Professional Documents
Culture Documents
ON
PERFERENCE OF THE ADVISORS TOWARDS
MUTUAL FUND
AT
KARVY SECURITIES LTD., JAMNAGAR
SUBMITED BY
Badiyani Amit
(MBA – IV SEM.)
ACEDAMIC YEAR
2007-09
SUBMITTED TO
SHRI JAYSUKHLAL VADHAR INSTITUTE OF
MANAGEMENT STUDIES
JAMNAGAR.
AFFILIATED TO
SAURASHTRA UNIVERSITY
RAJKOT.
EXECUTIVE SUMMARY
It has been perceived that there is huge potential market in the region
of Saurashtra. Thus an exploratory research with the hypothesis “The
region of Saurashtra being progressively industrializing & developing
should provide a large & wider market share for Mutual Fund” has been
done.
Thus the purpose of this research was to find why people do not
actively invest in mutual fund in spite of various benefits like
Professional management, Diversification, Convenience liquidity,
Flexibility, Tax benefits etc. as well as to find out potential of business
of KARVY in distribution of Mutual Fund in Jamnagar City.
People from service class prefers safety of income plus the regular
income as well as tax benefits while on the other hand Professional and
Businessman focus on high return with some risk.
Today, company has 230 branch offices in 164 cities all over the India.
The company adds 5 new offices every month to the company’s ever
growing national network in every nook and corner of the country. The
company service over 16 million individual investors, 180 corporate and
handle corporate disbursements that exceed Rs.2500 Crores.
Board of Directors
Parthasarathy C
Yugandhar M
Ramakrishna M S
Prasad V Potluri
Robert Gibson
Sanjay Kumar Dhir
R Shyamsunder
Parthasarathy C
Yugandhar M
Ramakrishna M S
Parthasarathy C
Yugandhar M
Ramakrishna M S
Ajay Kumar K
William Samuel
Nicholas Tully
Parthasarathy C
Yugandhar M
Ramakrishna M S
Ajay Kumar K
Kutumba Rao V
William Samuel
Nicholas Tully
Vision of Karvy
Company’s vision is crystal clear and mind frame very directed. “To be
pioneering financial services company. And continue to grow at a
healthy pace, year after year, decade after decade.” Company’s
foray into IT-enabled services and internet business has provided an
opportunity to explore new frontiers and business solutions. To build a
corporate that sets benchmarks for others to follow.
RELATIONSHIPS
OUR COMPETITIVE ADVANTAGE
Every year with this picture keeping in mind ‘Karvy accelerate with
Recovery, Revival and Reappearance.’
Karvy has started 2004 on a strong note with the realization to signal
some of the challenges it faced previous year. In a competitive market
and a branded business, Karvy need to carefully manage itself to avoid
down trading or brand shifts by consumers.
For Karvy, Jamnagar branch 2003 was truly exhilarating because of:
This has been possible with deep insight of consumer behavior as well
as market demand drivers, understanding of the arena where to
operate and quality execution – all thanks to a ‘greater team’ that
makes this happen.
Integrity
Responsibility
Reliability
Unity
Understanding
Excellence
Confidentiality
1. Stock broking
2. Demat services
3. Investment product distribution
4. Investment advisory services
5. Corporate finance & Merchant banking
6. Insurance
7. Mutual fund services
8. IT enabled services
9. Registrars & Transfer agents
10. Loans
1. Stock Broking:
2. Demat Services:
Since Karvy is also in the broking business, investors who use Karvy’s
depository services get a dual benefit. They can use Karvy’s brokerage
services to execute transactions and Karvy’s depository services to
settle them.
