A Summer Internship Project Report on

STUDY ON PORTFOLIO MANAGEMENT SERVICES STRATEGIES AND INVESTORS AWARENESS AND PREFRENCE FOR IT

Submitted in partial fulfillment of the requirements for the degree of Post Graduate Diploma in Management (Marketing) By

NIPUN.M.TRIWADI
(Roll No.C2-56) Under the guidance of

ABHIJEET GOUTRI
A Study Conducted for MOTILAL OSWAL SECURITIES LTD.

At Indira School of Business Studies, Tathawade, Pune 411033

(2010-12)

Acknowledgement
Words express everythingS Mouth Co-ordinates, When it comes to gratitude, Heart comes to play

Every project is a masterpiece of hard work and sincere efforts of all those who are Involved in the project. Hard work and success are the two sides of the same coin. I am grateful to all of them who were a part of my hard work and would definitely be an inevitable part of my success. I am grateful to my respected internal guide Mr. Abhijeet Goutri (Indira School of business studies,pune) as well as external guide Mr. Viraj shah and Mr. Manish Gathani (Motilal oswal securities Ltd. Pune) for guiding and inspiring me and taking me through my tough times. They played an important role in the successful completion of my project. As I conclude, I would like to state that just as a positive attitude pays off; my hard efforts to bring this project to a successful end would also pay off. I hope that this project would be one of the most significant stepping-stones of my career and would fulfill my aspirations in every aspect.

Mr. Nipun Triwadi

Indira school of business studies,Pune

INTRODUCTION TO PMS

In today's complex financial environment, investors have unique needs which are derived from their risk appetite and financial goals. But regardless of this, every investor seeks to maximize his returns on investments without capital erosion. While there are many investment avenues such as fixed deposits, income funds, bonds, equities etc

It is a proven fact that Equities as an asset class typically tend to outperform all other asset classes overthe long run. Investing in equities, require knowledge, time and a right mind-set. Equity as an asset class also requires constant monitoring may not be possible for you to give the necessary time, given your other commitments. We recognize this, and manage your investments professionally to achieve specific investment objectives and not to forget, relieving you from the day to day hassles which investment require.

Motilal Oswal Securities Ltd brings with more than 2 decades of experience & expertise in equity research and stock broking. We are one of the leading portfolio service providers, with asset under management worth Rs. 590 Crores. When you invest through our PMS, you can be assured of the best research being used for the investment decisions. Our equity research has been consistently ranked very highly in surveys conducted by leading international publications like Asia Money and Institutional Investor.

Executive Summary

It is well evident that work experience is an indispensable part of every professional course. In the same manner practical training is must for each and every individual who is undergoing management course. Without the practical exposure one cannot consider himself or herself as a qualified capable manager. During the project period student can learn through his own experience, the real situation of market and corporate world and to put his theoretical knowledge into practice. Hence to fulfill the requirement, I have completed my Two Months Internship in Motilal Oswal Securities Ltd. on the topic , STUDY ON PORTFOLIO MANAGEMENT SERVICES STRATEGIES AND INVESTORS AWARENESS AND PREFRENCE FOR IT

Being new to the Stock Market, I was engrossed fully into the sector where I was told to understand the basics of stock market, the effect of recession on this sector, I was told to educate various sub brokers operating in Pune about the benefits of the Products being offered by Motilal Oswal, and how this opportunity can profit both the parties. I also did a survey for extracting information from brokers, which would be helpful for the company to find out awareness and preference of Portfolio management services.

I was told to make calls and generate the franchisees for the company. Some time I have to extract the information from my sources because no one is theyre waiting for you its actually you, which have to make things happen in your favor. So I read articles brochures pamphlets in my free time there. Every day have its own experience and a short-term goal. So I adopted the line that let the dreams of today determine the opportunities of tomorrow and I inculcated the same positive attitude in to me so that I would work there effectively and efficiently.

OVERVIEW OF INDUSTRY
1.1 Broking Industry Insight
The equity brokerage industry in India is one of the oldest in the Asia region. India had an active stock market for about 150 years that played a significant role in developing risk markets as also promoting enterprise and supporting the growth of industry. The working of stock exchanges in India started in 1875. BSE is the oldest stock market in India. The history of Indian stock trading starts with 318 persons taking membership in Native Share and Stock Brokers Association, which we now know by the name Bombay Stock Exchange or BSE in short. In 1965, BSE got permanent recognition from the Government of India. National Stock Exchange comes second tom BSE in terms of popular.

Stock trading is a big business in any way and in any standards. With daily volumes of Rs1200015000 crore (on the BSE and NSE) in the cash segment and a volume of about Rs 30,000 35,000 crore in the derivative market, the size of the industry is around Rs 5,000 crore per annum in terms of broking revenues. Meanwhile the trading business too is booming. BSE and NSE represent themselves as synonyms of Indian stock market. The history of Indian stock market is almost the same as the history of BSE. The current "stock market" is comprised of 300,000 computers situated on pro trader's desks. These computers are networked together using sophisticated protocols. This level of information sharing makes pricing an almost exact science.

These 300,000 computers are further linked to another 26 million computers worldwide. These computers are located in banks, small businesses, and large corporations. These computers comprise the banking networks, which make computerized transactions possible. Finally, these computers are connected to another 300 million+ computers, which connect and disconnect from the financial markets daily. In New York City alone, these transactions amount to over $2.2 trillion dollars daily. Sensex crossed the 5000 mark in 1999 and the 6000 mark in 2000. The 7000 mark was crossed in June and the 8000 mark on September 8 in 2005 and by 2007 It has already seen mark 14500. Many foreign institutional investors (FII) are investing in India. The liberal economic policies pursued by successive Governments attracted foreign institutional investors to a large scale. The unpredictable behavior of the market gave it a tag a volatile market.India, after United States hosts the largest number of listed companies. Global investors now ardently seek India as their preferred location for investment.

