2012

FACTORS AFFECTING INVESTMENT DECISIONS AND COMPETITIVE ADVANTAGES OF INDIABULLS

SHIKHA SINHA
INDIABULLS SECURITIES IBS HYDERABAD
5/26/2012

A REPORT ON

FACTORS AFFECTING INVESTMENT DECISIONS AND COMPETITIVE ANALYSIS OF INDIABULLS

SUBMITTED BY: SHIKHA SINHA 11BSPHH010767

A report submitted in the partial fulfillment of MBA Program of IBS Hyderabad

Submitted to: FACULTY GUIDE DR. P SHASHIKALA IBS HYDERABAD COMPANY GUIDE MR. ATISH GUPTA V.P., INDIABULLS

Date of submission:

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AUTHORIZATION

I, Dr. P Shashikala, hereby authorize the submission of the project work titled, “ Factors affecting investment decision and competitive advantage of Indiabulls”, undertaken by Ms. Shikha Sinha (Enrollment no. 11BSPHH010767) as partial fulfillment of MBA Program of IBS Hyderabad. This project work was executed under my guidance and no part of this project has been submitted for any degree or recognition before.

Sincerely, Dr. P Shashikala (Faculty Guide, IBS Hyderabad) Dated:

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Thanking You. Last but not the least all my friends and family for their support and co-operation. for providing me great insights about stock markets. real estate. Ankit Gupta. for guiding me all throughout and for being a great support. Mr. home loans and various other ventures. Shikha Sinha. Naveen and all members of Indiabulls family who were a great co-operation and help all throughout. P Shashikala.ACKNOWLEDGEMENT I hereby take this opportunity to thank INDIABULLS SECURITIES. I would like to express my sincere gratitude towards my company guide Mr. for providing me a corporate exposure through the course of my summer internship. Jadish Yadav. my faculty guide for instructing me and giving me her valuable advice on my project. Atish Gupta. Ashish Yadav. 11BSPHH010767 4|Page . I would also like to thank Dr. Mr. I would like to extend my gratitude to IBS Hyderabad. I am also like to thank Mr. Mr. for providing me such a platform.

rather than being a “me too” product. and so has the need for the marketing of financial instruments has intensified. “differentiate or die”.e. rather factors that make people invest in such institutions and in this regard what are the various differentiating factors that provide Indiabulls a competitive edge over other players in the market. intensified by the coming of Non Banking Financial Company (NBFC). Nonetheless all the operations of these institutions are covered under banking regulations. one which does not hold a license. like Indiabulls Securities.EXECUTIVE SUMMARY The increasing trend towards globalization and industrialization has increased the trend of competition in the financial market. i. There has been an emphasis on the various businesses and of Indiabulls that make it standout in this league. In words of Al Ries and Jack Trout. NBFCs are financial institutions are ones which provide banking services without meeting the legal definition of a bank. They are not allowed to take deposits from public. This project is completely focused to identify some of the demand drivers. 5|Page .

01 02 03 04-a b c d 05-a b c d e f g h i j k 06-a b c d e f g h i j k l m n 07-a 6|Page CONTENTS Authorization Acknowledgement Executive summary Introduction.TABLE OF CONTENTS SL NO.Background and Literature review Objective of project Methodology Scope and Limitations of study Financial industry overview Introduction to brokerage industry Porter‟s 5 factor model of industry Demand drivers of the industry Supply drivers of the economy Domestic economic conditions Global economic conditions Critical success factors of the industry Measures taken by Indian government PESTEL analysis of industry Fiscal and monetary policies (legal issues) Company overview-History Business life cycle Indiabulls group of companies Company financials Mission and vision Strategies and focus Marketing mix of Indiabulls SWOT of Indiabulls BCG of Indiabulls Porter‟s 5 factor model of Indiabulls Indiabulls in News Recent CSR done by Indiabulls Customer relationship Affect of market dynamics Factors affecting investment decisions PAGE NO. 3 4 5 9 10 11-12 13 14-15 16-18 19-21 22 23 24-25 26 27 28 29-30 31-32 33-34 35-37 38 39-40 41 41 42-46 47-48 49-50 51-54 55 56-57 58 59 60-62 .

b 08-a b c d e f 09 10 11 12 13 Factor Analysis and interpretation Comparison of Indiabulls brokerage services Different charges in the industry SWOT analysis of different firms Competition in real estate industry Competition in home loans Competitive advantage Conclusion and recommendation Outcome and contribution Learning from SIP References Appendix (Questionnaire) 63-68 69-71 72-81 82 83 84 85 86 87 88 89 90-91 LIST OF FIGURES AND TABLES Sl. CONTENT Research Methodology Methodology Products of financial market Classification of financial market Brokerage terminals in various areas Percentage of branches in each region Percentage of sub brokers in various regions Analysis of Porter‟s 5 factor model of the industry Indian economy‟s growth factors Stable and robust growth in face of global challenges Critical success factors of the industry Various measures taken by Indian Government PESTEL analysis PESTEL analysis of the industry Indiabulls at glance Business life cycle Pg. NO. NO. 11 12 14 15 17 18 19 24 26 27 28 29 30 33 35 37 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 7|Page .