PUBLIC SECTOR
Sl. No. Company Name
1 HUDCO
2 Sardar Sarovar Narmada Nigam Ltd.
3 Tamilnadu Power Finance Corporation Ltd.
4 NTPC
MANUFACTURING COMPANIES
Sl. No. Company Name
1 A P Paper Mills Ltd.
2 Amtek India Ltd.
3 Atul Ltd.
4 Ballarpur Industries Ltd.
5 Chambal Fertilizers & Chemicals Ltd.
6 Escort Ltd.
7 Greaves Ltd.
8 Gujarat Alkalies & Chemicals Ltd.
9 Indian Express
10 Ind-Swift Ltd.
11 JK Industries Ltd.
12 Jindal Steel & Power Ltd.
13 Sound Craft Industries Ltd.
14 Supreme Industries Ltd.
Shri Jaysukhlal Vadhar Institute of Management Studies, Jamnagar 15
15 Zuari Industries Ltd.
(b). Bonds:
(c). IPO:
•Issue management
•Instrument designing
•Pricing of the issue
•Registration process for the issue of shares
•Marketing efforts
•Final allotment to investors
•Listing details on stock exchanges
•Loan syndication
•Lease financing
•Corporate advisory services
•Underwriting
6. Insurance:
With Mutual Funds emerging as a distinct asset class, Karvy has made a
strategic choice to leverage the power of latest technology to provide
a cutting edge to its services. Karvy, today, service nearly 80% of the
asset management companies (AMCs) across an extensive network of
service centers with assets under service in excess of Rs.10,000
crores.
Going forward, Karvy shall strive to create new products and services,
which would address the needs of the end customer. Company’s single
minded focus in delivering products for customers has given it the
distinguished position of being the preferred provider of financial
services in the country.
Shri Jaysukhlal Vadhar Institute of Management Studies, Jamnagar 18
List of Mutual Fund Clients of KARVY:
Karvy has been started this service since March, 2004. Karvy is work
as TIN Facilitation Centre it provides following IT enabled services.
TIN Overview
While NSDL will be the primary agency responsible for the design,
implementation and maintenance of TIN as per the requirements of
ITD, other agencies will also play key roles in the TIN system.
The banking system, being the agency that collects the money on
behalf of the ITD against tax obligations from the tax payers will be
linked to the TIN central system to provide accounting information on
tax paid by various entities under various heads. As banks are
relatively technology-enabled entities, they will directly be linked
electronically to the TIN central system enabling online tax accounting.
On the other hand, the entities depositing the tax (deductors) vary
substantially with respect to their computer skills and hence TIN
design provides for TIN Facilitation Centers managed by NSDL to help
digitization and upload of tax payment related information to the TIN
central system.
•Overall Excellence.
•Handling of Volumes
•Timely Dispatch
•Quality Management and Technological Up gradation.
10. Loan:
•Vehicle Loan
•Home Loan
•Personal Loan
Market Positioning:
So, Karvy focus on the consumers who prefer almost all investment
activities at same place by providing number of various financial
services. At Karvy a person can purchase or sell shares, debentures
etc. and at the same place also demat it. Karvy also provides other
investment option to the same person at same place like Mutual Fund,
Insurance, Fixed Deposit, and Bonds etc. and help the person in
designing his portfolio. By this way Karvy provides comfort to its
customers.
Target Market:
Karvy also publish its weekly Stock Market Newsletter ‘Karvy Bazaar
Baatein’ and monthly magazine ‘The Finapolis’ to guide investors and
sub-brokers about market.
The regional manager has authority to select lower level employee like
peon, marketing executives, accountant etc. by approval of zonal
manager.
New employee has given training under experienced employee. The new
employee work under experience employee and observe his all
activities. When company employs new technology or there is any
change in the working of company the training program is arranged.
Karvy’s employees are highly empowered. They don’t have to report any
person of the same branch but they report upper level branch. E.e.
Marketing executive of Jamnagar branch directly reports Senior
Marketing executive of Baroda zonal office.
If particular branch earn certain profit then Karvy gives them special
incentives. E.g. last year Karvy had arranged two days tour of Div for
their employees of Rajkot, Jamnagar, Junagadh and Bhavnagar branch
which was totally free of cost. This also helps in maintaining co-
operation between employees.