 Beginning of a New Equity Culture

A new phase in the Indian stock markets began in the 1970s, with the introduction of Foreign Exchange Regulation Act (FERA) that led to divestment of foreign equity by the multinational companies, which created a surge in retail investing. The early 1980s witnessed another surge in stock markets when major companies such as Reliance accessed equity markets for resource mobilisation that evinced huge interest from retail investors. A new set of economic and financial sector reforms that began in the early 1990s gave further impetus to the growth of the stock markets in India. As a part of the reform process, it became imperative to strengthen the role of the capital markets that could play an important role in efficient mobilization and allocation of financial resources to the real economy. Towards this end, several measures were taken to streamline the processes and systems including setting up an efficient market infrastructure to enable Indian finance to grow further and mature. The importance of an efficient micro market infrastructure came into focus following the incidence of market abuses in securities and banking markets in 1991 and 2001 that led to extensive investigations by two respective Joint Parliamentary Committees. The Securities and Exchange Board of India (SEBI), which was set up in 1988 as an administrative arrangement, was given statutory powers with the enactment of the SEBI Act, 1992. The broad objectives of the SEBI include to protect the interests of the investors in securities to promote the development of securities markets and to regulate the securities markets The scope and functioning of the SEBI has greatly expanded with the rapid growth of securities markets in India in the last fifteen years. Following the recommendations of the High Powered Study Group on Establishment of New Stock Exchanges, the National Stock Exchange of India (NSE) was promoted by financial institutions with an aim to provide access to investors all over the country. NSE was incorporated in Nov 1992 as a tax paying company, the first of such stock exchanges in India, since stock exchanges earlier were trusts, being run on no-profit basis. NSE was recognized as a stock exchange under the Securities Contracts (Regulations) Act 1956 in Apr 1993. It commenced operations in wholesale debt segment in Jun 1994 and capital market segment (equities) in Nov 1994. The setting up of the National Stock Exchange brought to Indian capital markets several innovations and modern practices and procedures such as nationwide trading network, electronic trading, greater transparency in price discovery and process driven operations that had significant bearing on further growth of the stock markets in India.

Faster and efficient securities settlement system is an important ingredient of a successful stock market. To speed the securities settlement process, The Depositories Act 1996 was passed that allowed for dematerialization (and re-materialization) of securities in depositories and the transfer of securities through electronic book entry. The National Securities Depository Limited (NSDL) set up by leading financial institutions, commenced operations in Oct 1996. Regulations governing selection of various types of market intermediaries as depository participations were made. Subsequently, Central Depository Services (India) Limited promoted by Bombay Stock Exchange and other financial institutions came into being.

Rapid Growth
The last decade has been exceptionally good for the stock markets in India. In the back of wide ranging reforms in regulation and market practice as also the growing participation of foreign institutional investment, stock markets in India have showed phenomenal growth in the early 1990s. The stock market capitalization in mid-2007 is nearly the same size as that of the gross domestic product as compared to about 25 percent of the latter in the early 2000s. Investor base continued to grow from domestic and international markets. The value of share trading witnessed a sharp jump too. Foreign institutional investment in Indian stock markets showed continuous rise reaching about USD10 bn in each of these years between FY04 to FY06. Stock markets became intensely technology and process driven, giving little scope for manual intervention that has been the source of market abuse in the past. Electronic trading, digital certification, straight through processing, electronic contract notes, online broking have emerged as major trends in technology. Risk management became robust reducing the recurrence of payment defaults. Product expansion took place in a speedy manner. Indian equity markets now offer, in addition to trading in equities, opportunities in trading of derivatives in futures and options in index and stocks. ETFs are showing gradual growth. Within five years of introduction of derivatives, Indian stock markets now are ranked first in stock futures and fourth in index futures. Indian stock markets are transaction intensive and thus rank among the top five markets in this regard. Stock exchange reforms brought in professional management separating conflicts of interest between brokers as owners of the exchanges and traders/dealers. The demutualization and corporatization of all stock exchanges is nearing completion and the boards of the stock exchanges now have majority of independent directors. Foreign institutions took stake in Indias two leading domestic stock exchanges. While NYSE Group led consortium took stake in the National Stock Exchange, Deutsche Borse and Singapore Stock Exchange bought equity in the Bombay Stock Exchange Ltd.

1.2 Major Developments in Equity Brokerage Industry in India

i) Corporate memberships
There is a growing surge of corporate memberships (92% in NSE and 75% in BSE), and the scope of functioning of the brokerage firms has transformed from that of being a family run business to that of professional organized function that lays greater emphasis on observance of market principles and best practices. With proliferation of new markets and products, corporate nature of the memberships is enabling broking firms to expand the realm of their operations into other exchanges as also other product offerings.

ii) Wider product offerings

The product offerings of brokerage firms today go much beyond the traditional trading of equities. A typical brokerage firm today offers trading in equities and derivatives, most probably commodities futures, exchange traded funds, distributes mutual funds and insurance and also offers personal loans for housing, consumptions and other related loans, offers portfolio management services, and some even go to the extent of creating niche services such as a brokerage firm offering art advisory services.

iii) Greater reliance on research

Client advising in India has graduated from personal insights, market tips to becoming extensively research oriented and governed by fundamentals and technical factors. Vast progress has been made in developing company research and refining methods in technical and fundamental analysis. The research and advice are made online giving ready and real time access to market research for investors and clients, thus making research important brand equity for the brokerage firms.

iv) Accessing equity capital markets

Access to reliable financial resources has been one of the major constraints faced by the equity brokerage industry in India since long. Since the banking system is not fully integrated with the securities markets, brokerage firms face limitations in raising financial resources for business and expansion. With buoyancy of the stock markets and the rising prospects of several wellorganized broking firms, important opportunity to access capital markets for resource mobilization has become available. The recent past witnessed several leading brokerage firms accessing capital markets for financial resources with success.

v) Foreign collaborations and joint ventures

The way the brokerage industry is run and the manner in which several of them pursued growth and development attracted foreign financial institutions and investment banks to buy stakes in domestic brokerage firms, paving the way for stronger brokerage entities and possible scope for consolidation in the future. Foreign firms picked up stake in some of the leading brokerage firms, which might lead to creating of greater interest in investing in brokerage firms by entities in India and abroad.

vi) Specialized services/niche broking

While supermarkets approach are adopted in general by broking firms, there are some which are creating niche services that attract a particular client group such as day traders, arbitrage trading, investing in small cap stocks etc, and providing complete range of research and other support to back up this function.

vii) Online broking

Several brokers are extending benefits of online trading through creation of separate windows. Some others have dedicated online broking portals. Emergence of online broking enabled reduction in transaction costs and costs of trading. Keen competition has emerged in online broking services, with some of these offering trading services at the cost of a few basis points or costs, which are fixed in nature irrespective of the volume of trading conducted. A wide range of incentives is being created and offered by online brokerage firms to attract larger number of clients.

viii) Compliance oriented

With stringent regulatory norms in operation, broking industry is giving greater emphasis on regulatory compliance and observance of market principles and codes of conduct. Many brokerage firms are investing time, money and resources to create efficient and effective compliance and reporting systems that will help them in avoiding costly mistakes and possible market abuses.

ix) Focus on training and skill sets

Brokerage firms are giving importance and significance to aspects such as training on skill sets that could prove to be beneficial in the long run. With the nature of markets and products becoming more complex, it becomes imperative for the broking firms to keep their staff continuously updated with latest development in practices and procedures.

