Professional Documents
Culture Documents
Karvy Buddhi
Karvy Buddhi
DECLARATION
Sandeep Yadav
Name of the Student
PREFACE
Management
of
modern
business
requires
an
appreciation
of
ACKNOWLEDGEMENT
Sandeep Yadav
EXECUTIVE SUMMARY
TABLE OF CONTENTS
S.
Descriptions
Page
NO.
1. Introduction to the industry
no.
7-23
24-34
3. Research Methodology
35-44
45
46-54
6. Swot Analysis
55-56
7. Conclusion
57
58
9. Appendix
59-60
10. BIBLIOGRAPHY
61
(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 lowrisk, 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 longterm investments. The transactions taking place in this market will be for
periods over a year.
8
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,
education after 6 years, purchase of a house after 10 years), and how much
money you will need for the same. The answer will help you arrive at the time
frame for your investment short term, medium term or long term.
As you can see, the later you start, the higher will be your required rate of return,
hence as your investment horizon reduces, for the same level of saving you may
need to take higher risk. Alternatively, if you were not willing to take a higher risk,
you would have to save a higher amount every month- Rs 9800, almost twice the
original savings required to achieve your target accumulation.
These three steps give a very basic idea about how to invest, when an investor is
seeking investment in different financial tools. Though there are different steps of
investment in each financial tool, these acts as blue print for them too.
11
12
13
15
or any number of different funds to help one meets ones specific goals. In
general mutual fund fall under 3 general categories:
GROWTH FUNDS
Like aggressive growth funds, growth fund generally invests in stocks for growth
rather than income. They are considered more conservative in their approach
because they usually invest in established companies to achieve long-term
growth. Growth fund provides low current income but the investor principal is
more stable then it would be in an aggressive growth fund. While the growth
potential may be less over the short term, many growth funds have superior longterm performance records.
These funds are suitable for growth oriented investors but not investors who are
unable to assume risk or who are dependent on maximizing current income from
there investments.
Growth and income funds seek long-term growth of capital as well as current
income. The investments strategies use to reach these goals vary among funds.
Growth and income funds have low to moderate stability of principal and
moderate potential for current income and growth. They are suitable for investors
who can assume some risk to achieve growth of capital but want to maintain a
moderate level of current income.
EQUITY FUNDS
Funds that invest in stocks represent the largest category of mutual fund.
Generally the investment objective of this class of fund is long-term capital
growth with some income. There are however many type of equity funds.
BALANCED FUNDS
The Balanced funds aims to provide both growth and income. These funds invest
in both shares and fixed income securities in the proportion indicated in their offer
documents. It is an idea for investors who are looking for the combinations of
income and moderate growth.
term investments, money market mutual funds are able to keep a virtually
constant unit price; only the yield fluctuates.
Money market funds are suitable for those investors who want high stability of
principal and current income with immediate liquidity.
Close-ended schemes have fixed maturity periods. Investors can buy into these
funds during the period when these funds are open in the initial issue. After that
such scheme cannot issue new units except in case of bonus or right issue.
However after the initial issue you can buy or sell units of the schemes on the
stock exchange where they are listed. The market price of the unit could vary
from the NAV of the schemes due to demand and supply factor
Funds
Returns
Sector funds
Balance funds
Income Funds
Liquid Funds
7% to 9%
p.a
The above-mentioned returns in the table are indicative and not assured. All
investments in MUTUAL FUNDS are securities and are subject to market risk
and the NAVs of the schemes may go up and down depending upon the factors
and forces affecting the security market including the fluctuations in the internal
rates. The past performance of the MUTUAL FUNDS is not indicative of future
performance.
19
REGULATORY ASPECTS
SCHEMES OF MUTUAL FNDS
Every mutual fund shall along with the offer documents of each scheme
pay filing fees.
The offer document shall contain disclosures which are adequate in order
to enable the investors to make informed investment decision including
the disclosure non maximum investments proposed to be made by the
scheme in the listed securities of the group companies of the sponsor. A
close-ended scheme shall be fully redeemed at the end of the maturity
period. Unless a majority of the unit holders otherwise decide for its
rollover by passing a resolution.
The mutual fund and asset management company shall be liable to refund
the application money to the applicants:-
If the moneys received from the applicants for units are in excess of
subscription as referred to in clause (ii) of sub-regulation.