17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 Journey of Indiabulls Indiabulls group of companies Indiabulls a leading finance company Asset growth of Indiabulls Products of Indiabulls Places of Indiabulls Promotion of Indiabulls SWOT of Indiabulls BCG of Indiabulls Competition in the industry Suppliers of Indiabulls Power Indiabulls in news KMO and Bartlett‟s test Variables used in the test Communalities Total variance explained Rotated component matrix Condensed/final factors Different brokerage charges in the industry Comparison of various rates Price comparison chart SWOT of Sharekhan SWOT of India Infoline SWOT of ICICI Direct SWOT of Motilal Oswal SWOT of Angel Broking Firm Competition in real estate Competition in home loans Housing Finance Companies competition 38 39 40 41 42 44 45 47-48 49 51-52 53 55 63 64 65 66 67 68 69 70 71 72-73 74-75 76-77 78-79 80-81 82 83 83 8|Page .

and then they evaluate their comfort zone in taking on risk. there exists an oligopoly (saying in book terms). Securities and Exchange Commissions’. one of the articles: investors first evaluate their current financial roadmap. in his work published on June 03. followed by piggy bank investing. products which are not properly differentiated or advertised just end up becoming a me too product. too many less differentiated products creates a kind of information overload. consider dollar averaging. According to him investors made the investment decisions in the ways like simple screening. entry and exit barriers and many more. strive to meet the investing needs of their clients. consider rebalancing portfolio occasionally. Consider an appropriate mix of investments. 1. Brokerages. also known as financial services companies. and in this clutter of too much information. 2010. According to U.BACKGROUND AND LITERATURE REVIEW The Securities Brokerage Industry is cyclical and comprised of two distinct types of businesses.S. Al Ries and Jack Trout. talked about how investors make investment decisions. 9|Page . characterized by tough competition. 2. then lateral recommendation. Jack Miller. and exchanges facilitate securities trading. To avoid it every marketer needs to position his/ her products in a way that makes a specific image in the minds of consumers. He broke the process of decision making in pulling the buy or sell trigger. and in the process also try to avoid the circumstances that can lead to fraud. In this market with less differentiated products and many players. create and maintain an emergency fund. in his work said “differentiate or die”. Net profits correlate to the performance of the broader equity market. 3.

OBJECTIVE OF THE PROJECT An increasing trend has been observed in demand for the services of Non Banking Financial Institutions nowadays. 10 | P a g e . There has also been emphasis to find out the plus points of Indiabulls or the differentiating factors that give Indiabulls a competitive edge.  To find out various competitive advantages that makes Indiabulls of the largest stock broking companies. In short:  To find out the factors affecting investment decisions in a NBFC. This project is aimed to find out factors affecting investment decisions in these firms.

For which I conducted a descriptive research. 11 | P a g e .METHODOLOGY This is a two dimensional project focusing on two aspects. Basically any research work proceeds as: Fig: 1  For this project my challenge was to find out the factors and the competitive advantages. For my project work I have focused on both primary and secondary data as well. as already mentioned (objectives).

 For rest my own analytical skill is used.  I have taken 11 factors in my survey so my population size is of 66.  For secondary data. I have collected primary data through questionnaire and survey. some reviews in economic times. who were customers. Fig: 2 12 | P a g e . general investors and company employees. I have targeted only investors.  A factor analysis has been run on the data to find the most influential factor. company records. data on moneycontrol site. some online research works have been referred.

who are brokers. demat accounts. 13 | P a g e . Due to time and resource constraints some important segment of population might have been missed out. Nowadays even the government is taking up steps to find such factors to give a boost to the Indian financial system. buying and selling of dematerialized securities. There may be redundancy of data or area surveyed. There may be interviewer bias or judgmental bias. how to make investment and how to track portfolio of investments. The project is aimed to cover maximum factors affecting the demand drivers and competitiveness.SCOPE OF THE PROJECT This project has been a great insight for me as I came to know about stock market. LIMITATIONS OF STUDY     The population size is limited to Hyderabad area.

lending.INDUSTRY OVERVIEW The Financial Market The financial industry or financial services industry includes a wide range of companies and institutions involved with money management. investing. insuring and securities insurance and trading services. The following institutions are a part of the industry:        Banks Credit card issuers Investment companies Investment bankers Securities traders Financial planners Security exchanges Products of the financial market: Fig: 3 14 | P a g e .

The major crises that have shaped the modern financial industry are:      The Great Depression(1929) Black Monday(1987) Asian Financial Crisis(1990) Stock Market Downturn(2002) Sub-prime Crisis(2007) The Classification of financial market in India Fig: 4 15 | P a g e .

the industry has found its way towards sustainable growth. 27% in derivatives. 4% in Chennai. Western region has maximum of 52%. With the purpose of gaining deeper understanding about the role of Indian stock broking industry.  On the basis of terminals 40% are located in Mumbai. and 5% in East. here are some data gleaned from analysis of secondary research. and 29% in other cities. 24% in South. 40%.e. 12% in Delhi. The industry thus has „monopolistic competition‟. Indian stock broking industry is the oldest trading industry that has been around even before the establishment of BSE in 1875. 7% in Kolkata. 31% trade in NSE. 65% between 1950-1995. and 10% in the East. 31% in West. In effect it is a fragmented industry with a large number of participants.THE BROKERAGE INDUSTRY The brokerage industry is currently characterized by a large number of companies (private or unorganized). On the basis of recent research:  On the basis of geographical concentration. in the country‟s economy. i. i. around 24% are located in the North.  From the study it was found that 36% of firms trade in cash. 34% trade in NSE. 26% trades in BSE. and 32% post 1995. 8% in Ahmadabad. 16 | P a g e . derivatives and commodities. Despite passing through a number of changes in post liberalization period.  In the cash market. and 43% in both.  Majority branches are located in North. Whereas in debt market. 14% in BSE.e. and 20% in cash. a large number of firms selling a slightly differentiated product.  3% of firms started broking operations before 1950. 13% in South. 45% in both.