1.3 Growth Driver of Equity market

The major growth drivers for brokerage revenue and trading volume are:-

Continuous fall in brokerage fees: This is happening due more and more interest of people in broking and huge competition in the market. Many Broking houses are reducing their brokerage in order increase the volumes of trading/jobbing intra-day and gross. Resulting in a compensation for the reduced fees. The client gets an advantage and wishes for more and more intraday sell and purchases. Theres a limit on the same as 8-10 times depending upon the broking house and the reputation of the client in the market.

Adoption of technology: Earlier most of broking houses used simple connection to connect to the BSE/NSE or the Main Broker. But, these days many have started using V-SAT technology which is highly advanced, secure and fast.

Centralized operations: The Back office is no more a setup in broking houses its all webbased having its roots at the registered office of the firm. This helps in reducing the deviations from the set guidelines and results in fast and secure transactions. Hence, more control, equality and effectiveness are observed even in the remotest franchisee of the firm.

1.4 Market Analysis of Broking Business

Buyer Power

Lack of Expertise Curtails Bargaining Power Knowledge of the industry in which one is working is very important without knowledge one cannot even think of growing in the market. Knowledge is the only thing in this which cannot be Sold, purchased or stolen it can only be gained by experience, studying or through a seniors advice. Retail investors often lack the knowledge and expertise in the financial sector that calls them to approach the broking houses, which have complete a research reports and market updates in order to guide the investor decision and to create wealth.

Low Product Differentiation Proves Beneficial The retail broking services provided by the various companies are homogeneous with very low product differentiation. This allows customers to enjoy a greater bargaining power. The only difference widely observed is either the Brand of the broking or the support which he provides apart from usual share trading.

Intensity of Competition
Move towards consolidation Lot of brokerage companies is moving towards consolidation with the smaller ones becoming either franchisees for the larger brokers or closing operations.

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail brokerage industry. This can be taken as positive note from the view of the whole industry, since it is growing so more and more people are willing to be a part of it as well as a negative note from the view of broking houses, since it will increase competition in the market. Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumers growing preference for internet as compared to approaching the brokers. Threat of New Entrants Entry of Foreign Players New forms of trading including T+2 settlement system, dematerialization etc are strengthening the retail brokerage market and attracting foreign companies to enter the Indian industry. Threat of Substitutes Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices etc act as substitutes to retail broking products and service

1.5 Major Players in the Industry

ICICI Securities Ltd. (www.icicidirect.com) Kotak Securities Ltd. (www.kotaksecurities.com) India bulls Financial Services Limited (www.indiabulls.com) India Info line (www.5paisa.com) IL&FS invest mart Limited (www.investsmartindia.com) SSKI Ltd. (www.sharekhan.com) Fortis Securities (Religare) (www.fortissecurities.com)s Karvy (www.karvy.com) HDFC Securities (www.hdfcsec.com) Motilal Oswal Securities (www.motilaloswal.com)

INTRODUCTION TO THE PROJECT

Being a reputed company in the business it is of utmost importance for Motilal Oswal to be aware of what is going on in the market, what is expected of them and how are they performing and do they need any improvements. So, to cover all these areas a detailed analysis of all this aspects has been done. The project revolves around the whole financial market business. Through this project, an effort towards understanding and throwing more light on every aspect related to the business has been undertaken. It will surely help Motilal Oswal in getting a detailed insight into the business and developing marketing strategy in such a way that most can be reaped from the market of franchisee integration. Not only that, it was tried to give the business a new dimension in terms of approaching the sub-broker to generate leads which may in turn help in getting larger market share. The project had two market research parts Market survey of the prospective sub-brokers Investors Awareness of Portfolio Management System Besides that the marketing strategies used by other companies in same business was studied and suggestions were drawn to develop an effective strategy.

2.1The Need for This Project

No study has been done on this business so far So far no study has been done regarding this business in Pune, so a detailed study of the market is required to understand it properly.

Lack of understanding of the need of the business houses Since no segmentation study has been done the specific needs of different companies are not known.

Focus the existing marketing team at right market The lack of understanding of the market wastes a lot of effort of the sales team. The business is generated through cold calls right now. But if there was a proper understand the requirement of each type of market segment the sales team may pitch in right mix of products to the right prospective clients.

Lot of small players cropping up It always creates a problem when the market starts getting congested. Same is the case with the market of financial business. Through this project I have tried to develop a structured view of the market which will not only help in understand the whole market but also help in targeting the marketing force at the right places to get more business

Same array of products Almost all the companies in the market are pitching in same array of products and hence this causes more problems as the unprofessional players are able to provide the integration at less cost. So anyone who is able to get a supply of the major financial techniques and senses required for setting up franchisee integration jumps into the business with a team of local people. They not only eat up the market share but also degrade the service level required for this type of job and hence degrade the market as a whole.

Innovation in approach required With all these problems, it becomes of utmost importance for a company to innovate to reach at the top. So, innovation in terms of products, lead generation, and communication strategy is required

 No idea of the position of the competitors The companies doesnt have any idea what the other companies in the same business are doing to generate more business, what are the innovations going around in the market.

Lack of understanding of the satisfaction of existing customers It always pays to introspect oneself. But so far no formal study in this regard has been undertaken so we dont know how we have performed so far.

2.2

Objectives of the project

To study different strategies of PORTFOLIO MANAGEMENT SERVICES of MOTILAL OSWAL SECURITIES LTD.

To explore the investors preferences towards Portfolio Management Services.

Analyzing broking market potential.