20
But not later than six weeks from the date of closure of the initial
Subscription list and or from the date of receipt of the request from the
unit
GENERAL OBLIGATION
21
Every asset management company for each scheme shall keep and
maintain proper book of accounts, records and document, for each
scheme so as to explain its transaction and to disclose at any point of time
the financial position of each scheme and in particular give a true and fair
view of the state of affairs of the fund and intimate to the board the place
where such books of accounts, records and documents are maintained.
The financial year for all the scheme shall end as of March 31 of each
year. Every mutual fund or the asset management company shall prepare
in respect of each financial year an annual report and annual statement of
accounts of the schemes and the fund as specified in Eleventh Schedule.
Every mutual fund shall have the annual statement of accounts audited by
an auditor who is not in any way associated with the auditor of the asset
management comp
RESTRICTIONS ON INVESTMENTS
A mutual fund scheme shall not invest more than 15% of its NAV in debt
instrument issued by a single issuer, which are rated not below investment
grade by a credit rating agency authorize to carry out such activity under
the act. Such investment limit may be extended to 20% of the NAV of the
scheme with the prior approval of the Board of Trustees and the Board of
Asset Management Company.
22
A mutual fund Scheme shall not invest more than 10% of its NAV in
unrated debt instrument issued by a single issuer and the total investment
in such instruments shall not exceed 25% of the NAV of the Board of
Trustees and the Board of Asset management.
No mutual funds under all its schemes should own more than 10% of any
companys paid up capital carrying voting rights.
Such transfers are done at the prevailing market price for quoted
instrument on spot basis.
Number of foreign AMCs is in the queue to enter the Indian markets like
Fidelity Investments, US based, with over US$1trillion assets under
management worldwide.
Our saving rate is over 23%, highest in the world. Only channelizing these
savings in mutual funds sector is required.
'B' and 'C' class cities are growing rapidly. Today most of the mutual funds
are
concentrating on the 'A' class cities. Soon they will find scope in the
growing cities.
23
Mutual fund can penetrate rural like the Indian insurance industry with
simple and limited products.
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.
25
An ISO 9002 company, Karvys 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.
Karvys 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.
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.
Continued.
26
This wing of Karvy has traversed wide spaces to tie up with the worlds
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.
Karvy Insurance Broking Pvt. Ltd., provides both life and non-life
insurance products to retail individuals, high
29
or
corporate
restructuring.
Involvement
in
raising
30
31
7) Karvy Finance:
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:
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.
QUALITY POLICY:
To achieve and retain leadership, Karvy aims for complete customer
satisfaction, by combining its human and technological resources, to
33
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.
Achievements:
34
Research Methodology
Research has its special significance in solving various operational and planning
problem of business and industry. Research methodology is a way to
systematically analyze the research problem.
OBJECTIVE OF STUDY
In view of the problem cited above, the study aims at analyzing the following
major issues:
TYPES OF RESEARCH
The customer research was carried out in two phases:
a. An exploratory research was carried out to know what customer looks for in
financial company and whether customers are satisfied or not with there products
b. The other was a diagnostic study to identify the factors responsible for
satisfactions or dissatisfaction of customer
This research is descriptive and qualitative type of research which was used to
collect useful data
Sample design
Data has been presented with the help of diagrammatic and pie chart etc.
Sampling procedure
The sample is selected in a random way, irrespective of them being investor
or not or availing the services or not. It was collected through mails and
personal visits to the known persons, by formal and informal talks and
through filling up the questionnaire prepared. The data has been analyzed by
using the measures of central tendencies like mean, median, mode. The
group has been selected and the analysis has been done on the basis
statistical tools available.
36
SCOPE OF STUDY
Research can be defined as a systemized effort to gain new knowledge. A
research is carried out by different methodologies which have their own pros and
cons. Research methodology is a way to solve research in study and solving
research problems along with logic behind them are defined through research
methodology. Thus while talking about research methodologies we are not only
talking of research methods but also consider the logic behind the methods. We
are in context of our research studies and explain why it is being used a
particular method or technique and why the others are not used. So that
research result is capable of being evaluated either by researcher himself or by
others.
PROBLEM STATEMENT
Due to the falling Rate of Interest on Bank deposits, it is obvious that Investment
in Mutual Fund will grow in year to come. However lack of Awareness of Mutual
Fund is a hindering factor in expected growth of Mutual Fund Business.
Under noted problems are envisaged in this area:
o
Difficult to follow up the people whose names are being stored in a data.