CM & MD
(Hyderabad)
GM GM GM
(Marketing) (Finance) (HRM)
Zonal Manager
(Baroda)
Regional Manager
(Rajkot)
Executives
Branch Manager
Marketing Clerk
Executives-3
Executive
(Demat) Accountant
Peon Peon
•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.
account holders
Strengths:
Weaknesses:
Opportunity:
•Growth rate of mutual fund industry is 40 to 50% during last year and
it expected that this rate will be maintained in future also.
•Marketing at rural and semi-urban areas.
Threats:
•Rajkot
•Jamnagar
•Junagadh
•Bhavnagar
The mutual fund industry in India started in 1963 with the formation
of Unit Trust of India, at the initiative of the Government of India and
Reserve Bank the. The history of mutual funds in India can be broadly
divided into four distinct phases
FirstPhase-1964-87
Unit Trust of India (UTI) was established on 1963 by an Act of
Parliament. It was set up by the Reserve Bank of India and functioned
under the Regulatory and administrative control of the Reserve Bank of
India. In 1978 UTI was de-linked from the RBI and the Industrial
Development Bank of India (IDBI) took over the regulatory and
administrative control in place of RBI. The first scheme launched by
UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700
crores of assets under management.
160000
154018
140000
100000
80000 79464
60000
47000
40000
20000
4564
0 25
Mar-65 Mar-87 Mar-93 Jan-03 Mar-03 Sep-03 May-04
Years
There are many entities involved and the diagram below illustrates the
organizational set up of a mutual fund:
ELSS
Income
Market
Gilt
Growth
Money
Balanced
Fund Type
40% 38%
35%
30%
25%
21%
20% 19%
17%
15%
10%
5%
5%
0%
Bank
Joint-I
Joint-F
Private
Institutions
Fund Type
Ministry of Finance
1. Bajaj Capital
Services provided
•Merchant banking
•Buying and Selling of Money Market Investments
•Distribution of financial products
•Investment Advisory Service
2.MCS Ltd.
Volumes Handled
Services Offered:
•Rajkot
•Jamnagar
•Bhavnagar
•Merchant Banking
•Demat Service
•Stock Broking
5. HDFC
•Demat Service
•Life Insurance
•Banking Service
•Housing Finance
•Vehicle Finance
•Education Loan
•Personal Loan
•Mutual Fund
Kotak Securities is a corporate member of both the BSE and the NSE.
It is also a depository participant with the National Securities
Depository Limited (NSDL) for trading and settlement of
dematerialized shares.
•Stock Broking
•Financial Product Distribution
•Demat Services
•Investment Advisory Services
Motilal Oswal is member of NSDL and CDSIL for DP. It has wide
network of branches. It has 158 branches all over India.
Services Offered:
•Demat Services
•Stock Broking
•Investment Advisory Service
Mutual funds serve as a link between the saving people and the capital
market in that they mobilize saving from investors and bring them to
borrowers in the capital markets. In short, it is a common pool of
money into which investors place their contribution that is to be
invested in accordance with a stated objective.
A mutual fund uses the money collected from the investors to buy
those assets, which are specially permitted by its stated investment
objective. When an investor subscribes to a mutual fund, he/she buys a
part of asset or the pool of funds that are outstanding at that time.
1. Sponsor
2. Board of Trusties
3. Asset Management Company
4. Custodian and Depositories
5. Distributors
1. Sponsor:
•The sponsor must contribute at least 40% of the net worth of the
AMC.
•The sponsor must posses a sound financial track record over 5 years
prior to registration.
•The trustees appoint the AMC and custodian with the prior approval
of SEBI.
•They also approve all the schemes floated by the AMC.
•They have right to dismiss the AMC, with the approval of SEBI.
•Half of the trustees should be independent persons. Neither the
AMC, nor its employees can act as trustee.
•A trustee can not be appointed as a trustee of two or more mutual
funds until and unless he is an independent person or has permission from the
Mutual Fund where he is trustee.
•Trustees can be removed only by prior approval of SEBI.
•The AMC of a Mutual Fund must have a net worth of at least Rs. 10
crore at all time.
•The AMC can not act as a trustee of any other Mutual Fund.