11% in North. New Delhi from the North and Kolkata from the East.  In terms of IT penetration 62% firms provide their website.  Trading. 84% of firms have shown their interest in expanding their institutional clients. and 53% offering Mutual Fund transaction. Mumbai also has got the maximum representation in having the highest number of terminals. and 90% have email facility. 40% terminals are located in Mumbai while 12% are from Delhi. 67% IPOs. 8% from Ahmadabad. Fig: 5 17 | P a g e . Mumbai has got the maximum representation from the West. IPOs and Mutual Funds are the top three products offered by 90% of firms offering trading. 29% in West. Chennai from the South. and 34% are interested in setting up Joint Ventures in India and abroad.  In terms of various areas of growth. 66% firms intend to increase FIIs. 4% from Chennai and 29% are from other cities in India. and 4% in East. In terms of sub-brokers. around 55% are located in South. followed by 25% in the North. 7% from Kolkata. 13% in the South and 10% in the East. Brokerage terminals in various regions: Almost 52% of the terminals in the sample are based in the Western region of India.

with 31% branches. whereas East has around 4% of total sub-brokers. Fig: 6 Fig: 7 Analysis of brokerage industry based on Michael Porter’s 5 factor model 18 | P a g e . West and North follow. followed by the Western region. Around 24% branches are located in the South and East constitutes for 5% of the total branches of the total sample. with as many as 40% of all branches located there. In case of sub-brokers.Branches and sub-brokers in various regions: The maximum concentration of branches is in the North. with 30% and 11% sub-brokers respectively. almost 55% of them are based in the South.

deposits with exchanges. the smaller players were squeezed out of the business.  Potential of new entrants A new entrant in addition to the above also needs a reasonable level of capital to fund the working requirements of the business (finance to customers. However the brokerage industry is very cyclical and is impacted by activity levels in the markets. As a result there is a contrast consolidation happening in the industry. During the downturns such as 2008-2009 periods. etc). 19 | P a g e .Competition in the industry Potential of new entrants Power of suppliers Power of customers Threat of subsitutes Fig: 8  Competition The industry is now in a fairly high growth phase.

 Power of the supplier Not much relevant in most segments except investment banking. There is low level of customer lock-in and customer will move his or her business if the brokerage rates are not competitive with rest of the industry.The scale requirements are increasing constantly and as a result a new entrant will require higher levels of investments in the future to enter the business. it is likely to see many entrants in the industry. In a summary the industry has a moderate to low level of competitive advantage. it is likely that the smaller players will exit by selling out or closing. As a result the cost of adding an additional customer is low and per 20 | P a g e . where employees control client relationships and hence have to be highly compensated. The only competitive advantage for companies in this sector comes from size and scale which enables them to leverage their size to reduce average costs and thus make a profit on low brokerage margins. the industry has very low margin cost. In addition to high fixed costs.  Power of the buyers/customers This is important in the institutional brokerage business which involves high volume and low brokerage charges. As pointed out. On the contrary.  Threat of substitutes The products offered by all firms in this industry are more or less differentiated. else this is not applicable for this industry. Investing rather saving in the bank rather than investing in a brokerage firm can be one option. The extent of buyer power is very low to non-existent in all kinds of retail segments.

This segment will provide adequate returns in the future for a company with scale. or third party mutual funds.transaction costs are limited. 21 | P a g e . we are seeing a constant pressure on the brokerage rates has intensified the competition in the industry and is resulting in consolidation with the top players. The basic brokerage business is now sometimes a loss leader to enable the brokerage firm to acquire customers and sell other products such as wealth management services. Due to this reason.

which considers:  Potential yield The expectation of financial incentives or return on investment is a great demand driver which tempts people to invest or engage into transactions of the financial markets. so more will be the choices and access to alternatives to park ones resources. the more is information symmetry.DEMAND AND SUPPLY DRIVERS OF THE INDUSTRY Demands for financial products are driven by risk-reward assessment. Risk ratings are a vital point when making a decision to park ones resources into this industry. and so will be visibility and access to returns and so will be the expectation from this market increase along with investment.  Liquidity To maintain strong and flexible liquidity position people tend to invest in financial markets.  Availability of information The more disclosure.  Risk Rating Higher risks assumes higher profits and vice versa. 22 | P a g e . in order to meet their contingencies.  Access to alternatives More the disclosure in the market more will be the competition with more profits.

 Inflation Value of a currency appreciates and depreciates with the rates of inflation. fluctuations in interest rates can entirely fluctuate this industry. And will flourish with the ease of trade. the upsurge or downturn in the domestic and global economy is another supply driver which is beyond the control of any business firm. Various restrictions or duties or taxes may restrict the supply and may hinder the growth of this industry.  Government Regulations The attitude of the government towards the trade policies and various other financial firms and industry matters a lot. more will be the availability of financial services and products. 23 | P a g e . Inflation thus serves as a great supply driver in this market.  Economic conditions Rates of inflation.The major supply drivers are:  Money supply The supply of money has a big role to play in this industry. with great supply no doubt but borrowing or ascertaining the real market value may become difficult. the more the supply of money in this industry. Higher interest rate= will give higher returns. As in high inflation with higher supply of money there will be higher supply and vice versa.  Interest rates Interest rate determines the terms of trade.