Providing data driven decision for customer acquisition.

Understanding the B2B marketing environment.

Understanding the process of marketing research suitable for B2B environment.

2.3

Scope of the project

The project focuses at understanding the existing forces that determine the acquiring of a solution like Customer Model Integration. Through this project we have been able to reach at a certain number of factors that are the main deciding factors that are taken under consideration by the companies while purchasing integration products.

The project also aimed at segmenting the market and understanding the individual needs of each market segment. This kind of exercise will not only help the company in focusing its marketing activity to the right kind of business enterprises but will also help in designing right mix of strategy to cater to the needs of sub-brokers in the best way possible. It is always wise to keep a track of what the competitor proposes to do in future as it alarms the market leader to be geared for the future. So, this study will help the company in gaining an insight into the innovations that are being done by other companies in the same kind of business. It was also aimed to study the level of satisfaction among the existing sub-brokers of the competitor company and gather their feedback to see what more the clients expect in terms of products, consultancy, return on investment and innovation. And last but not the least in order to make the summer internship program more fruitful in terms of academic learning, a complete analysis of the functioning of the franchisee integration business was done along with the organizational structure and other minor details.

2.4

Limitations of the project

Although the project aims at making an in-depth market research but there are some practical limitations regarding the methodology followed & the overall procedure. These can be summed up under the following points -- The sample taken for this research might not represent the whole population. Since the survey is conducted exclusively on individual the personal view of the respondent may make lead to some biasness in the results. Some people do not want to give correct details required in the questionnaire. It is also possible that some people might have given false or misleading information. Many people doubted the fact that the information given by them would be kept strictly confidential.

 Many big companies do not respond to such market research. Many companies didnt respond properly and mentioned that decisions regarding these issues are taken by their head offices. Many companies and customers do not wish to give out information which leads to incomplete responses. Many people gave unauthentic information to hide their ignorance.

MOSl HISTORY AND MILESTONE

The story of MOSl goes back many years, when Mr. Motilal Oswal and Mr. Raamdeo Agrawal met each other as students in a Mumbai suburban hostel in the early eighties. Both the young chartered accountants hailing from a rural & an unpretentious background had a common dream to build a professional organization with strong value systems, to provide reliable & honest investment advice to investors. Thus was born their first enterprise called "Prudential Portfolio Services" in 1987.

2009
Motilal Oswal Securities Ltd. enters 'Limca Book of Records' for creating India's largest dealing room in Mumbai MOSL was 'Rated No.1 Best recommendations Mid & Small Caps' and won awards in 3 out of 4 categories at the Starmine India Broker Rankings 2009 from Thomson Reuters

2008
MOSL awarded the prestigious Nasscom - CNBC TV 18 IT User Award 2008 MOSL awarded 'The Best Franchisor in Financial Services' by Franchisee World Magazine 2008 for the second consecutive year MOSL creates one of India's largest Equity Dealing & Advisory rooms, spread over 26,000 sq ft in Malad, Mumbai Motilal Oswal's India Business Excellence Fund raised USD 125 million, 25% higher than the initial target of USD 100 million D & B survey rates MOSL as India's top Broking House in terms of total number of trading terminals. MOSL alliance with IDBI Bank to offer Online Trading Services

2007
The Strategic partnership between MOSL and SBI - EZtrade - reaches an important milestone i.e. In less than a year it has managed to sign up more than 10,000 customers Starts Knowledge First campaign Motilal Oswal was perceived as the most Research driven stock trading player - Starcom Mediavest Survey Introduces a separate brand for Private Client Group Purple Motilal Oswal Commodities Broker Pvt Ltd (MOCBPL) bagges Globoil India's prestigious 'Outstanding Commodity Broking House 2007' Award Motilal Oswal Financial Services ltd. gets listed on the BSE & NSE Mr. Motilal Oswal - Chairman and Managing Director has been appointed as a member of the Managing Committee of Indian Merchant Chambers. Motilal Oswal Financial Services Ltd files RHP with SEBI for an IPO Motilal Oswal Financial Services Ltd. features as a case study in Harvard Business School

 2006
Motilal Oswal Financial Services Ltd ties-up with State Bank of India to offer online trading. Motilal Oswal Financial Services Ltd was declared as the Best Research House for Indian Stocks in 2006 as per AQ Research. AsiaMoney Brokers poll 2006 rates Motilal Oswal Securities Most Independent ResearchLocal Brokerage Introduces unique 1 paisa trading scheme for online Derivatives trading Launches the India Business Excellence Fund (IBEF), a US$ 100 mn India focused Private Equity Fund. Investment banking business advises Aban in their majority controlling stake of Sinvest ASA one of the largest investment banking deals of 2006. Places 9.48% with two leading private equity investors - New Vernon Private Equity Limited and Bessemer Venture Partners. Issues about 13% of companys equity to employees as ESOPs. Acquires a leading south Indian brokerage firm - Peninsular Capital Markets. Also acquires 1 more brokerage firms in UP. Enters Private Equity and Investment Banking businesses. Value PMS gives 390% returns to its investors between Feb 2003 and March 2006. Another milestone in distribution 1160 Business locations, over 360 cities, serving over 200,000 customers. Employee base crosses 2000 and Business Associate base crosses 780.

SERVICES PROVIDED BY MOSL

 MOSL is providing different kind of services under its Broking and Distribution Services to its clients. They are as follows.
Advised based Broking on BSE / NSE ( Cash & Derivatives ) Portfolio Management Services ( PMS ) Internet Trading ( E Broking ) Timely & Researched based Investment and Trading Ideas Depository Services ( MODES ) Advised based Mutual Fund Commodities IPO

Portfolio Management Service

INTRODUCTION TO PORTFOLIO MANAGEMENT SERVICE

What is PMS?
The full Name of PMS is Portfolio Management Service. Portfolio Management Service (PMS) is a product wherein a customized investment portfolio is created to suit the investment objectives of a client. In PMS, the portfolio manager handles the responsibility of creating and tracking the portfolio. Idea identification, order execution, settlement and performance reporting is all assumed by the PMS provider. PMS is for an investor who doesnt have the time and expertise to manage his portfolio. The client derives the benefit of the professional and experience of the Portfolio Manager.