•They will float schemes only after obtaining the prior approval of the
Trustees and SEBI.
•The director of AMC should be a person of reputed of high standing
and at least have five years experience in relevant field.
•AMC can be terminated with 75% unit holders or majority of trustees.
As per SEBI Regulations Mutual Funds shall have a custodian who is not
any way associated with the AMC. It carry outs the activity of safe
keeping the securities or participating, in any clearing system. The
custodian should be independent from sponsors and AMC and should
have a sound track record and adequate relevant experience.
5. Distributors:
For a fund to sell units across a wide retail base of individual investors,
an established network of distribution agents is essential. AMCs usually
appoint Distributors or Brokers, who sell units on behalf of the fund. A
broker usually acts on behalf of several mutual funds simultaneously
and may have several sub-brokers under him for the purpose of
distribution of units.
Worldwide, the mutual fund has a long and successful history. The
popularity of mutual fund has increased manifold. In developed
financial market, like US mutual funds have almost overtaken bank
deposits and total assets of over US $ 3 trillion.
Advantages:
1. Portfolio Diversification:
Each investor in a fund is a part owner of all the funds assets, thus
enabling investor to hold a diversified investment portfolio even with a
small amount of investment, which would otherwise require big capital.
2. Professional Management:
3. Diversification:
5. Liquidity:
7. Tax Benefits:
The investors are totally exempt from paying any tax on the income
they receive from the Mutual Funds.
Investment up to 10000 in ELSS qualifies for tax rebate of 20%.
8. Regulatory oversight:
Mutual funds are subject to many government regulations that protect
investors from fraud.
9. Convenience:
You can usually buy mutual fund shares by mail, phone, or over the
Internet.
10.Well regulated
Limitations:
Investors who invest on their own can build their own portfolios of
shares and bonds and other securities. Investing through fund means
he/she delegates this decision to the fund managers.
When large bodies like a fund invest in shares, the concentrated buying
or selling often result in adverse price movements i.e. at the time of
buying, fund has to pay high and vise-versa.
5. No Guarantees:
From above cycle, it can be observed clearly that how the money from
the investors flow and they get returns out of it. With a very small
amount of fund, investors pool their money with fund managers.
After studying the market, the fund manager invests money of the
investors in various securities like shares, bonds, debentures,
government securities etc. to achieve goal of the investors.
With ups and downs in the market returns are generated and they are
passed on to the investors in form of dividend or capital gain or lost.
The above cycle is very clear and also very effective.
By Objective
By Duration
By Load
Other Fund
The major strength of money market funds are the liquidity and safety
of principal that the investors can normally expect from short term
investments.
The leading examples are
These funds are sort of government funds wherein the investments are
made in debt instrument of government, which carry no risk of non
payment of interest as the RBI manages the payment of interest and
2. By Duration:
A close ended fund has a stipulated maturity period e.g. 5-7 years. The
fund is open for subscription only during a specified period at the time
of launch of the scheme. Investors can invest in the scheme at the
time of initial public issue and thereafter they can buy or sell units on
stock exchange where the units are listed at NAV. These mutual fund
schemes disclose NAV generally on weekly basis.
Risk
Benefits offered
Tolerance/Return Focus Suitable Products
by MFs
Expected
Bank/ Company FD, Liquidity, Better
Low Debt
Debt based Funds Post-Tax returns
Balanced Funds, Some
Partially Liquidity, Better
Diversified Equity
Debt, Post-Tax returns,
Medium Funds and some debt
Partially Better Management,
Funds, Mix of shares
Equity Diversification
and Fixed Deposits
Diversification,
Capital Market, Equity
Expertise in stock
High Equity Funds (Diversified as
picking, Liquidity,
well as Sector)
Tax free dividends
3. By Load:
The load amount charged to the scheme over a period of time is called
a deferred load.
Funds that don’t charge entry, exit, or deferred load or any other
charges for sales expenses are called no load funds.
•Now, generally all Mutual Fund companies charge 2 to 2.5% entry load
on equity fund.