The Brokerage industry Domestic Economic Environment In 1991. These included the Citygroup.GLOBAL AND DOMESTIC ECONOMIC ENVIRONMENT OF The financial industry According to global 2000 (annual report by Forbes). they lost a staggering $213 billion. pay and protect the transactions. in 2006 financial services generated $257 billion in profits. According to Fortune 500 rankings. such as Citygroup and Bank of America. Bank of America. may only be alive today just because of government money. down from 2006 high of $785 billion. Their combined revenue in 2007 was worth $647 billion. and JPMorgan Chase. In 2008. Trade and commerce across the world would come to standstill if there was no means to fund. 24 | P a g e . seven of the top 10 companies belonged to the financial industry. embarked on a programme of liberalization prompted by an acute balance-of-payment crisis. as Finance Minister in Narasimha Rao‟s government. a total swing of $470 billion. a third of total Fortune 500 profits. Manmohan Singh. The financial industry is an industry in itself as well as an ancillary that supports other industries. however. HSBC Holdings. Big players on the list.

 Access to international stock exchange.  Trading on hand held platform (mobile phones etc) allowed. Business restricted to friends and relatives. Significant increase in trade volumes. Indian Brokerage Industry 2009 onwards  Paradigm shift from transaction oriented to research/ portfolio based advisory. Low trade volumes.  Focus on franchisee based business model.No front or back office software.  Dematerialized accounts access for international trade.No derivatives trading allowed. Lack of investment in technology. National presence.  Margin funding for the retail clients. Investment in technology. 25 | P a g e .Front end and back end.Fig: 9 (Indian economy growth factors) Indian Brokerage Industry-Pre 2000      Post liberalization period. Settlement T+15 days.Derivatives trades play a major role. Indian Brokerage Industry 2000-2008      Venture capital funding for brokerage businesses. Integrated risk management system.

with significant risks remaining.  India has achieved a long-term competitive transformation. but the next stage of development will be more challenging.Current Global Economic Environment  The global economy is slowly recovering from a deep recession. Stable and robust growth in face of global challenges Fig: 10 26 | P a g e .  Countries are looking for ways to achieve sustainable economic growth and job creation.  Competitiveness has become more important than ever -Globalization will continue and strong international competitors are emerging. -Companies are re-examining everything in terms of how and where they operate.

By people it indicates to the service providers or the employees of the various firms of this industry. who day in and day out interact with the customers and provide them services and satisfy them.Critical Success Factors of the Industry Fig: 11 Seeing the overall brokerage as a single unit. This serves as a great success of the brokerage industry. the key success factors or the winning strategy of Indian Brokerage Industry is a mixture of:  People  Process  Technology There are the three ingredients that together create value for both international and domestic customers. Technology enables to stay competitive and on edge with the competitors. 27 | P a g e . facilitating the ease of processes and speed and to maintain and be up to date. All these factors together help create value to the customer. And the government support even still plays a very vital role in forming the rules and norms of such processes. Transparency of the process followed and disclosure method is yet another success factor. The settlement of transactions is generally done in a process of T+2 days.

Provide a standard framework for operations.   Facilitate market integration and give freedom to the companies. Investor protection Making PAN compulsory Strengthening KYC (Know Your Client) Fig: 12 28 | P a g e . Investor protection. BSE and NSE to set up and maintain corporate bond reporting platforms To capture all information relating to trading. Reduces the conflict of interest. Bring Indian market at par with the international standards and diversify product portfolio. Access to more funds for investment. OBJECTIVES Liberalization of stock market to attract foreign investment in order to boost economic growth. Expanding the product range offered by the stock exchanges. Deregulation. Allowing Indian companies to issues ADRS and GDRS. Divestment of government ownership Facilitate growth through privatization Strengthening of institutional framework in primary and secondary markets Demutualization      To ensure transparency.VARIOUS MEASURES TAKEN BY INDIAN GOVERNMT TO IMPROVE THE SITUTATION OF INDIAN STOCK MARKET MEASURES Allow foreign institutional investors to invest in equity and debt markets. Allowing Indian companies to invest abroad.

PESTEL ANALYSIS OF BROKERAGE INDUSTRY PESTEL analysis stands for "Political. and gives an overview of the different macro environmental factors that the company has to take into consideration. population growth rate. labour law. environmental law.  Economic factors include economic growth. career 29 | P a g e . Social. potential and direction for operations. Economic. Fig: 13  Political factors are how and to what degree a government intervenes in the economy.  Social factors include the cultural aspects and include health consciousness. political factors include areas such as tax policy. interest rates affect a firm's cost of capital and therefore to what extent a business grows and expands. Specifically. age distribution. interest rates. business position. and political stability. It is a useful strategic tool for understanding market growth or decline. These factors have major impacts on how businesses operate and make decisions. It is a part of the external analysis when conducting a strategic analysis or doing market research. Environmental and Legal analysis" and describes a framework of macro-environmental factors used in the environmental scanning component of strategic management. For example. tariffs. exchange rates and the inflation rate. trade restrictions. Technological.

 Environmental factors include ecological and environmental aspects such as weather. antitrust law. Trends in social factors affect the demand for a company's products and how that company operates. consumer law. which may especially affect industries such as tourism. They can determine barriers to entry. technology incentives and the rate of technological change. These factors can affect how a company operates.attitudes and emphasis on safety. climate. and health and safety law. technological shifts can affect costs. Furthermore. farming. quality and lead to innovation. Fig: 14 30 | P a g e .  Legal factors include discrimination law. automation. minimum efficient production level and influence outsourcing decisions. its costs. and the demand for its products. employment law. and insurance. and climate change.  Technological factors include technological aspects such as R&D activity.