Why PMS?
Investors Dilemma I have the money & desire to make money Now I know or I already knew equity is a good instrument for creating wealth but My Busy Schedule does not allow me to have time to study and identify the right stocks Sometimes, I have tried my luck in the stock market and realized that through I understand the market to some extend but is not enough to keep coming with winning investment.

DIFFERENT KIND OF PMS

There are three kinds of PMS provided by Motilal Oswal Securities Ltd. They are as followed Value Strategy PMS Bulls Eye Strategy PMS Trillion Dollar Opportunity Strategy PMS

These all PMS have their different features. They all are descriptive as under.

VALUE PMS
Value PMS is a scheme meant for investors with a Long Term investment horizon in the Indian Equity Markets the money management team is headed by Mr. Raamdeo Agrawal, the founder-director of Motilal Oswal Securities Ltd., and a very well respected investor among the Indian Investor Community. Mr. Agrawal believes in low portfolio churn and a high margin of safety investment philosophy for long term and sustainable wealth creation. The Value PMS has been running successfully since February 2003, with clients not only in India, but across the globe. Motilal Oswal (MOSl) has a highly satisfied client base both on the Institutional side as well as on the retail side of High Net worth Individuals and Franchisees. This has been possible because of a strong equity research team (Inquire) completely focused on identifying wealth creating companies. At Inquire, we very clearly understand the difference between value and price. Our teams of Analysts follow a thorough research process. This process involves understanding the business dynamics through a continuous interaction with company managements, suppliers and competitors. In fact, it is this dedication and processes that have won us international acclaim like Asia Money 2000 Brokers Poll award. MOSls own portfolio, handled by Ramdeo Agrawal has delivered a return of 30% p.a. compounded over the last five years on a substantial size. It is this success that makes us confident of handling funds management for external clients. MOSLs primary objective is preservation of capital and prevention of any significant permanent capital loss. The whole stock selection process is geared to find investment ideas with a sufficient margin of safety, so that even a mediocre sale will fetch good returns. This approach can be termed as conservative. They expect that the stock market will give a return of 15% p.a. for the next three to five years. Their goal will be to do better than this. However, there is no guarantee of positive returns. For hassle free custody, banking and settlements MOSL has its own depository service Motilal Oswal Depository Services. Their own depository will act as your custodian for a nominal custody fee. MOSLs in house depository will facilitate MOSL as acting as custodians and present you a completely hassle free custody. They will handle your Banking (in a special bank account under POA from you) and trade. Settlement will be done by their trained personnel who will ensure that all administrative matters are expeditiously handled and reconciled. Alternatively, you may choose an external custodian with whom we will liaise on your behalf.

Thus you will only have to monitor the portfolio performance through periodic reports from the company side. All administrative matters will be off your shoulders.

You can expect the following from MOSL

Monthly Portfolio Statements including Portfolio Performance Report. Monthly Transaction Statements, Bank and DP Statements. Quarterly meetings with Mr. Ramdeo Agrawal your portfolio manager Reports on tax status of the portfolio before the advance tax due dates.

How it is different from Mutual Fund?

MOSl PMS offers you a unique combination of equity expertise and personalized service. Your portfolio will be constructed to meet your investment goals at a given level of risk. They have a stated objective to keep the churn very low. It is a little known fact that high turnover takes away a major part of investment returns. You can monitor the portfolio turnover. These aspects would not be available to you in a mutual fund. Importantly, MOSLs fee is significantly lower than the basic management fee levied by a mutual fund (preperformance management fee).

Reason of Performance Fee:

The base asset management fee being charged is much lower than that charged by others, and that is to cover their running costs. They have consciously kept MOSL fee more performance linked, as they strongly believe that it will align the interests of the firm and the client.

Who can Sign Up?

The following categories are eligible as per SEBIs rules. Individuals HUFs Companies N.R.I.

FEATURES OF VALUE PMS

Scheme :
Minimum Portfolio Size: Rs. 10 Lakhs cash or approved securities per individual or group.

Fee Structure :
One time upfront Fee 0.50% Fixed Management Fees Assets Under Management Per Annum Per Annum Per Annum >25 Lakhs 2.75% 1.50% Rs 25 Lakhs To Rs100 Lakhs 2.50% 100 Lakhs and above 2.25% Performance Based Management Fees Nil 10% Profit Sharing on Higher Water Marking Basis Nil Exit Load Exit Between 0-12 months 2.00% Exit after 12 months Nil Custodian Fees - 0.25% 0.02% Brokerage The Portfolio manager will have discretion to appoint any brokers to execute the transaction for Portfolio management scheme. Brokerage Rate will be as applicable.

Depositary Charge -As Applicable

Registrar and Transfer Fees- Nil

Service Tax, Security Transaction Tax and other Statutory Levels -As Applicable

BULLS EYE PMS

Bulls Eye is the second product under the AMC. It is a short to medium term investment product, for which there is a substantial appetite. Hence, Bulls Eye is launched to fill in this Gap

It is to invest in stocks with a time frame of 1-6 months, for a minimum 15- 20% move. Majority of the corpus, with higher weight age per stock, will be invested in MOST researched ideas both large cap & mid cap. Technical would be used to TIME the fundamental ideas, and also to pick momentum based ideas where there is no in-depth fundamental coverage. A lower weight will be assigned to stocks where we may not have in-house coverage, so as to participate and capture sharp rallies. The whole idea is to minimize the risk by timing the stock selection. Though the minimum signing amount is Rs. 50 Lakhs, we give flexibility to the investor to join at Rs. 25 Lakhs & then scale up based on his comfort & overall performance. Investors who not only want steady returns irrespective of market volatility, but also would like to take advantage of short to medium term rallies. Those who have knowledge of the stock market but lack the discipline to book profits when the going is good or sit on cash when market looks overheated and cannot track when the stock has run ahead of its fundamentals in the short term are the ideal investors who should invest in Bulls Eye. Booking profits regularly and ability to sit on cash are the key salient features of Bulls Eye PMS. Idle cash will be invested in liquid mutual funds for the short term. The scheme aims to deliver 15-20% returns in Volatile Markets, especially when there is no one-sided trend. In a trended bull market, returns can be substantially better.