37
ASSUMPTIONS
1. It has been assumed that sample of hundred represents the whole
population
2. The information given by the customer is unbiased
LITERATURE SURVEY
The project is based on pure findings of facts
b. The sampling size put under 2 categories: Probability Sampling and Non
Probability Sampling.
c. COLLECTION OF DATA
This research is solely based on primary research done by means of
questionnaires targeted to respondents who primarily belong to the business and
service sector. The sample size is 100
We have executed the project after prior discussion with our guide and structured
in the following steps:
38
a. Preparation of a questionnaire
b. The focal point of the designing the questionnaire was to comprehend the
current investment scenario
c. This questionnaire was primarily aimed to respondents who belong to the
service and business class people
d. The questionnaires were discussed through personal interface with the
respondents
The initial issue expenses in respect of any scheme may not exceed 6% of the
funds raised under that scheme.
Every mutual fund shall buy and sell securities on the basis of deliveries and
shall in all cases of purchases, take delivery of relative securities and in all
cases of sale, deliver the securities and shall in no case put itself in a position
whereby it has to make short sale or carry forward transaction or engage in
Badla finance.
Every mutual fund shall get the securities purchased or transferred in the
name of the mutual fund on account of the concerned scheme, wherever
investments are intended to be of long-term nature.
Pending deployment of funds of a scheme a mutual fund can invest the funds
of the scheme in short term deposits of scheduled commercial banks.
39
No mutual fund scheme shall invest more than 105 of its NAV in the
equity shares or equity related instrument of any company. Provided
that, the limit of 10 percent shall not be applicable for investments in
index fund or sector or industry specific schemes.
A Mutual fund scheme shall not invest more than 5% of its NAV in the
equity shares or equity related investments in case of open-ended
schemes and 10 % of its NAV in case of close ended schemes.
Liquidity: It's easy to get your money out of a mutual fund. Write a
check, make a call, and you've got the cash.
Convenience: You can usually buy mutual fund shares by mail, phone,
or over the Internet.
Low cost: Mutual fund expenses are often no more than 1.5 percent of
your investment. Expenses for Index Funds are less than that, because
index funds are not actively managed. Instead, they automatically buy
stock in companies that are listed on a specific index.
40
Flexibility: Mutual funds are flexible because they change time to time
and also if an Investor wants his money back before the maturity of the
Fund He/she can easily redeem it.
No Guarantees:
No investment is risk free. If the entire stock market declines in value, the
value of mutual fund shares will go down as well, no matter how balanced
the portfolio. Investors encounter fewer risks when they invest in mutual
funds than when they buy and sell stocks on their own. However, anyone
who invests through a mutual fund runs the risk of losing money.
Taxes:
During a typical year, most actively managed mutual funds sell anywhere
from 20 to 70 percent of the securities in their portfolios. If your fund
makes a profit on its sales, you will pay taxes on the income you receive,
even if you reinvest the money you made.
Management risk:
41
When you invest in a mutual fund, you depend on the fund's manager to
make the right decisions regarding the fund's portfolio. If the manager
does not perform as well as you had hoped, you might not make as much
money on your investment as you expected. Of course, if you invest in
Index Funds, you forego management risk, because these funds do not
employ managers.
42
AMFI interacts with SEBI and works according to SEBIs guidelines in the
mutual fund Industry.
At last but not the least association of mutual fund of India also
disseminate
43
LIMITATIONS OF STUDY:
Every work has its own limitations. Limitations are extent to which the process
should not exceed. The following limitations for the project are:
1. Duration of project was not enough to make our conclusion on such a vast
subject. Time constraints has also become a major limitation
2. The sample size taken for drawing the conclusion was not sizeable
3. Investor ignorance was faced during discussions with respondents
Research has been done only at Rajasthan
Some of the persons were not so responsive.
Possibility of error in data collection.
Possibility of error in analysis of data due to small sample size.
44
PROJECT FINDINGS:
With booming market and falling interest rate of bank deposits, people see
mutual funds as an attractive financial tool which provide a high return rate
at lower risk as compared to equity market.
Young people these days are particularly more interested in mutual funds
because they see mutual fund as safe bet. Also these people have large
disposable incomes and risk taking capability too.
The bad part is people are still ignorant about mutual funds and different
schemes about mutual funds, hence it is very necessary to educate them
about mutual funds
Advertising can also play a major part as it has been seen that people buy
mutual fund looking at the brand name.
