fastest growing IT
services players in the US with 225 employees and revenues of $22m in 27 months. He
successfully merged the company with RCM for $32m in November 1998. In 2000, he founded '
Albion Orion Company', a roll up in IT services sector in the US.
Karvy’s Mission:
“ 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 ”.
Vision of Karvy:
To achieve & sustain market leadership, Karvy shall aim for complete customer satisfaction, by
combining its human and technological resources, to provide world class quality services. In the
process Karvy shall strive to meet and exceed customer's satisfaction and set industry
standards.
QUALITY POLICY:
To achieve and retain leadership, Karvy aims for complete customer satisfaction, by combining
its human and technological resources, to provide superior quality financial services. In the
process, Karvy strives to exceed Customer's expectations.
As per the Quality Policy, Karvy will:
Build in-house processes that will ensure transparent and harmonious relationships with its
clients and investors to provide high quality of services.
Establish a partner relationship with its investor service agents and vendors that will help it in
keeping up to its commitments to the customers.
Provide high quality of work life for all its employees and equip them with adequate knowledge
& skills so as to respond to customer's needs.
Continue to uphold the values of honesty & integrity and strive to establish unparalleled
standards in business ethics.
Use state-of-the art information technology in developing new and innovative financial
products and services to meet the changing needs of investors and clients.
Strive to be a reliable source of value-added financial products, services and constantly guide
the individuals and institutions in making a judicious choice of same.
Strive to keep all stake-holders (shareholders, clients, investors, employees, suppliers and
regulatory authorities) proud and satisfied.
Achievements:
Among the top 5 stock brokers in India (4% of NSE volumes)
India's No. 1 Registrar & Securities Transfer Agents
Among the top 3 Depository Participants
Largest Network of Branches & Business Associates
Among top 10 Investment bankers
Largest Distributor of Financial Products
Adjudged as one of the top 50 IT uses in India by MIS Asia
Fully Fledged IT driven operations
KARVY MILESTONES
Karvy has travelled a success route over the past 20 years and positioned itself as an emerging
financial service giant in which embeds the confidence and support of enviable patrons across
the financial world. Patrons are also of diversified fields which includes over 16 million individual
investors in various capacities and 300 corporate comprising the best out of the whole lot .Years
of experience of holistic financial services and expertise in this industry has helped it gain the
status it enjoys and cherishes today.
Journey of Karvy: Success Year after Year
Year Addition
1979-1980 Karvy and Company
1981-1982 Karvy Consultants Ltd
1985-1986 Foray into capital markets as registrars and transfer agents.
1987-1988 First branch at Mumbai
1988-1989 Stock broking
1990 Entry into retail stock broking
1992 Set up investor service centers
1993 Financial Products Distribution
1994 Entry into Mutual Fund Services
1995 Corporate Finance and Investment banking
1997 First Registrar in the country to be awarded ISO 9002
1999 IT enabled service - BPO
2000 E – Business www.karvy.com
2001 Insurance and Launch of retail arm Karvy the Finapolis – Your Personal Finance Advisor
2002 Launch of PCG
2003 Commencement of Secondary Debt and WDM trading
2004 JV with Computer share Limited , AustraliaLaunch of Karvy Global Service
Karvy Comtrade
2005 Karvy Insurance Broking Pvt. Ltd.
2006 Karvy Realty & Services (India) Limited – KRSL
2007 Karvy Fortune , Funding by ICICI Ventures Ltd., Barings Asia
2008 Karvy Private Wealth
2009 Karvy Data Management Services Ltd
Karvy Financial Services Ltd
Milestones to be achieved in future:
To set up its own Asset Management Company
To set up its own Bank by 2012
Karvy Group of Companies
As discussed earlier, KARVY offers a single platform servicing multiple financial instruments in
its bid to offer complete financial solutions to the varying needs of both corporate and retail
investors. The range of products and services are provided by the following wings.
1) Karvy Consultants Limited:
This is the flagship company of Karvy Group and it controls the organizational affairs, channels
of progress, work affairs and pioneering business policies. This was the first business the
KARVY group ventured into, but now they have transferred it into a joint venture with computer
share limited of Australia, the world’s largest registrar. This company services around 6 lakh
customer accounts in a spread of 250 cities/towns in India.
2) Karvy Stock Broking Limited
It is undisputable fact that the stock market is unpredictable and volatile, but despite this KSBL
enjoys a high success rate as a wealth management option. Karvy Stock Broking Limited offers
services that are much beyond serving just as a medium for buying and selling stocks and
shares. Instead it provides multi dimensional and multi focused services. It offers trading
facilities for National Stock Exchange, Bombay Stock Exchange and Hyderabad Stock
Exchange and tries to make trading safe to maximum possible extent. It also offers special
portfolio analysis packages that provide daily technical advice on scrips for successful portfolio
management. It provides customized advisory services to help the client make right financial
moves which specifically suits their portfolios.
3) Karvy Computershare Limited
Karvy Computershare Limited
This wing of Karvy has traversed wide spaces to tie up with the world’s largest transfer agent,
the leading Australian company Computershare Limited. This company services more than 75
million shareholders across 7000 clients and makes its presence felt in over 12 countries across
5 continents. It has also entered into a 50-50 joint venture with Karvy. After transferring
completely to this new entity it has tried to enrich the financial services industry as a whole. The
worldwide network of Computershare helps it to adapt to the international standards in addition
to leveraging the best technologies from all over the world.
4) Karvy Comtrade Limited
Karvy Commodities focuses on taking commodities trading to new dimensions of reliability and
profitability. They have made commodities trading, an essentially age-old practice, into a
sophisticated and scientific investment option. It helps in enabling trade in all goods and
products of agricultural and mineral origin that include lucrative commodities like gold and silver
and popular items like oil, pulses and cotton through a well-systematized trading platform.
5) Karvy Insurance Broking Limited:
Karvy Insurance Broking Pvt. Ltd., provides both life and non-life insurance products to retail
individuals, high net-worth clients and corporates. With the opening up of the insurance sector
and entry of a large number of private players in the business, it is in a position to provide tailor
made policies for different segments of customers.