LEGAL ISSUES WITH A BROKERAGE FIRM Securities Exchange Act of 1934 (Exchange Act) In contrast to the Securities Act. and issuers). To protect investors. The Fed is responsible for establishing and enforcing monetary policy and for regulating the amount of credit outstanding. The Exchange Act operates somewhat differently from the Securities Act. the Securities Exchange Commission (SEC). the Exchange Act provides for direct regulation of the markets on which securities are sold (the securities (stock) exchanges) and the participants in those markets (industry associations. Financial markets. The fed 31 | P a g e . the Exchange Act primarily regulates transactions of securities in the secondary market .  Federal Reserve System The Federal Reserve System is a government institution created to administer nation‟s credit and monetary policies and to oversee the banking industry as well as certain aspects of the broker activity. depositors. Monetary and Fiscal Policies In the securities industry there exist regulators who have established a set of rules and regulations that administer the entire industry. and the Office of Comptroller of the Currency. clearing houses. Congress crafted a mandatory disclosure process that is designed to force companies to make public information that investors would find pertinent to making investment decision. brokers. In addition.that is. they are: the Federal Reserve System. The 3 major US government agencies that govern the securities industry and frame monetary and fiscal policy. and vendors work together to regulate the investment in the industry. such as trades that retail investors execute through brokerage firms. such as credit. These transactions often take place between parties other than the issuer. sales that take place after a security is initially offered by a company (the issuer).

32 | P a g e . The SEC is an independent bipartisan. The laws administered by SEC deal with securities and finance and seek to provide protection for investors in their securities‟ transactions. and the liquidations of national banks.does this by establishing the bank discount rates and the rules for credit. quasi-judicial agency of the government.  Securities Exchange Commission The Securities Exchange Commission (SEC) is the primary regulatory agency that oversees the securities industry. The market‟s response to the Fed‟s determination to control inflation by raising and lowering the discount rate affects long term interest rates. bank mergers involving national banks. The OCC must approve the establishment of new national banks.  Office of the Comptroller of the Currency The Office of the Comptroller of the Currency‟s (OCC) principal function is supervising the national banking system. which have a significant impact on the securities‟ market.

COMPANY OVERVIEW

Fig: 15

History of Indiabulls In middle of 1999, when e-commerce was just about starting in India, Sameer Gehlaut and his close IIT Delhi friend Rajiv Rattan got together and bought a defunct securities company with a NSE membership and started offering brokerage services. A Few months later, their friend Saurabh Mittal also joined them. By December 1999, the company embarked on its journey to build one of the first online platforms in India for offering internet brokerage services. In January 2000, the 3 founders incorporated Indiabulls Financial Services and made it as the flagship company. In mid 2000, Indiabulls Financial Services received venture capital funding from Mr. L.N. Mittal & Mr. Harish Fabani. In late 2000, Indiabulls Securities, a subsidiary of Indiabulls Financial Services started offering online brokerage services and simultaneously opened physical offices across India. By 2003, Indiabulls securities had
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established a strong pan India presence and client base through its offices and on the internet. In September 2004, Indiabulls Financial Services went public with an IPO at Rs 19 a share. In late 2004, Indiabulls Financial Services started its financing business with consumer loans. In March 2005, Indiabulls Properties Private Ltd, a subsidiary of Indiabulls Financial Services, participated in government auction of Jupiter Mills, a defunct 11 acre textile mill owned by NTC in Lower Parel, Mumbai. Indiabulls Properties private Ltd won the mill in auction and that purchase started Indiabulls real estate business. A few months later, Indiabulls Real Estate company Pvt. ltd bought Elphinstone mill in Lower Parel, another textile mill auctioned by NTC. With real estate business gaining size, Indiabulls Financial Services demerged the real estate business under Indiabulls Real Estate and each shareholder of Indiabulls Financial Services received additional share of Indiabulls Real Estate through the demerger. Subsequently, Indiabulls Financial Services also demerged Indiabulls Securities and each shareholder of Indiabulls Financial Services also received a share of Indiabulls Securities. In year 2007, Indiabulls Real Estate incorporated a 100% subsidiary, Indiabulls Power, to build power plants and started work on building Nasik & Amravati thermal power plants. Indiabulls Power went public in September 2009. Today, Indiabulls Group has a net worth of Rs 16,796 Crores & has a strong presence in important sectors like financial services, power & real estate through independently listed companies and Indiabulls Group continues its journey of building businesses with strong cash flows.

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BUSINESS LIFE CYCLE OF INDIABULLS

Fig: 16 The business life cycle is a model that enables businessmen to identify the level of performance at which their business is operating and to determine exactly what needs to be done to move to the next level. The various levels of a business life cycle are:      Start up Rapid Growth Maturity Decline Re-birth/ death

The startup of Indiabulls Indiabulls was in start up phase in the year 1999. Sameer Gehlaut, Rajiv Rattan and bought a defunct securities company with NSE

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membership and started brokerage services. Saurabh Mittal joined the founders. -The founders were usually involved in running the business. -The primary emphasis was on generating and selling offline brokerage services. -There was less staff with modest pay in the industry, which provided personalized services. The rapid growth stage Indiabulls success geared up quite early, within one year of its inception in 2000. -Indiabulls Financial Services received venture capital funding from Mr. L. N. Mittal and Mr. Harish Fabani and started online brokerage services. -It opened many physical offices all across the country thereon and made pan India presence. - Went public in 2004 (IPO was Rs. 19 per share) and also started providing customer loan in the same year. -Became a private ltd. in the year 2005. Participated in government auction and bought Jupiter mills to start its „real estate business‟, and so on. -In 2007, started „Power Indiabulls‟. Indiabulls by this time had a huge customer base, with wide number of physical offices. Its sales and demand increased and it made its presence greatly visible in the financial and other markets.