 For Whom
The mind of a successful and a busy investor There is so much action in the markets nowadays. I love the action and whatever everybody may say; Stock Market is one place where you can outdo all other investmentinstruments. All one needs is in-depth understanding of the markets and the company oneinvests in right entry levels and profitable exit points. Unfortunately, all this requires time to study, which my busy schedule doesnt allow. There have been so many times when I felt like encasings my large unrealized gains but got swayed by my Greed. Can I get a good portfolio manager who can take my funds and invest them intelligently in equities? Someone, who invests my money in fundamentally strong companies, take advantage of volatile markets and book profits regularly keeping marketconditions in mind." Its time you hit the Bulls Eye with Motilal Oswal Securities Limited.

Bulls Eye strategy to better returns . . .

Here is the investment strategy we employ to generate desired returns through our Bulls Eye PMS scheme. We believe Investing = Hunting. Its about identifying the right stocks, picking and exiting at the right times and then continuing the cycle. Identifying theright stocks: Our strong proven Fundamental Analysis skill allows us to understand the profile and the performance of various companies. This allows us to pick the wheat from the chaff.

Determining Entry and Exit Points:

After identifying the companies for investment, we resort to technical analysis, read the market condition and pick up the stocks in opportune sectors. We believe that apart from the right entry levels, selling at the right time is equally important. Therefore, we employ similar strategy while exiting the stock and this completes our hunt for good returns. Moderate risk is the key philosophy: We take moderate risk while making any investment. Duration of the investment is one to six months. So even while a stock may look fundamentally strong, the age of our investment in it may depend on the reality based on technical research along with the prevailing market conditions (markets are overheated, over expectations build-up etc). Our, now famous, Wealth Creation Studies have proved that there arent even 100 companies out of the 6000 listed on exchanges that create wealth for its investors during the five year periods. So the task of picking the right stocks is more difficult than most of us can imagine.

FEATURES OF BULL S EYE PMS

Scheme :
Minimum Portfolio Size: Rs. 25 Lakhs cash or approved securities per individual or group.

Fee Structure
One time upfront Fee 0.50% Fixed Management Fees Assets Under Management Per Annum Per >25 Lakhs 2.75% Rs 25 Lakhs To Rs100 Lakhs 2.50% 100 Lakhs and above 0.75% Performance Based Management Fees Nil 10% Profit Sharing on Higher Water Marking Basis

Exit Load Exit Between 0-12 months - 2.00% Exit after 12 months Nil Custodian Fees -0.25% Brokerage The Portfolio manager will have discretion to appoint any brokers to execute the transaction for Portfolio management scheme. Brokerage Rate will be as applicable. Depositary Charge- As Applicable Registrar and Transfer Fees Nil Service Tax, SecurityTransaction Tax and other Statutory Levels As Applicable

TRILLION DOLLAR OPPORTUNITY STRATEGY PMS

The portfolio is designed to invest in themes /stocks in the small and mid cap segment which are going to be a part the NEXT TRILLION DOLLAR GDP GROWTH. The Portfolio would target to invest in Small & Mid Cap Opportunities which have the potential of delivering aboveaverage growth over the next 2-3 years.

The investment philosophy is to invest in stocks which are available at reasonable valuations and promise more than average growth. The portfolio would aim to identify emerging themes. The Portfolio would attempt to identify emerging themes early and exit when these when they are fairly discounted.

We firmly believes that markets rewards consistent growth over a period of time and only after critical size has been achieved by the company. For any stock to get recognized by the Market and get a desired Valuation one has to wait for the right Trigger Point. Perception Rerating happens due to:

Increased Sales volume Consistent Growth Better Margins Growing stakeholders confidence

The Product aims to deliver superior returns by investing in Small & Mid cap ideas that are part of the next Trillion Dollar GDP growth opportunity.

 Portfolio Characteristic:
Investments in Small and Mid-cap Stocks Bottom Up Stock Picking Approach Focused Theme Portfolio Investment Horizon - Long term (2 to 3 Yrs) Benchmark: - CNX Mid Cap Buy and Hold Philosophy low portfolio churn Open Ended Portfolio with Exit Fee Quarterly Disclosure Of Portfolio

Investment Philosophy and Strategy

High Growth Story: Sector and Companies which promise a higher than average growth. Reasonable Valuation: Invest in high growth companies at reasonable price / value Emerging Themes: Focus on Identifying Emerging Stocks / Sectors Buy & Hold Strategy: The Portfolio shall focus on above philosophies and hold them till it realizes it true market potential. Wealth is created by sitting.

Reports provided to investors .

Motilal Oswal Securities provides the following reports to the investors to keep them appraised with their portfolio performance. Monthly transaction statements. Monthly portfolio statement specifying portfolio of the investor and gain and loss. Yearly portfolio statement certified by a CA.

Who can Sign in?

.Proprietorship firms HUFs Partnership firms Registered societies Registered trusts Corporate

RISK FACTOR
The investment made in the securities are subject to market risk and there is no assuranceof guarantee that the value of or return on the investment made will always appreciate, it could depreciate to an unpredictable extent.

Following are t he risk factors as perceived by management:

Investment in equities, derivatives and mutual funds are subject to market risks and there is no assurance or guarantee that the objective of the scheme will be achieved. As with any investment in securities, NAV of the portfolio can go up or down depending upon the factors and forces affecting the capital markets. The performance of the schemes may be affected by changes in government policies, general levels of interest rates and risk associated with trading volumes, liquidity and settlement system in equity and debt market.

The past performance of the portfolio manager does not indicate the future performance of
the same Scheme in future or any guaranteed returns through these schemes.

The names of the schemes do not in any manner indicate their prospect or returns. The
performance in the equity scheme may be adversely affected by the performance of individual companies, changes in the market place and industry specific and macro economic factors.

Investment in debt instrument and other fixed income securities are subject to default
risk, liquidity risk and interest rate risk. Consequently, the NAV of the portfolio may be subject to fluctuation.

Investment in debt instruments are subject to reinvestment risk as interest rates prevailing on
interest amount of maturity due dates may differ from the original coupon of the bond, which might result in the proceeds being invested at a lower rate.

The scheme may invest in non-publicly offered debt securities and unlisted equities. This may
expose the scheme to liquidity risk.

Engaging in securities lending is subject to risks related to fluctuations in collateral

value/settlement/liquidity/ counter party.