6) Karvy Investor Services Limited:
This wing of Karvy is registered with SEBI as a category 1 merchant banker and is also
recognized as a leading merchant banker of the country. It has built its reputation by capitalizing
the opportunities as and when it comes, be it in corporate consolidations, mergers and
acquisitions or corporate restructuring. Involvement in raising resources for corporate or
government undertaking successfully over the past two decades has given it a tremendous
confidence boost.
7) Karvy Data Management Services Limited:
Started in 2008,Karvy Data Management Services is the domestic BPO arm of the Karvy Group
and services corporate across various industry verticals and business horizons. KDMSL is
emerging as a leading service provider in the areas of E-governance processing, insurance
back office processing, record keeping, back office for BFSI clientele and is in pursuit to
establish credentials in the areas of Telecom processing, Data management requirements of
large corporate.
8) Karvy Global Services:
Karvy Global Services is a knowledge services company. It provides specialist resources to
extend in house analyst teams in driving clear business results. It serves investment banks,
insurance providers, brokerages, hedge funds, research agencies, and life settlement providers
across the United States, Middle East, and Europe. Their areas of focus include equity and
industry research, commodity research, credit analytics, technology-based workflow solutions,
insurance policy and portfolio valuation, and other specialized services.Incorporated in 2004,
The Company is backed by over 25 years of experience through India’s largest financial
services company, the Karvy Group. It is located in New York and have primary global delivery
centre in Hyderabad, India.
9) Karvy Finance:
Karvy Financial Services Ltd. is a wholly owned subsidiary of Karvy Stock Broking Ltd .It was
established in the year 2009.KARVY Group, a pioneer in financial services in India, has forayed
into retail finance space with its Non Banking Financial Corporation (NBFC) – Karvy Financial
Services Ltd or Karvy Finance. Karvy Finance has a vision to be the “Category Champion” for
Retail Finance in India. Karvy Finance aims to offer a complete bouquet of financial services
products to its customers with secured and unsecured lending products (such as loans against
securities, loans against property and personal/business loans).
10)Karvy Realty India Limited:
Karvy Realty (India) Limited (KRIL) is promoted by the Karvy Group, India’s largest financial
services group. The group carries forward its legacy of trust and excellence in investor and
customer services delivered with passion and the highest level of quality that align with global
standards.
Karvy Realty (India) Limited is engaged in the business of real estate and property services
offering:
Buying/ selling/ renting of properties
Identifying valuable investments opportunities in the real estate sector
Facilitating financial support for real estate and investments in properties
Real estate portfolio advisory services.
11)Karvy Fortune:
From the year 2007.Karvy Stock Broking Limited started offering its franchisee through Karvy
Fortune, a separate vertical which would handle all the matters related to franchisees. It
provided opportunities for the franchisees to join hands with the company that is ranked
among top five in the country in all its business segments. Karvy Franchisees are provided
with support of highly qualified and dedicated professionals. Karvy provides the complete
backing of its research. Armed with these invaluable inputs, customers can take right
investment decisions. Karvy Stock Broking Limited has over 1000 franchisees all over India
and around 10 in Rajasthan.
Organisational Structure
Karvy Fortune
Karvy Stock Broking is expanding it’s business in all over India to reach corner customers of
India, Karvy has deputed Karvy Fortune in 2007, It is carved to reach like-minded people who
wish to serve the customers with utmost reliability and fervor. A Business Associate of Karvy will
actively promote and market Karvy’s services and products and keeps customers updated of
the forthcoming new products and schemes. Karvy is a pioneer financial services provider in
India and has operations in segments such as stock, commodities and insurance broking,
investment banking, mutual funds distribution and depository services. Any Individual from India
can join Karvy Family” as Franchisee, Remisser or as an Independent Financial Advisor.
Why Karvy?
Karvy Stock Broking Ltd ranks among top 5 stock brokers in India, it ranks among top 5
Depositary Participants in India, with the huge net work of over 500 branches in 375 locations
across India and overseas at Dubai, executes 150,000+ trades in NSE/BSE. Karvy has a top
notch research team, advisory team, cutting edge technology support team to serve it’s
customers in 24/7 manner. Also there are few facts as below:
Every 50th Indian is serviced by KARVY
Every 20th trade in stock market is done through KARVY
Every 6th Investor in India invests through KARVY
India’s No.1 Registrar and Transfer Agent:KARVY
Every 10th Demat Account is held at KARVY
Ways to become Business Partners with Karvy
One who is interested to associate with Karvy can do it in two ways. Either he can become a
franchisee or a remisser. Karvy offers excellent services to its business associates in form of
sharing and other facilities. In addition to it, there are various add-on services that help business
associates to generate more revenue.
Firstly we will discuss about associating with Karvy as a Franchisee.
Franchisee:
What is franchising?
Franchising is an arrangement whereby a franchiser grants franchisee, the right to sell products
in exchange for some type of consideration.
Their are two parties to it namely franchisee (An individual who purchases and runs a
franchise) and franchisor (from whom the franchise is purchased)
Who can take franchise?
Has the capacity to invest in infrastructure.
Have ready clientele base.
Have start-up capital to invest.
Wants to invest full time to business.
Wants tool to service and support clients.
Associating with Karvy as a franchisee:
This concept essentially talks about appointing PARTNERS for KARVY across the nation to
conduct the broking (stock and commodities) and distribution business.
These franchisees would have to maintain the corporate standard infrastructure, look and feel,
service delivery and other aspects and function just like KARVY branches
Benefits of Associating with Karvy:
Leading Stock Broker
Leading IPO Distributor
Leading Mutual Funds Distributor
Leading Depository Participant
Strong Brand Recognition
Diversified Product Offerings
Quality Research
Strong Service Support
Strong Branch Network
Eligibility Criteria to become a franchisee:
1. An individual/ company/ partnership firm with good track record & reputation in financial
services/other business/social circles with a good client base.
2. Sub-broker registration in SEBI/Exchanges through KSBL is compulsory without which the
remittance of accrued brokerage to franchisee will be kept on hold till registration is complete.