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Maturity stage Indiabulls is still in the process of reaching the maturity stage. Its financial services and signature account services are in their boom phase and are expected to reach there the earliest. With its current pace of developments, expanded and loyal customer base, constant research and development, and other initiatives Indiabulls is sure to reach the maturity stage as a market leader very soon. And so will increase its profitability and side by side will its competition in the market. Decline/Re-birth With an upsurge in demand for financial services. NBFC‟s like Indiabulls have a great opportunity to develop and expand in the market with its current potentials and probably will never reach this stage unless it gives up to its competitors in the maturity stage.

JOURNEY OF INDIABULLS

Fig: 17
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INDIABULLS GROUP OF COMPANIES Fig: 18 38 | P a g e .

844 Crs  Total group PAT for FY 10-11: Rs 944 Crs  Total group capital expenditure: Rs 6.16.  For its ongoing projects Indiabulls groups customers 385 MTs of steel.4 bn) capex in financial year 10-11.5 bn) in the FY 2014-2015. and 1700 CUM of RMC on daily basis. Planned capex of 29000 (us $ 6. 550 MTs of cement. INDIABULLS IS A LEADING FINANCE COMPANY Fig: 19 39 | P a g e .  Creating value for shareholders: Dividend payout of 232 Crs in FY 10-11.  Focus on execution and on the ground results translating into profits.200 CRs (US $ 1.COMPANY FINANCIALS  Total group net worth: Rs.

over 1300 people to promptly attend to prospective customers.  Company continues to grow its branch networks and now has 170 branches across the country.  Company has well trained „in house direct sales team‟. 40 | P a g e . over last 9 quarters with a decrease in non-performing assets.  Long duration mortgage loans have lead to steady asset growth and increase in Net Asset Income. 2000 Crs.ASSET GROWTH Fig: 20  Assets have grown at a quarterly average of Rs.

MISSION AND VISION  MISSION: Rapidly increase the number of client relationships by providing a broad array of products offering to emerge as a clear market leader.  VISION: To be the largest and most profitable financial services organization in Indian market and become one stop shop for all non banking financial products and services for the retail customers. finance and power). target of US $ 1. 41 | P a g e .  GOAL FY 2013/2014. STRATEGIES AND FOCUS  CONSOLIDATION Aim to be among the top 3 players in existing products within next 3 years.4 bn in cash generation from 3 companies (real estate.  NO CAPITAL MARKET FUND RAISING All businesses are well funded to achieve growth and size. Avoiding excessive debt from the capital market.  NO NEW PRODUCTS Focus on gaining size and scale in existing core products.

PIB provides an integrated online trading platform for the internet trading community to invest in equity. News Room. c) Depository Services Indiabulls is a depository participant with the National Securities Depository Limited and Central Depository Services (India) Limited for trading and settlement of dematerialized shares. b) Indiabulls Signature account Indiabulls Signature account caters to remain on top of your investments. each developed to cater to internet trading users‟ distinct needs. Online IPOs and base their decision on sound fundamental research and technical analysis. the Indiabulls Signature account comes bundled with a variety of exclusive features.MARKETING MIX OF INDIABULLS Being a service industry Indiabulls will have 7P‟s rather than 4. PIB comes with a whole host of online features for the internet trading users ranging from real-time stock prices. It provides you the platform to trade in Equity and Derivatives. to live trading reports. It also provides various kinds of trading reports. they are: PRODUCTS Fig: 21 a) Power India bulls (PIB) PIB is the advanced online trading platform from Indiabulls Securities Limited. F&O. With an unmatched service and nationwide presence. PIB provides the best in the class internet trading features and delivers a seamless and rich online trading experience for its users. Indiabulls performs clearing services for all securities transactions through its 42 | P a g e . charting.

2% (intraday). Currency Derivatives Contracts (USD-INR. Indiabulls Depository Services is part of our value added services for our clients that create multiple interfaces with the client and provide for a solution that takes care of all your needs. 1350 for opening a demat account (900 account opening charges + 450 DP charges + 750 for software (optional)). The Mark-to-Market for Currency Derivatives is settled on a daily basis in a manner similar to Equity Futures & Options.accounts.3% to 0. At any given time.75 (fluctuating) to salaried people and 12% (fluctuating) to non-salaried professionals. It caters to both the service and enterprise segment of customers. GBP-INR and JPY-INR) at exchange rate as the underlying are available for trading with a monthly expiry.2% (delivery) and 0. The market for Currency Derivatives is open from 9 A. Currency Derivatives Contracts are available for trading for the next 12 months expiry for futures whereas 3 months expiry and 1 quarterly expiry for options. Indiabulls provides home loans @ 10. d) Currency Derivatives Indiabulls offers trading in the Currency Derivatives Segment in NSE.M to 5 P.M (Monday to Friday). 43 | P a g e . Currency Derivatives are similar in nature to Stock Futures & Option contracts. It charges brokerage of: 0. The brokerage ranges from 1paise to 20paise or 3paise to 30paise. We offer depository services to create a seamless transaction platform – execute trades through Indiabulls Securities and settle these transactions through the Indiabulls Depository Services. Indiabulls charges Rs. EUR-INR. PRICE Indiabulls has various models at different price ranges targeted at a particular market segment.

Kolkata. Bangalore. Chennai. namely Delhi.The price of real estate fluctuates from location to location. residential or commercial plots. and according to the size of the flat. Nasik and many other Indian cities. PLACE Indiabulls has its offices at all major cities. Ahmadabad. Fig: 22 44 | P a g e . Mumbai. Hyderabad.