45
89
NO
11
TOTAL
100
46
b. By Intuition
Scientific Tools
47
By Intuition
53
Total
100
It has been observed that there is no major difference between the percentage of
people who invest using scientific tools and those whose who believe in their
intuition but it is seen that the younger generation is more leaning towards usage
of scientific tools than their peers.
47
77
NO
23
TOTAL
100
A major chunk who have been interviewed it has been observed that almost 80%
have some kind of insurance policy. It has also been observed that though LIC is
a public sector undertaking, people of all ages have more faith in it as compared
to other private sector companies.
48
49
NO
41
TOTAL
100
There is no major difference between the number of people who prefer keeping
their money in fixed deposit and who dont opt for it. There is however a growing
concern about the falling interest rate in banks on fixed deposit.
49
50
34
NO
66
TOTAL
100
It has been observed that only 34% they have invested in Bonds and Debentures
AS compared to those who have not. This may be due to less knowledge about it
or the time of re-demption.
51
45
NO
55
TOTAL
100
By the chart we observe that the percentage of people investing in equity and
share market is not much but there is a going interest among people especially
the younger generation to invest so as to make quick bucks with the market
boom.
52
88
NO
12
TOTAL
100
Only 12% of correspondent said they dont know any thing about mutual fund
and 88% said they know about mutual funds but what we found that they have
just a primary or very negligible knowledge about mutual funds and not really
aware of the concept called MUTUAL FUND.
53
15%
RISKY
25%
OTHERS
60%
TOTAL
100%
The percentage of person who say that mutual fund is safe is 5%, an those who
say it is risky is 25% but a major percentage of corresponds opt as other which is
about 60%. These are people who say that mutual funds are high risk and high
gain or even people who have no opinion.
54
BRAND NAME
35
HIGH NAV
26
HIGH RETURNS
15
ADVERTISING
12
OTHERS
12
TOTAL
100
It has been observed that brand name does matter when people are choosing a
mutual fund as 35% said brand name. The next is NAV at about 26%. These two
factors play a major role during selection of mutual funds.
55
Strengths:
1. Brand Name
2. Employees are highly empowered.
3. Strong Communication Network.
4. Good co-operation between employees.
5. Number 1 Registrar and Transfer agent in India.
6. Number 1 dealer of Investment Products in India.
7. Quality services provided to clients
8. All financial needs under one roof of
Weaknesses:
Low advertisements
Opportunity:
1. 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.
2. Marketing at rural and semi-urban areas.
3. Potential Market for investors
4. Tapping those people who are not satisfied with their existing
business.
5. More aware people intending to invest in markets with right
companies
56
Threats:
1. Increasing number of local players.
2. Past image of Mutual Fund.
3. Growing competition in this sector
57
7. 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.. We came to certain conclusion after
the study which is as follows:
1]
I concluded by this that research that services and returns got more
importance than goodwill.
I also conclude that many financial services at one place is the another reason of
its popularity
58
There is a general ignorance and questions about, what are mutual funds?
What are different schemes of mutual funds? How to invest in a mutual? And
many more. This thing should be handled by mutual fund companies and their
brokers to provide knowledge to their clients.
It has been seen that there is a major increase in the percentage of young
investors who have large amount of disposable income with them and want to
invest, these type of prospective clients should be tapped at an early stage.
Small towns, villages are still untapped and can also acts as an business area
of very huge potential.
Now even co-operative society can invest up to 10% of their capital in mutual
funds which open the door to new and very important client base.
59
APPENDIX
1. Are you a regular investor?
a. Yes b. No
2. Do you invest using
a. Scientific Tools b. By Intuition
3. What are your preferred investment priorities?
Name of Investment
Insurance
Bank
Bonds & Debentures
Equities & Share Market
PPF (Public Provident Fund)
NSC (National Saving Schemes)
Post Office Saving Schemes
Real Estate
Gold
Others
30% - 50%
d.
Above 50%
b. No
60
b. No
b. No
b. High NAV
d. Advertisement
e. Others
BIBLIOGRAPHY
Books:
1. Kotler Philip , Marketing Management (2009),
61
(Thirteenth Edition)
Edition)
3. Berman, Berry and Joel r Evans (Oct- 1997)
MAGAZINE
A) OUTLOOK BUSINESS (FEB, 2009)
B) BUSINESS STANDARD (April-July 2009)
C) 4PS OF BUSINESS AND MARKETING (June 2009)
WEB:
www.karvy.com
www.sundermutual.com
www.njindiainvest.com
www.moneycontrol.com
www.amfiindia.com
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national