3. Capacity to invest in setting up & maintaining the infrastructure & manpower required for
carrying on the business as specified below at their own expense.
a. Own or leased premises with requisite power supply and support facilities
Including LAN duly approved by KSBL in writing;
b. Interior work, furniture and Name Board conforming to the design, colours and
Standards approved by KSBL
c. Connectivity and communication facilities including leased line, ISDN line,
Telephone line etc duly approved by KSBL.
d. Legally licensed operating system, database and other software including
back- office software required for the operations at franchisee’s premises;
e. Any other equipment or installations necessary for carrying on the business
without interruption.
4. The sub-broker/ employees of corporate/firm should hold valid NCFM certificates for Cash,
F&O and ensure that NCFM certificate holder in person has to sit on trading terminals in whose
name the terminal ID has been generated.
Business Partner Package offered by Karvy:
1. Product Support: Broking through BSE (Cash & F&O), NSE (Cash & F&O), DP services
through NSDL, CDSL.
2. Sales Support: A Relationship Manager will be assigned to you for regular Research advice
& Market Updates through Chat/Phone/Emails/Personal meetings.
3. Business Development: Product research, marketing & business development support on a
regular basis to encourage knowledge based selling.
4. Back Office Support: Centralized Web based back office support through a dedicated
Customer Service Executive assigned to you for routine queries through Chat-Phone- Emails.
All stationary items bills, letter heads will be provided by KSBL and digital contract notes will be
delivered to the remisser id as per charges applicable.
5. Setup Support: Initial Glow sign flex material & Initial Visiting Cards will be provided by
KSBL.
Commercial Terms & Conditions
For Franchisees:
1. Refundable Deposits: Total INR 250,000/-
a. INR 150,000/- with KSBL (Equities)
b. INR 100000/-for commodities (additional)
2. Registration Charges:
INR 27500/-
3. Revenue Sharing:
BROKERAGE SHARING RATIO (EQUITY)
KSBL: 40%
BUSINESS PARTNER: 60%
4. Minimum Brokerage to be charged to end clients:
Segment Type Brokerage Rate Applicable
Cash Segment (BSE & NSE) Trading 0.04% on Turnover
Derivative Segment (F&O & Commodities) Trading 0.04% on Turnover
Cash Segment (BSE & NSE) Delivery 0.40%
5. Back Office Cost:
INR 1500 per month
Facilities offered in the package:
2Km Area: In order to reduce competition between the franchisees of the same company,
Karvy has come out with the policy that it would not give any franchisees within 2km area once
it has given there.
Client Database: The Company would provide database of those clients who are somehow
dealing with Karvy but are not trading through it. This database helps franchisees to tap those
clients and grow their business.
Cheque Punching Facility: The Company authorises its franchisees to punch the client’s
cheque and increase their trading limit hand to hand rather than going to branch office for the
same.
Services provided to Franchisees:
Online Mutual fund: One can invest easily through the facility of online mutual fund. It is
convenient way to invest in different funds with the same cheque which is otherwise not
available in offline mode. The commission structure is as follows:
Upfront(on login) : 50%
Trail( loyalty Income) : 50%
Brokerage : 50 paisa per transaction; of this 75% will be
taken by franchisee and rest by company.
Online IPO Facility: Franchisees provide their clients with facility of online IPO and the
commission structure is made on the same which is earned by the franchisee. The commission
is provided in two ways:
Per application money
On the basis of allotment
Loan against Securities: The shares can be pledged by clients against whom they can obtain
loan and can use it for any purpose besides purchasing additional shares. The franchisee gets
0.5% of the loan taken.
Loan against Mutual Funds: Besides the above, clients can also take loan against mutual
funds held in their demat account.
Marginal Funding: This is somewhat similar to loan against securities, the only difference
being that the loan taken can only be used for purchasing additional units of shares
Interest charged for the same- 16%-18%
Life Insurance/General Insurance: Karvy has tie-up with almost all LI/GI companies and
franchisees can sell those insurance products.
TIN/PAN FC: This is an optional facility which franchisee can avail. Thereafter franchisee is
authorised to accept applications for PAN number and TIN number which he can directly send
to main office of Company after punching those applications. Besides he can collect TDS
amount and send it to Hyderabad Office.
Share of Franchisee in TIN FC:
Pan Card-Rs 5 per application
E-TDS:
Upto Rs 100- Rs 7.5
Rs 101-1000-Rs 45
Above Rs 1000- Rs 165
Besides franchisee their is another way to partner with Karvy and that is by becoming its
remissers. So, now we will discuss another way to associate with company.
REMISSERS:
Who is remisser ?
Remissers are the individuals, not on the payroll of organization, but stationed organisation’s
premises to trade for their own clients.
Who can be a Remisser?
Don’t want to invest in infrastructure
Don’t want to invest in startup capital
Want to invest spare time in Business
Have good existing relations
Associating with Karvy as a Remisser:
KARVY has started appointing Remissers at its own branches.
Remissers would be individuals, not on the payroll of organization, but stationed at KARVY’s
premises to trade for their own clients.
The idea here is to leverage on the client base of the remisser and sharing revenue generated
with him.
The remisser’s benefit is that he doesn’t have to incur any additional infrastructure setup or
maintenance cost.
Eligibility Criteria to enter into a Relationship as a Business
Associate (Remisser):
1. An individual/ company/ partnership firm with good track record & reputation in financial services/other business/social circles with a good client base.
2. Sub-broker registration in SEBI/Exchanges through KSBL is compulsory without which the remittance of accrued brokerage to remisser will be kept on hold till registration is complete.
3. The sub-broker/ employees of corporate/firm should hold valid NCFM certificates for Cash, F&O and Commodity segments and ensure that NCFM certificate holder in person has to sit on trading terminals in whose name the terminal ID has been generated.
Business Partner Package Offered by KARVY
1. Product Support: Broking through BSE (Cash & F&O), NSE (Cash & F&O), DP services through NSDL, CDSL.
2. Sales Support: A Relationship Manager will be assigned to you for regular Research advice & Market Updates through Chat/Phone/Emails/Personal meetings.
3. Business Development: Product research, marketing & business development support on a regular basis to encourage knowledge based selling.