PROMOTION Indiabulls does its promotion through news papers. They provide excellent and time to time services. magazines. Fig: 23 PEOPLE This includes the employees of the organization. 45 | P a g e . The employees are given importance in the organization because a satisfied employee creates a satisfied customer. The employees of Indiabulls have expertise in the field and are well versed in all the tricks of the trade. through websites and television ads.

and the customers are explained the norms and sale is closed. PHYSICAL EVIDENCE Different branches of Indiabulls have a very professional and formal atmosphere. This may be one of the reasons why the employees like to spend time in office and generate high productivity. 46 | P a g e . The employees then approach interested customers. negotiation of sales is done. they are made aware of new beneficial offers from time to time. First the sales lead is generated by the employees and sales calling is done on that database. Continuous services and assistance is provided to existing customers.PROCESS A hierarchical process is followed for execution of all services. The work environment is very good.

• It does not provide indices on major world markets. • Equity analysis reports to support its clients. ICICI. etc Weaknesses • It should have its own mutual funds asit provides advises on mutual funds. • Position to answer the questions of the clients in their fields. • Provides competitive brokerage and DP charges. • Diverse branches and networks provide a great oppourtunity to cater tapped and untapped market as well. Weaknesses (limitations).SWOT ANALYSIS OF INDIABULLS This is a strategic planning method to evaluate the Strength. • Real time online transfer of funds and exposure facility with HDFC. Opportunities and Threats involved in a project or business venture. It involves specifying the objectives of the business venture or project and identifying internal and external factors that are favorable or unfavorable to achieve it. • Lacks banking arm 47 | P a g e . Citybank. Strength • Online trading platform. ADR prices of Indian scripts. • Both online and offline trading facility. This technique is credited to Albert Humphrey of Stanford University.

• High client base will help for cross sales of its products. • Local brokers capable of charging lower brokerage. • Tie-ups with third party companies for selling products. • Government regulations Fig: 24 48 | P a g e . Threats • Companies like Sharekhan. • Banks with demat facilities are jockeying for position. • ATM facility should be provided for easy withdrawals. Kotak Securities. • It is registered with Luxemberg Stock Exchange so can target other stock exchanges also. • Changes in SEBI guidelines and other tax implications.Oppourtunities • Financial services like mutual funds and insurance. ICICI Direct. and private brokers are major threats.

BCG MATRIX OF INDIABULLS Companies that are large enough to be organized as strategic business units face the challenge of allocating resources among these units. In the early 1970‟s Boston Consultancy Group developed a model to manage the portfolio of these business units (or major product lines). market share relative to competitors. BCG MATRIX OF INDIABULLS Fig: 25 49 | P a g e . The BCG growth share matrix displays different business units on a graph of market growth rate vs.

net profits of Indiabulls Financial more than doubled to Rs.com/Real_estate_sector_in_india.  Cash Cows None of the companies of Indiabulls comes in this category.  Stars Indiabulls Real Estate and Indiabulls Financial Services Indiabulls Real Estate can be considered to be in the Star category. Financial services sector in India grew at 8 % last year but had a steady growth rate of 15% for the last few years. It is considered star as it has a high market growth rate and enjoys a high market share as well. Though broking industry is expanding by 12-15% annually. (www. Indiabulls Securities also comes in this category due to pertinent competitors like Sharekhan. Karvy Stock Broking and others. 743 Crores. 201.sethassociates. For FY 2011. Indiabulls Securities is not able to cope with this high pace.32 Crores in 2010-2011 from 6.75 Crores in the preceding year.com/ibgroup/media.htm). Real Estate sector in India is growing at 34% annually (www. Question Marks Indiabulls Retail and Indiabulls Securities Indiabulls Retail (Now known as „Store One‟) can be classified as question mark as it is new to the market and need to compete with established retailers like Future Group and K Raheja Group to gain market share.indiabulls. Its profit rose to Rs.php) while growth of Indiabulls Real Estate has surged to 97%.  Dogs None of the companies of Indiabulls comes in this category 50 | P a g e .

this model identifies and analyses 5 competitive forces that shape every industry and determines industry‟s weaknesses and strength. Porter.PORTER’s 5 FACTOR MODEL OF INDIABULLS Named after Michel E. They are:  Competition in the industry Indiabulls faces competition from various firms like: 51 | P a g e .

Fig: 26 52 | P a g e .

who for obvious reasons have great bargaining power and offers from competitors also. Threat of new entry is high when:  Capital requirements to start the business are less  Few economies of scale are in place  Customers can easily switch (low switching cost)  Your key technology is not hard to acquire or isn‟t protected well  Your product is not differentiated Power of suppliers Indiabulls Group has very high profile corporate suppliers. This new trend poses for new threats also. Some of suppliers of Indiabulls Group (PIB) are: Fig: 27 53 | P a g e . The operations largely depend on these supplies. this may be either the entry of local players who can provide lower rates or a very big player who can enter into a price war.Potential of new entrants The market for Non Banking Financial Companies or rather broking houses are flourishing.

Suppliers are more powerful when:  Suppliers are concentrated and well organized  Few substitutes available to suppliers  Their product is most effective or unique  Switching cost. commodities. The threats which lies here are:  Too many goods chasing too few consumers. from one suppliers to another.  Buyer‟s cost of switching to a competitors‟ product is low.Bargaining Power of supplier means how strong is the position of a seller. 54 | P a g e . is high  You are not an important customer to Supplier Power of customers Customer is the king of the market. etc. Threat of substitutes Indiabulls poses great threat of substitutes like people of low risk appetite would like to invest in bank rather than in share market. Products offered by Indiabulls are unsought in nature and are industry dependent. real estate. Its products can very well be substituted by substitutes offered by competitors.  Shopping cost is low. They have a lot of options while planning to purchase products.  Credible Threat of integration.  Buyer purchases in bulk quantities and are mostly corporate clients.  Product is not much differentiated.