•There is 0.25 to 1% exit load on gilt and income fund if investors exit
from fund before specified time which is generally 3 to 6 months.
These are the funds which invest in the securities of only those
sectors or industries as specified in the offer documents. E.g.
Pharmaceuticals, Software, Petroleum etc. These types of funds are
more risky compared to diversified funds.
Birla IT Fund,
Pru. ICICI FMCG Fund,
Franklin India Pharma Fund etc.
Primary Objective:
Secondary Objectives:
1.Research Design:
2. Unit of Analysis:
Characteristics of interest:
a. Primary Source:
b. Secondary Source:
4. Sample Planning:
Sampling Design:
Questionnaire Plan
Type of Questions:
Shares
Mutual Fund
Insurance
FD
Tax Bond
PPF
Returns
Risk
Safety
Tax Benefite
Others
15 15
12
No. of Advisors
10
8
6
5 5
4
0
<100 100-300300-500500-750 750- >1000
1000
No. of Clients
ELSS
PPF
Pension
NSC
Bond
Plan
Investment Options
60%
60%
50%
40% 40%
30%
20%
10%
0%
Interested Not
Interested
60%
40%
20%
10%
0%
Know Don't KNOW
70% 66%
60%
50%
40% 34%
30%
20%
10%
0%
Interested Not
Interested
75% 70%
60%
45%
30% 24%
15%
6%
0%
No Time Not Answered Not Interested
40%
30%
20%
10%
Interested Not Inteested
60%
52%
50%
40%
30%
22%
20%
11%
10% 5%
0%
Not No time Lack of Don't want to
Answered Knowledge expand
services
•The awareness level about Mutual Funds is quite low in the Jamnagar
City among advisors.
•Data Analysis and interpretation done may not be that strong due to
small sample and ‘Convenience Sampling Method’.
•Mutual Funds have given a new direction to the flow of personal saving
and enable small and medium investors in remote rural and semi urban areas to reap
the benefits of the stock market investment. Indian Mutual Funds are thus playing
a very important developmental role in allocation of scares resources in the
emerging economy.
•Company should also provide knowledge about the growth rate and the
expected growth rate of Mutual Fund industry in India.
•Most of people aware of life insurance, NSC and PPF for tax saving so,
company should market various tax saving schemes of Mutual Funds and their
benefits.
•The interface among the investors and the Mutual Fund Companies is
the agents, so the agents should have proper knowledge about Mutual Funds as well
as market so that they can help investors in their investment decisions. The
quality of agents performance and investors trust on them can be improved only if
they are permanent in nature.
QUESTIONNAIRE
We assure you that all the information that will be collected from you
will remain fully confidential and it is used for study purpose only.
Returns Risk
Safety Tax Benefits
Timely Brokerage
Other
Insurance
Pension Plan
PPF
Infrastructure Bond
ELLS Scheme
Other _______________________________________
7. Are you interested to deal in MF?
Shri Jaysukhlal Vadhar Institute of Management Studies, Jamnagar 75
Yes
No
If No Why?
Yes
No
Yes
No
If No Why?
10. Will you like to work with Karvy Securities Ltd for dealing in
mutual fund?
Yes
No
If No Why?
11. Name :
Address :
Thank You
Loan syndication
Portfolio
NAV
Net Asset Value is the current market worth of the mutual fund
shares. It is calculated daily by taking the funds total asset securities,
cash and any accrued earning deducting liabilities, and dividing the
reminder by the number of shares outstanding.
Capital gain
IPO
Tables:
1. www.mutualfundsindia.com
2. www.amfiindia.com
3. www.themanagementor.com
4. www.dewb-vc.com
5. www.karvy.com
6. www.indiacorporateadvisor.com
7. www.nsdl.co.in
8. www.incometaxdelhi.nic.in
9. www.incometaxindia.gov.in
10. David J. Luck & Ronald S. Rubin, “Marketing Research”,
Ed. – 7 (ISBN)
11. D.C.Anjaria & Dhaivat Anjaria, “AMFI Workbook”, Ed. – 2
(Association of Mutual Funds in India)