4. Back Office Support: Centralized Web based back office support through a dedicated Customer Service Executive assigned to you for routine queries through Chat-Phone- Emails. All stationary items bills, letter heads will be provided by KSBL and digital contract notes will be delivered to the remisser id as per charges applicable.
Commercial Terms & Conditions
Remissers:
1. Refundable Deposits: Total INR 50,000/-
a. INR 50,000/- with KSBL (Equities)
2. Registration Charges:
Rs 27500
3. Revenue Sharing:
BROKERAGE SHARING RATIO (EQUITY)
KSBL: 60%
BUSINESS PARTNER: 40%
4. Minimum Brokerage to be charged to end clients:
Segment Type Brokerage Rate Applicable
Cash Segment (BSE & NSE) Trading 0.03% On Turnover
Derivative Segment ( F&O & Commodities) Trading 0.03% On Turnover
Cash Segment (BSE & NSE) Delivery 0.30%
Services provided to Remissers:
Online Mutual fund: One can invest easily through the facility of online mutual fund. It is
convenient way to invest in different funds with the same cheque which is otherwise not
available in offline mode. The commission structure is as follows:
Upfront(on login) : 50%
Trail( loyalty Income) : 50%
Brokerage : 50 paisa per transaction; of this 75% will be
taken by remisser and rest by company.
Online IPO Facility: Remissers provide their clients with facility of online IPO and the
commission structure is made on the same which is earned by the remissers. The commission
is provided in two ways:
Per application money
On the basis of allotment
Loan against Securities: The shares can be pledged by clients against whom they can obtain
loan and can use it for any purpose besides purchasing additional shares. The remissers gets
0.5% of the loan taken.
Loan against Mutual Funds: Besides the above, clients can also take loan against mutual
funds held in their demat account.
Marginal Funding: This is somewhat similar to loan against securities, the only difference
being that the loan taken can only be used for purchasing additional units of shares
Interest charged for the same- 16%-18%
Life Insurance/General Insurance: Karvy has tie-up with almost all LI/GI companies and
remissers can sell those insurance products.
Other Terms & Conditions for Business Associates:
1. Taxes:
Securities Transaction Tax and other exchange charges & taxes as applicable will be
leived.
2. Payment Terms:
a. Payment delayed by 3 days will be charged @ 18% for both cash & F&O
segment. However any further delay, the amount will be debited to SUBBROKER
b. The Brokerage accrued will be returned to the SUBBROKER on a monthly basis subject to
receipt of audit report.
c. There will be no sharing of brokerage in proprietor/partner/directors trading account with
Karvy.
3. Exclusivity:
As a Business Associate of KSBL you are required to sell all the products
promoted by the company which includes IPO, MF, PMS, etc. exclusively for KSBL.
4. Change in sub brokerage:
The above rates of sub-brokerage payable to the sub broker re subject to modification from
time to time to be mutually agreed between KSBL and the Remissers.
5. Certifications:
Sub broker and his/her employees have to clear NCFM examination Cash & Derivatives
TIN/PAN – FC
Eligibility Criteria to enter into a Relationship as TIN/PAN Facilitation Centre with Karvy Data Management Services Limited.
1. An individual/ company/ partnership firm with good track record & reputation in financial
services/other business/social circles.
2. Capacity to invest in setting up & maintaining the infrastructure & manpower required for
carrying on the business as specified below at their own expense.
a. Own or leased premises with requisite power supply and support facilities including LAN
duly approved by KDMSL in writing.
b. Interior work, furniture and Name Board conforming to the design, colours and standards
approved by KDMSL
c. Connectivity and communication facilities including leased line, ISDN line, telephone line etc
duly approved by KDMSL
d. Legally licensed operating system, database and other software required for the operations
at second party’s premises.
f. Any other equipment or installations necessary for carrying on the business without
interruption.
Support given by Karvy Fortune to setup TIN/PAN Facilitation Centre
1. Product Support
2. Back Office Support
3. Setup Support: Initial Glow sign flex material & Initial Visiting Cards will be provided by
KDMSL as per charges applicable.
2. Charges Details:-
A) Security Deposit: Rs 100000
B) One time registration cost INR 2,000/- (Indian Rupees Two thousand only)
C) Monthly Recurring Charges for Back office and Bandwidth: - Rs. 500/- P.M.
D) For additional User ID (Optional) Rs.500/- per Id /per month
Revenue of Franchisees through TIN FC
TIN FC is an optional service provided to franchisees at a minimal cost and is a good source to
generate constant income.TIN/PAN FC provides the franchisee to make PAN cards, give TIN
number and the facility to collect TDS amount and punch it at their own premises(e-TDS) and
send it to NSDL later. The franchisee revenue structure is as follows:
Pan Card-Rs 5 per application
E-TDS:
Upto Rs 100- Rs 7.5
Rs 101-1000-Rs 45
Above Rs 1000- Rs 165
Other Major Players in the Market
1) Bonanza Portfolio
Established in the year 1994, Bonanza developed into one of the largest financial services
and broking house in India within a short span of time. Today, Bonanza is the fastest
growing financial service with 5 mega group companies under it. Bonanza has spread its
trustworthy tentacles all over the country with pan-India presence across more than 1400
outlets spread across 460 cities.
Benefits of associating with Bonanza:
It is the most trusted retail centric broking house ranked among the top 5 broking houses in
the country. It is awarded by BSE as ‘Major Volume Driver’ in ’04 – ‘05 , ’06 – ’07 , ’07 – ’08
and nominated among the Top 3 for the "Best Financial Advisor Awards '08" in the
category of National Distributors - Retail instituted by CNBC-TV18. It cover services such
as Equity and Derivatives, Commodities, currency derivatives, insurance, IPO and
depository services.
2) Kotak Securities
Kotak Securities is 100% subsidiary of Kotak Mahindra Bank and one of the oldest and
largest stock broking firms in the Industry. It is present in 400 cities with 1113 offices all
over the country. It has developed its own proprietary trading platform which is robust and
among the best in the industry. It has more than 150 technology professionals constantly
working on upgrading and speeding up all its systems.
Benefits of associating with Kotak securities:
Brand, Leadership Edge, Strong financial background, Investment solutions and Marketing.