TYPES OF ANALYSIS
There are main two types of analysis which are used for selecting Portfolio. They are as followed

Technical Analysis Fundamental Analysis

TECHNICAL ANALYSIS

Introduction
The methods used to analyze and predict the performance of a companys stock fall into two broad categories: fundamental and technical analysis. Those who use technical analysis look for peaks, bottoms, trends, patterns and other factors affecting a stocks price movement and then make buy/sell decisions based on those factors. It is a technique many people attempt, but few are truly successful at it. The world of technical analysis is huge today. There are literally hundreds of different patterns and indicators that investors claim to have success with. We have tried to keep this tutorial as short as possible. Our goal is to introduce you to the different types of stock charts and the various technical analysis tools available to investors.

What Is It?
Technical analysis is a method of evaluating securities by analyzing statistics generated by market activity, past prices and volume. Technical analysts do not attempt to measure a securitys intrinsic value; instead they look at stock charts for patterns and indicators that will determine a stocks future performance. Technical analysis has become increasingly popular over the past several years, as more and more people believe that the historical performance of a stock is a strong indication of future performance. The use of past performance should come as no surprise. People using fundamental analysis have always looked at the past performance of companies by comparing fiscal data from previous quarters and years to determine future growth. The difference lies in the technical analysts belief that securities move according to very predictable trends and patterns.

These trends continue until something happens to change the trend, and until this change occurs, price levels are predictable.There are many instances of investors successfully trading a security using only their knowledge of the securitys chart, without even understanding what the company does.

Here are some points to remember about technical analysis:

Technical analysis is a method of evaluating securities by analyzing statistics generated by market activity, past prices and volume. The advantage of using a bar chart over a straight line graph is that it shows the high, low, open and close for each particular day. One of the most basic and easy to use technical analysis indicators is the moving average, which shows the average value of a securitys price over a period of time. The most commonly used moving averages are 20, 30, 50, 100 and 200 - day. Support and resistance levels are price levels at which movement should stop and reverse direction. Think of support/resistance (S/R) as levels that act as a floor or a ceiling to future price movements. There are literally hundreds of different price patterns and indicators out there. Technical analysis is a terrific tool, but it is much more effective when combined with fundamental analysis.

FUNDAMENTAL ANALYSIS
Introduction
The massive amount of numbers in a companys financial statement can be bewildering and intimidating to many investors. On the other hand, if you know how to read them, the financial statements are a gold mine of information. Financial statement analysis is the biggest part of fundamental analysis. Also known as quantitative analysis, it involves looking at historical performance data to estimate the future performance of stocks. Followers of quantitative analysis want as much data as they can find on revenue, expenses, assets, liabilities and all the other financial aspects of a company. Fundamental analysts look at this information to gain insight on a companys future performance. This doesnt mean that they ignore the companys stock price; they just avoid focusing on it exclusively. In this tutorial, well show you how to understand the basics of the financial statements (both quarterly and annual reports), and give you the tools you need to decide which companies make worthwhile investments. One of the most important areas for any investor to look at when researching a company is the financial statements. It is essential to understand the purpose of each part of these statements and how to interpret them. Financial reports are required by law and are published both quarterly and annually. Management discussion give investors a better understanding of what the company does and usually points out some key areas where they did well. Audited financial reports have much more credibility than un-audited ones. The balance sheet lists the assets, liabilities, and shareholders equity. For all balance sheets: Assets = Liabilities + Equity. These two sides must always equal each other (balance). The income statement includes figures such as revenue, expenses, earnings and earnings per share. For a company, the top line is the revenue while the bottom line is net income. The income statement takes into account some non-cash items such as depreciation. The cash flow statement strips away all non-cash items and tells you how much actual money the company generated. The cash flow statement is divided into three parts: cash from operations, financing and investing. Always read the notes to the financial statements. They provide more in-depth information on a wide range of figures reported in the three financial statements.

PRIMARY DATA RESEARCH

Objectives of The Research
STUDY ON PORTFOLIO MANAGEMENT SERVICES STRATEGIES AND INVESTORS AWARENESS AND PREFRENCE FOR IT

Research Methodology
Research methodology is the scientific and general method through which the research objective is conducted. The business research methodology includes the sample size, nature of the study, data collection method, data source, research instruments, sampling plans etc.

Type Of Data
There are mainly two types of data primary data and Secondary data.i have used both.

Data Source
As I am using here the primary data for research, respondents are the main source for getting information and secondary data collected from various past surveys, internet and journals

Data Collection
For data collection I had used the questionnaire

Sampling Plan
Target Population : People of pune City Sample Size : 100 Samples Sampling Method : Convenience Sampling

ANALYSIS OF QUESTIONNAIRE

1)

Do You Invest in Stock Market ?

Invest 80%

Do Not Invest 20%

20

invest Do not invest

80

In my survey I found that most of people up to 80% in pune city invest in stock market. Only 20% people dont invest in stock market. This shows that the market of pune city is very potential.

2)

Out of the following investment options, where do you prefer to invest your savings rateon the scale of 1 to 5? (5 being the most important factor) ?

MF 64

EQUITY 160

DEBT 14

BANK 164

PMS 14

GOVT.BONDS COMMIDITY INSURANCE POST 26 20 100 38

Here I found that mostly people fund their investment in safe side, so that they invest in bankand insurance. They are supposed that equity market is some what risky market and it isgambling. But it also gives very good return. Currently market is going in bull side, so that they prefer equity as a good investment instrument.

3)

For How Much Period Do You Want To Invest In Stock Market?

Long Term- 77

Short Term -23

23

LONG TERM SHORT TERM

77

In my survey I found that maximum of the respondents invest for the long term (77%) while only 23% invest for the short period of time.

4)

If you invest in Equity, on what basis do you select a particular script ?

TIPS 24

FRIENDS 38

COMPANY RESEARCH 10

ANNUAL REPORT 5

OWN RESEARCH 15

CORPORATE NEWS 9

9 24 15 TIPS FRIENDS COMPANY RESEARCH 5 10 38 ANNUAL REPORT OWN RESEARCH CORPORATE NEWS

In my market survey I found that maximum number of respondents investing influencedby friends (38%), than they invest by tips (24%) and than by own research (15%), Company Research (10%), corporate news and annual report 9% and 5% respect.

5)Are You Aware Of Portfolio Management Service ?

Aware- 40

Not Aware- 60

As per my survey I found that 40% of the respondents are aware about PMS, while 60% respondents do not aware about PMS.