3) Anand Rathi
Anand Rathi is a leading full service investment bank founded in 1994 offering a wide range of
financial services and wealth management solutions to institutions, corporations, high–net worth
individuals and families. The firm has rapidly expanded its footprint to over 350 locations across
India with international presence in Hong Kong & New York. Founded by Mr. Anand Rathi and
Mr. Pradeep Gupta, the group today employs over 2,500 professionals throughout India and its
international offices.
Benefits of associating with Anand Rathi:
It is a reputed brand with years of experience & trust and has ready business model withZero
infrastructure cost module. It has attractive Revenue sharing..It provides with excellent
Marketing & Sales Support
4) India Infoline:
The India Infoline group, comprising the holding company, India Infoline limited and its wholly-
owned subsidiaries, straddle the entire financial services space with offerings ranging from
equity research, equities and derivatives trading, commodities trading, portfolio management
services, mutual funds, life insurance, fixed deposits, and other small savings instruments to
loan products and investment banking. It was founded in 1995 and the company has a network
of over 2100 business locations (branches and sub-brokers) spread across more than 450 cities
and towns
5) Angel Broking
Angel Broking's tryst with excellence in customer relations began in 1987. Today, Angel has
emerged as one of the most respected Stock-Broking and Wealth Management Companies in
India. With its unique retail-focused stock trading business model, Angel is committed to
providing ‘Real Value for Money’ to all its clients.
Benefits of associating with Angel Broking:
It has a specially designed training program to develop the necessary business knowledge. It
provides with dedicated Relationship Manager for Equity as well as Wealth Management
Products to guide the business and its development in the long run. It also gives branding
support in terms of regular Research & Advisory workshops.
6) Nirmal Bang
Incorporated by Mr.Nirmal Bang, it started its equity broking business operations in 1987
as a sub broker. Currently group is engaged with various capital market operations like
equity broking, commodity broking, arbitrage trading, investment activities, margin funding
and distribution of financial products. All the group companies are held 100%, directly or
indirectly by the promoters.Today it serves over 1 lakh customers spread across 360 cities.
It has 180 sub brokers in Rajasthan and over 1500 sub brokers all over India.
7) Sharekhan
Sharekhan, the retail broking arm of SSKI group and one of the largest stock broking houses in
the country has won the prestigious awaaz consumer vote awards 2005 for the most preferred
stock broking brand in India, in the investment advisors category Sharekhan Bag round network
includes over 250 centres across 123 cities in India and having around 120000 customers and
equal number of demat customers.
The reason behind the preferences for brands were unveiled by examines the following:
Tangible features of product /service
Softer, intangible features like imagery, equity driving preference
Tactical measures such as promotional /pricing schemes
8) Reliance Money
Reliance Securities Limited is a Reliance Capital company and part of the Reliance Anil
Dhirubhai Ambani Group. Reliance Securities is a permitted user of the brand "Reliance Money"
for promoting its various products and services.Reliance Money through its pan India presence
with 6,233 outlets, has more than 3.5 million customers.
Benefits of associating with Reliance Money:
As a sub-broker or franchisee one benefits from the goodwill, recognition, business name and
reputation.You get access to number of new products as well as change charge structure,
which will help you to retain clients and thereby providing an opportunity to make more money.
After association with Reliance Money as a sub broker or a franchisee we provide timely co
branding and marketing collaterals on basis of performance.
9) Religare
Religare Enterprises Limited (REL), is one of the leading integrated financial services groups of
India.REL’s businesses are broadly clubbed across three key verticals, the Retail, Institutional
and Wealth spectrums, catering to a diverse and wide base of clients.
REL offers a multitude of investment options and a diverse bouquet of financial services and
has a pan India reach in more than 1550 locations across more than 460 cities and towns.
10) Unicon Investments
UNICON is a financial services company which has emerged as a one-stop investment
solutions provider. It was founded in 2004 by two visionary and hard working entrepreneurs, Mr.
Gajendra Nagpal and Mr. Ram M. Gupta, who possess expertise in the field of Finance. The
company is headquartered in New Delhi, and has its corporate office in Mumbai with regional
offices in Kolkata, Chennai, Hyderabad and Noida.
UNICON is a professionally managed company led by a team with outstanding managerial
acumen and cumulative experience of more than 400 man years in the financial markets The
Company is supported by more than 4500 Uniconians and has a team of over 900 business
offices in 235 cities across India.
Research Methodology
Research is a common language refers to a search of knowledge. Research is scientific &
systematic search for pertinent information on a specific topic, in fact research is an art of
scientific investigation. Research Methodology is a scientific way to solve research problem. It
may be understood as a science of studying how research is don’t scientifically. In it we study
various steps that are generally adopted by researchers in studying their research problem. It is
necessary for researchers to know not only know research method techniques but also
technology.
The scope of Research Methodology is wider than that of research methods.
The research problem consists of series of closely related activities. At times, the first step
determines the native of the last step to be undertaken. Why a research has been defined, what
data has been collected and what a particular methods have been adopted and a host of similar
other questions are usually answered when we talk of research methodology concerning a
research problem or study.
RESEARCH DESIGN
A research design is defined, as the specification of methods and procedures for
acquiring the Information needed. It is a plant or organizing framework for doing the study
and collecting the data. Designing a research plan requires decisions all the data sources,
research approaches, Research instruments, sampling plan and contact methods.
Title of the Study:
A comparative study between services provided to Karvy Franchisees and other Franchisees.
Duration of the Project:
The duration of the project was 45 days from 17th June 2010 to 1st August.2010
Objective of the Study:
To learn the basis on which the franchisee is given
To learn how company saves its fixed costs by offering franchisees.
To explore franchisees of different companies in the City.
To know franchisee plans of different companies.
To learn about various financial products
To interact with number of franchisees and know what problems they face in services provided to
them.
To know the strengths of other company’s franchisee plans
To suggest possible suggestions to Karvy
Type of Research:
This research is descriptive and qualitative type of research which was used to collect useful
data
.
Sample Size and Method of Selecting Sample:
The sample size used for collecting data is 100.The samples have been collected purely on
judgemental basis .The name of the franchisees were collected from the website of National
Stock Exchange(NSE) and thereafter questionnaires were used to collect data. Statistical tools
are carefully used wherever required .Efforts has been put to properly analyse the data and
come to proper conclusion.
Scope of Study:
The study was carried in entire Jaipur City. It includes franchisees of almost all reputed
companies. This report can be used further in similar research work as secondary data.
Limitation of Study:
While carrying research work, lot of problems were faced by us:
It was difficult to obtain correct data and thus we had to visit both companies and their
franchisees separately to verify the data.
We were faced with lack of cooperation by companies and they wanted to keep their data
confidential.
In few cases, the company had differentiating plan for their franchisees. The franchisee plan was
different according to franchisees.
Facts and Findings:
This study is a comparative one to find out the difference between the services provided by
Karvy to its franchisees and by other companies to its franchisees. The basis on which the data
was collected was the basic one on the basis of which a person is interested to take the
franchisee of a company. A person taking franchisee always looks to the amount he needs to
invest, and whether facility provided to him is worth his investment.
The basis of difference on which comparison is made are as follows:
Number of Franchisees
Security Deposit
Registration Charges
Back Office Cost
Brokerage
Sharing
Client Database
Cheque Punching Facility
Online IPO and Mutual Fund facility
Loan against shares and mutual funds
Trading limit
Support Level
Marginal funding
Others
The findings after market comparison has been put into the tabular form as given below :
Basis Of Difference
KARVY SHAREKHAN KOTAK SECURITIES
No. Of Franchisees
10 in RajasthanOver 1000 in India
10 in Jaipur
Security Deposit Rs 150000 (Equity)+Rs 100000 (Commodity)
Rs 300000
Registration Charges
Rs 27500 Rs 28000 Rs27500
Back Office Cost
Rs 2000 per month
No Cost Rs 1000
Brokerage 3P:30P 3P:30P 2P:20PSharing 60:40 50:50 50:50Client Database Yes No No
Cheque Punching Facility
Yes No No
Online IPO and Mutual Funds Facility
Yes Only Online IPO Yes
Loan against Securities and Mutual Funds
Yes Only loan against Securities
Only Loan against securities
Trading limit Intraday-8-10 timesDelivery-3-4 times
Intraday-5 timesDelivery-3 times
Depends on customer profile
Support Level Head Office Branch Office Branch Office
Marginal Funding
Yes No Yes
Demat opening Charges
Rs 650AMC-Rs 440
Free opening Free Opening
Others 2Km FacilityTIN/PAN FC
Continued.....
Basis Of Difference
ANAND RATHI BONANZA PORTFOLIO
INDIA INFOLINE
No. Of Franchisees
135 in Rajasthan
Security Deposit Rs 100000 per segment
Rs 50000 Per segment
Rs 200000
Registration Charges
Rs 30000 Rs 25000 Rs28300
Back Office Cost
Rs 2500 per month
No Cost No Cost
Brokerage 2P:20P Rs 1000 per Crore 2P:20P
Sharing 50:50-sharing1P:10P-Fixed
According to client profile
50:50
Client Database No No No
Cheque Punching Facility
Yes No No
Online IPO and Mutual Funds Facility
Online IPO Yes Yes
Loan against Securities and Mutual Funds
Loan against securities
Only loan against Securities
Only Loan against securities
Trading limit Intraday-3 timesDelivery-1 time
Intraday-2- 3timesDelivery-2 times
Depends on Clients profile
Support Level Both Head Office and Branch Office
Branch Office Both Head Office andBranch Office
Marginal Funding Yes No No
Demat opening Charges
Free Free opening Free Opening
Others USP: Brand Name Technical Calls, SMS alert
InitialLevel support, Free Software
Continued....
Basis Of Difference
NIRMAL BANG ANGEL BROKING
UNICON INVESTMENTS
No. Of Franchisees
180 in RajasthanAround 1500 all over India
9000 sub brokers all over India
Security Deposit Rs 200000 Rs 100000 Rs 100000
Registration Charges
Rs 28000 Rs27000 Rs 27500
Back Office Cost
Rs 850 per month No Cost Rs 3500 per month
Brokerage 2P:20P 1P:10P Depends on clients profile
Sharing 60:40 75:25 Fixed 1P:10P
Client Database No No No
Cheque Punching Facility
No No No
Online IPO and Mutual Funds Facility
Yes Only online IPO No
Loan against Securities and Mutual Funds
Only Loan against securities
Only Loan against securities
Only Loan against securities
Trading limit Intraday-10 timesDelivery-3 times
Intraday-5 timesDelivery-3 times
Intraday-10 timesDelivery-3-4 times
Support Level Both Head Office and Branch Office
Branch Office Branch Office
Marginal Funding
Yes No No
Demat opening Charges
Free openingAMC-Rs 225
Rs 550
Others Free insurance with margin cheque of
Materials provided for Promotion and marketing
Rs 500000
Analysis and Interpretation:
Number of Franchisees of different Broking House used as samples for data collection
The study was conducted randomly on almost all the franchisees of reputed companies.
Out of 100 franchisees that were selected as samples consisted of
Name of Companies Figures (in %)
Bonanza 15
Anand Rathi 15
Kotak Securities 8
India Infoline 15
Sharekhan 12
Nirmal Bang 5
Angel Broking 15
Reliance Money 10
Religare 5
1) How long have you been associated with the current company?
a) 0-1 years b)1-2 years
c) 2-3years d) More than 3 years
It was found in the study that 23% were doing business for less than 1 year. Out of these 68%
were those who had switched from some another company due to some problems or had
taken new franchisee of different company besides the existing one. Only 16% of the
franchisees were running for more than 3 years. 25% carried their business for more than 2
years.
Besides this, we noticed that the owner had different franchisees for equities and commodities
as per the services suitable to them.
2) Have you heard of Karvy?
a) Yes b) No
In the study, 92%of the franchisees knew well about Karvy. But their their were around 8% of
franchisee who did not knew about Karvy.
Among these, 45% were those who knew Karvy as Registrar and transfer agent but were not
aware about their equity business. This was probably due to reason that Karvy doesn’t go for
marketing itself and so few of them were unaware.20% were not even aware of its name.This
was due to the reason of less knowledge on part of franchisees about the market competitors.