5)

Are You a User Of Portfolio Management Service ?

Yes -15

No- 25

As per my survey I found that 40 percent people are aware about PMS but only 15 person out of 100 are user of PMS who invest in different PMS schemes.

6)

In Which Kind Of PMS Do You Invest ?

50 LAKH 26.66%

25 LAKH 26.66%

5 LAKH 46.66%

As per my survey I found that among the PMS users 46% invest in 5 Lakh plan, while 26% invest in 25 lakh & 50 lakh plan each.

8) Which Problem Do You Face While Investing In PMS ?

BIG AMOUNT 57

RETURN RISK 34

BROKER RISK 9

BIG AMOUNT 34 57 RETURN RISK BROKER RISK

As per my market survey I found that most of the people face the problem of big amount of investment in PMS. 34% respondents give the opinion that return risk is a problem while investing in PMS, and very few are saying that brokers risk is a problem due to lack of research & knowledge while investing in PMS.

7)

Do You Know About Any Other PMS Provider ?

Yes- 30

No -70

SSKI 6

ILFS 5

ANGEL RBROKING MONEY 4 5

SHCIL 5

PATEL INDIA SECURITIES INFOLINE 2 3

3 6 2 SSKI Broking RMoney 5 5 SHCIL PATEL ANGEL INDIA INFOLINE

As per my survey people also know about the other service provider accept MOSL which are as above.

8)

Do You Agree That PMS Is a Right Way Of Investment ?

Strongly agree 22

Agree 32

Neutral 36

Disagree 9

Strongly Disagree 1

1 9 22 STRONGLY AGREE AGREE NEUTRAL 36 DISAGREE STRONGLY DISAGREE 32

As per my study I found that 22% of the respondents are strongly agree that PMS is a right way of investment. While 32% are agree with the statement. Only 10% are disagreed with the statement.

9)Monthly Income of Respondent

<10000 44

10000-15000 41

15000-20000 9

20000-25000 5

25000-50000 1

>50000 0

As per my survey result I found that among all my respondents 44 respondents are in income class of <10000 Rs. Per month. 41 respondents are in between 10000-15000 Rs. Per month. And only 15 respondents are above income of 15000 Rs. per month.

SWOT ANALYSIS

Strength: A large network is one of the most plus point of Motilal Oswal. The leadership of the Motilal Oswal is also very good. The Research Team of Motilal Oswal is very powerful. PMS is totally dependent on the research work so it is very beneficial for the PMS. The service provided to customers by Motilal Oswal is also good. The companys total turnover is very high. The return given to customers on their investment is high. The company has well and experience dealers also. The technology used by Motilal Oswal is very advanced

Weakness:There is over staffing in company. So many times some of employee has no work and this effects on their moral for work and wastage of time also. The time management of company is not proper. Lack of proper co-ordination between two departments of the company.

 Opportunity: The Equity & Derivative market of Pune is very potential. The company has huge database of HNI customers, so company can take benefit for its services special for PMS In Pune city there is only one branch of Motilal Oswal. Due to this reason the investors of the other side of Pune can not take the more benefit of it. So company can make its other branch at the other part of Pune also. The growth of clients in company is constant. The place where the company is situated is a very famous corporate place so it is beneficial for the company. Company arranges seminars regularly for the increasing awareness about the services and its new products

s Threats
The company has to face a cut throat competition Rules and regulation of government of India are also very tuff The increment in new competitors of company with new technology is also very fast.

FINDINGS

Market is potential but only few people investors know about the PMS services. The Company has no any expert person for the marketing of PMS The companys Tips are highly demanded People want to invest in PMS but they are afraid about broker risk and high amount of PMS. HNI Clients agree with research based investment gives more return. And as they are long term investor company should try to convert them in Portfolio investor. 20% people are not investing in stock market because they believe that it is gambling and gambling is sin and it is highly risky.

SUGGESTIONS
The staff of Back office or dealers should meet their clients and try to find out their problems and solve it. The Company should take employee specialist for PMS. The Company should make contact for PMS services with HNI customers. The Company can create more awareness about PMS through seminars and personal relationship. Company should make literatures in different languages also. Most of people dont know good English. Company should do more advertisement of PMS. Follow up the customers on time. The solution of customers complains should be done on time.

QUESTIONNAIRE
This survey is undertaken as a part of summer training for PGDM program. Information provided for the same will be used only for educational purpose and will not be disclosed anywhere else.

PERSONAL INFORMATION
Name : Age : Email id : Contact No :

Monthly Income (Rs.) : Less than 10000 [ ] 10000 15000 [ ] 15000 20000 [ ] 20000 25000 [ ] 25000 50000 [ ] More than 50000 [ ]

Occupation [ ] Businessman [ ] Housewife [ ] Employee [ ] Retired [ ] Student [ ] Other.................................................

(1)Do you invest in your savings? (Tick any One)

Invest [ ] Do Not Invest [ ]

(2)Out of the following investment options, where do you prefer to invest your savings rate
on the scale of 1 to 5? (5 being the most important factor) Mutual fund [ ] PMS [ ] Post [ ] Equity [ ] Govt. Bonds [ ] Debt [ ] Commodity [ ] Bank [ ] Insurance [ ]

Other (pl. specify) [ ]

(3) You prefer to invest for?

Long term [ ] Short term [ ]

(4) If you invest in Equity, on what basis do you select a particular script?
Tips [ ] Annual Report [ ] Friends [ ] Own research [ ] Company Research [ ] Corporate News [ ]

(5)Are you aware of Portfolio Management Services (PMS)?

Yes [ ] No [ ]

(6)Are you a user of PMS? (Tick any One) Yes [ ] No [ ]

(7) How much money have you invested in PMS? (Tick any One)u in Investment more than 50 lakhs [ ] Investment more than 25 lakhs [ ] Investment more than 5 lakhs [ ] None of above [ ]

(8)) Do you agree that PMS is a right way of investment? (Tick any One) Strongly agree [ ] Agree [ ] Neutral [ ] Disagree [ ] Strongly disagree [ ]

(9)) what problem do you face while investing in PMS? (Tick any One) Big amount for investment [ ] Return risk [ ] Broker risk [ ]

(10) Do you know about any other PMS providers? (Tick any One) Yes [ ] No [ ]