3) Would you like to know more about Karvy, especially, Karvy Fortune?
a) Yes b)No
Maximum franchisees showed interest in learning about Karvy Fortune and its plan offered to
the franchisees. This data was around 95% who keenly wanted to know about its plan and
even raised many queries related to it.
But 5% of total did not even want to know more about it. This was probably due to reason that
they did not had enough time to hear about it, were satisfied with the current organisation or
had already interacted with the company and knew its plan completely. But this formed a
minimal part of survey.
4) Do you think that their should be appropriate distance between two franchisees of the same
company?
a) Yes b) No
b) Doesn’t matter
Around 55% of the franchisees agreed to the fact that their should be appropriate distance
between two franchisees of the same company as it reduces competition, whereas 17%
disagreed to the fact. According to 28% of franchisees, this facility didn’t matter to them as
they will always have competition with other companies, if not Karvy.
Those with majority agreed to the fact that their should be appropriate distance between
franchisees of same organisation because of the fact that we saw many organisations who
had their franchisee in the same location and they had to face problems.
Few, who had disagreed to the fact, were right to some point that competition is huge in
market and there would definitely be competition with some other organisation and so this
facility would prove to be of no use.
5) Do you work on fixed basis or sharing basis?
a) Fixed b) Sharing
Their were 35% of the franchisees who worked on fixed basis of 1P:10P.They did not like to
work on sharing basis. They came with a point that by this way they could generate more
revenue. Rest 65%worked on sharing basis. Out of those who worked on sharing basis, 43%
worked on 75:25.This was the most profitable sharing offered to franchisees by some
companies when they generated good volume of business.34% worked on sharing of 60:40
and the rest were working on 50:50.
It was noticed in the study that no matter how high their sharing was, they were not satisfied
with it, and they wanted more than what they were getting.
6) If, on sharing basis than what is your sharing ratio?
a) 50:50 b) 60:40
b) 75:25
Out of those who worked on sharing basis, 43% worked on 75:25.This was the most profitable
sharing offered to franchisees by some companies when they generated good volume of
business.34% worked on sharing of 60:40 and the rest were working on 50:50.The most
unsatisfied were those who were working on 50:50 or 60:40.They complained that this was
reducing their income and hampering their growth.
It was also noticed in the study that no matter how high their sharing was, they were not
satisfied with it, and they wanted more than what they were getting.
7) What brokerage do you charge from the clients?
a) 1P:10P b) 2P:20P
c) 3P:30P d) Other
In the study, it was seen that maximum competition was in the brokerage rates only. Now the
clients work with those companies who charges less brokerage.60% of the franchisees were
charging brokerage as low as 1P:10P.Also 20% were charging brokerage of 2P:20P.Only 12%
of them were taking brokerage of 3P:30P. Rest 8% were those who were working on fixed
brokerage as Rs 800 per crores.
8) Where do you get support level from?
a) Head Office b)Branch Office
b) Both
It was found that 18% of the support level to the franchisees was given by Head Office
whereas 44% were served by Branch Office. Rest 38% were served by both head office and
branch office. Those who were served by both of them complained that the problems were not
solved immediately.30% of franchisees claimed that their problems were not solved
immediately and it took little time as their was a chain from Branch office to head office.
9) Are they able to solve your problems on immediate basis?
a) Yes b) No
70% of the franchisees claimed that their problems were immediately solved or took a minimal
time if the problem is big.
Rest 30% denied to the fact that the problem was solved at immediate basis. They complained
that their was no specific person who could listen to their problems. They had to sometime call
the local branch office initially and if they could not solve their problem, only then they will be
entertained at head office.
10)Do you feel the requirement of cheque punching facility?
a) Yes b) No
In case of provision of cheque punching facility,68% liked this facility as it made their work
easy and saved time which would otherwise be wasted to send those cheques to branch office
at first. This also enabled them to open trade limit of their clients in mere 10 minutes. Also this
facility is not provided by every company. Rest 32% didn’t feel the requirement of the same.
11)What is your Back-Office cost?
a) No Cost b) Less than Rs 1000
c) Rs 1000-2000 d) More than Rs 2000
In the study, it was found, that 64% of the franchisees didn’t incur any back-office cost.15% of
franchisees incurred cost less than Rs 1000.Only 21% of franchisee were paying back office
cost of more than Rs 1000 out of which 6% were paying more than Rs 2000.
12)Do you think it is reliable?
a) Yes b) No
Those who were paying these costs found it to be unreliable.72% people said that these costs
were unreliable.28% still found it reliable if some add-on facility is given to them.
13)Do you think client database would help you to grow business?
a) Yes b) No
b) Doesn’t matter
In the study, it was found that only 40% of the franchisees agreed to the fact that client database
can help them grow business.25% completely disagreed to this thing. According to the rest 35%
of the franchisees, client database would only help those people who are new to business and do
not have good client base. Those who are well established in this business do not require client
database.
14)Would you like to avail TIN/PAN FC?
a) Yes b) No
63% of the franchisees showed interest in having TIN/PAN FC. Rest 37% felt that TIN/PAN FC
would be an additional investment, would require more manpower and generates less income
as compared to investment. They even felt that the security deposit of Rs 100000 was very
high as compared to income derived from it.
15)Do you think TIN/PAN FC will help you in getting more clients?
a) Yes b)No
Despite of not interested to have TIN/PAN FC, they agreed to the fact that it can help in
getting more clients to trade with them. Those clients who come for getting their Pan Card can
easily be tapped to open their Demat Account. E-TDS facility along with it is a good option for
them.
16)After knowing services provided by Karvy, would you like to be associated with it?
a) Yes b) No
b) Will tell later
It was noticed while carrying out the study that few franchisees were interested in the plan
given by Karvy because of its Brand name and good facility. They were ready to open a
franchisee of Karvy at different location other than they were working presently but their were
few things which stopped them such as high security deposit, high back office cost, high
brokerage and less sharing.65% of franchisees refused as they found the plan costly.18%
showed interest in associating with Karvy. Rest 17% said that they would contact the company
later.While carrying this research work, their was one suggestion which was given to us by the
franchisees which needed to be amended in the plan seriously to make it a good plan enough
to attract franchisees. This one thing was to reduce the cost and increase the sharing. This is
highly required in the competitive market otherwise it would be difficult for Karvy to sustain in
the market.
Swot Analysis
Every company has certain strengths and weaknesses, no company can be perfect, if it is
giving good services then it has to be little costly otherwise it would run into loss. Similarly there
is opportunity and threats for every organisation. During our study covering whole aspect of
market and competitors, we did SWOT analysis for the company with respect to various factors
in market.
STRENGTH
Brand Name All financial needs under one roof.
Full fledge research units comprising of both fundamental and technical research.
Quality service provided to clients.
Weakness
Low advertisements High Cost structure
Opportunity
Potential Market for investors Tapping those people who are not satisfied with their existing business.
More aware people intending to invest in markets with right companies
Threat
Growing competition in this sector Decreasing Brokerage Rates
CONCLUSION:
After conducting the research work, and analyzing it carefully, it was seen that there are many
other broking firms besides Karvy which are giving good competition to the company. It was
also noticed that franchisees intend to switch easily provided they are offered with a profitable
plan. No franchisee was completely satisfied by its company and wanted certain additional
facilities. We came to certain conclusion after the study which is as follows:
1) There is tough competition in the market and hence the company needs to make flexible plan
rather than a fixed policy to sustain in the market and retain the existing clients.
2) It is easy to takeover franchisees who are not satisfied with their existing companies by giving
them a better option.
3) The brokerage rates charged by Karvy are high and it should be reduced if it wants more clients
to deal with it.
4) It was also noticed that few people still know Karvy as registrar and transfer agent and not aware
of its Equity business. The company needs to create awareness in the market for the same.
5) The plan of Karvy is good provided the cost is reduced according to what is prevailing in the
market. Few services like cheque punching facility, loan against Mutual funds, Marginal funding
is not provided by everyone in the market.
6) The provision of client database is a good option for those franchisees only who are new to the
business, rest all did not found this facility useful as they already had good network, though it can
be used to grow the business.
7) TIN/PAN FC is a good option and an additional business to earn income. Not all companies can
offer the same as authority lies with 4 companies only i.e. UTI, Shell, Alankrit and Karvy. This can
be add-on facility can be used to attract franchisees toward Karvy provided Equity Franchisee +
TIN/PAN FC is offered at a reasonable security deposit.
8) In the research work, it was found that company had different franchisee plans depending on the
business generated by their franchisees. Those who generated high volume were given good
facilities than the rest. Karvy’s policy is same for all type of franchisees.
Recommendation and Suggestions:
The company had a very good plan and intended to serve its franchisee in the best possible
manner but it had few shortcomings due to which the brokers didn’t showed interest in having
the Karvy franchisee despite of liking it. Also due to these few shortcomings Karvy failed to
achieve its target of activating new Franchisee in the Jaipur region. If these pitfalls are
removed,then the plan would work better and attract more franchisees as Karvy is a big brand.
1) The Brokerage charges, 3 paisa and 30 paisa for intraday and delivery respectively, are quiet
high. In the competitive market where brokerage is as less than 1P:10P,it is difficult to attract
investors to trade at 3P:30P.It should be reduced.
2) The security deposit of Rs 150000(Equity) and Rs100000 (commodity) was high as
compared to other plans in the market. It should be reduced to at least Rs 100000 for both
Equity and Commodity.
3) The percentage of sharing of brokerage which currently is:
Sub broker ship: 60:40(sub-broker: karvy)
Remissers : 40:60(remissers: karvy)
It should also be changed. During the market study, it was felt that the sharing of franchisees
was very low and lot of sub-brokers questioned on it and so it is suggested to increase their
sharing and make it to 70:30 for franchisees and 50:50 for remissers.
4) The back-office cost of Rs 2000 per month is not reliable and it should be completely finished
off.
APPENDIX
Questionnaire
Sub Broker
Address
Contact No E-mail
1) Which company are you currently associated with?
__________________________________________________
2) How long have you been associated with the current company?
b) 0-1 years b)1-2 years
c) 2-3years d) More than 3 years
3) Have you heard of Karvy?
b) Yes b) No
4) Would you like to know more about Karvy, especially, Karvy Fortune?
b) Yes b)No
5) Do you think that their should be appropriate distance between two franchisees of the same
company?
c) Yes b) No
d) Doesn’t matter
6) Do you work on fixed basis or sharing basis?
b) Fixed b) Sharing
7) If, on sharing basis than what is your sharing ratio?
c) 50:50 b) 60:40
d) 75:25
8) What brokerage do you charge from the clients?
b) 1P:10P b) 2P:20P
c) 3P:30P d) Other
9) Where do you get support level from?
c) Head Office b)Branch Office
d) Both
10)Are they able to solve your problems on immediate basis?
b) Yes b) No
11)Do you feel the requirement of cheque punching facility?
b) Yes b) No
12)What is your Back-Office cost?
b) No Cost b) Less than Rs 1000
c) Rs 1000-2000 d) More than Rs 2000
13)Do you think it is reliable?
b) Yes b) No
14)Do you think client database would help you to grow business?
c) Yes b) No
d) Doesn’t matter
15)Would you like to avail TIN/PAN FC?
b) Yes b) No
16)Do you think TIN/PAN FC will help you in getting more clients?
b) Yes b)No
17)After knowing services provided by Karvy, would you like to be associated with it?
c) Yes b) No
c) Will tell later
Recommendations:
_______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
BIBLIOGRAPHY
Websites:
www.karvy.com www.indiacorporateadvisor.com www.themanagementor.com www.nsdl.co.in www.wikipedia.com www.sharekhan.com www.bonanzaonline.com www.kotaksecurities.com www.rathionline.com www.indiainfoline.com www.angelbroking.com www.nirmalbang.com www.reliancemoney.com www.religare.in www.uniconindia.in www.nseindia.com www.amfiindia.com www.researchandmarkets.com www.indiamba.com www.ibef.org www.entrepreneur.com www.franchisemoneymaker.com www.franchize.info
Books and magazines:
The franchising World Karvy- The Finapolis Karvy-Bazaar Baatein Times of India Economic times
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