INDIABULLS IN NEWS Fig: 28 55 | P a g e .

accelerated phase and blast crisis for both pediatric and adult patients.enrolls patient under this program after diagnosis.independent NGO – Assist patient throughout the program in completing formalities & procurement of medicines. and based on the accessed income. Indiabulls Financial Services independent body for financial evaluation of patient. Indiabulls has taken up this noble project named „Novartis Oncology Access‟. Indiabulls as financial partner is helping them access actual income of the patient and their families.Drug Access Program for cancer patients in partnership with Novartis As a part of its deep commitment to social causes. Novartis are the developers & makers of Glivec. dispenses drugs to patients & manage drug inventory.RECENT CORPORATE SOCIAL RESPONSIBILITY BY INDIABULLS THE NOA PROGRAM Indiabulls CSR Initiative . 56 | P a g e . recommend the drug donation slabs as per approved guidelines. The MAX Foundation.a medication for the treatment of Ph+ chronic myeloid leukemia (CML) in chronic phase. in partnership with Novartis (drug manufacturing company) and Max Foundation (NGO). This program is run by Novartis along with its partner Physicians. NOA program: The NOA program is a drug access program for to help patients who have been prescribed Glivec and Tasigna but cannot afford to pay for the entire treatment cost. collection & safekeeping the submitted documents with confidentiality and outlets – Independent pharmacist. This drug is also indicated for adult patients with specific conditions.

a well-established international guide often used as eligibility criteria for determining access to drug assistance programs. field verification. The foundation also aims to work at a district level on transformation projects specifically in the areas of education and healthcare infrastructure. for treatment of life threatening diseases. In FY 2010-11. The analysis bases on income levels assessment by way of financial evaluation. ACCORDING TO 12th ANNUAL REPORT OF MARCH 2011-12 DIRECTOR’S REPORT IN ECONOMIC TIMES . personal discussion with patient/ care taker & guidelines as per standard operating procedure (SOP) which is prepared by Novartis based on the WHO guidelines for drug donation programs using Business for Social Responsibility‟s (BSR) cost of living index.8 Cr to Indiabulls Foundation. 57 | P a g e .Indiabulls Foundation plans to set up a hospital for the poor. Based on the family composite Income a suitable donation decision is given. .Indiabulls Financial Services: As a NOA partner Indiabulls are performing task of the local credit evaluation agency which works as an independent and unbiased body for the financial analysis and assessment of the patient and family members‟ earning capacity to afford medical expenses on critical disease.Other CSR Initiatives: the Company has partnered with Novartis to launch a "Drug Access Programme" for Cancer Patients. the Company has contributed Rs. .The Company will actively support Indiabulls Foundation. 8. Indiabulls lends its expertise by assessing the financial status of the patients to approve access to Free Drugs under the programme. living standard.

Relationship managers are always there to take care of all such affairs. Indiabulls maintains a great customer. Also if there is any new product or scheme old customer is always called before sales call is made to the new ones. 58 | P a g e . Continuous follow ups call are made time to time to remind customers for any kind of dates or investments is to be made. discounts and exemptions to existing customers. The dedicated workforce is always at the service of the customer at the very first call. Customer retention being of great importance in such market where margin is usually low and profit mainly comes due to scale of operations. There is guidance at each step. Not only customer retention important but clients new to the market are also given great importance.CUSTOMER RELATIONSHIP With a great team of highly motivated staff. There are always schemes.

There is great shift in the Indian consumption pattern that is being observed like:  69% of the population is less than 35 years of age and has spurred consumption demand. or changing. Market dynamics is a fundamental concept in supply. price signals that result from the continual changes in both supply and demand of any particular product or group of products. Among 60% of firms there expect a rise in activity while The above factors along with many other factors are some of those market dynamics which greatly affect this market.MARKET DYNAMICS The pricing signals that are created as a result of changing supply and demand level in a given market. 59 | P a g e . Russia. Market dynamics describe the dynamic.  The growth potential of the services sector in India is enormous at $200 billion offering employment to 40 million people.  High savings and investment rate (over 35% of GDP). India‟s manufacturing base is the fourth largest globally.  India‟s manufacturing growth is amongst the fastest in the world.  54% of the population is in the working group. China and India service sector. The confidence of a robust growth in the services sector is the highest in India among the 4 BRIC countries including Brazil. demand and pricing economic models.

he usually panic when confronted with unexpected losses and abandon their investment plans mid-stream and suffers huge losses. If the time horizon is short. The length of time you will be investing is important because it can directly affect your ability to reduce risk. the investor has greater liquidity needs some attractive opportunities of earning higher return has to be sacrificed and the result is reduced in return. such as those from bonds and dividendpaying stocks. Younger investors who are accumulating savings will want returns that tend to emphasize growth and higher total returns. If an investor is risk averse and he takes too much risk. which primarily are provided by equity shares. a conservative investor remains risk averse over his life-cycle. While some people do become more risk averse as they get older.  Return Needs This refers to whether the investor needs to emphasize growth or income.FACTORS AFFECTING INVESTMENT DECISIONS There are a numerous reasons that affect investment decisions here are some of them:  Risk Tolerance Risk refers to the volatility of portfolio‟s value. Longer time horizons allow you to take on greater risks with a greater total return potential because some of that risk can be reduced by investing across different market environments. many individuals may want a blending of the two Þ some current income. but also some growth. The amount of risk the investor is willing to take on is an extremely important factor. Retirees who depend on their investment portfolio for part of their annual income will want consistent annual payouts. Of course. 60 | P a g e .  Investment Time Horizon The time horizon starts when the investment portfolio is implemented and ends when the investor will need to take the money out. An aggressive investor generally dares to take risk throughout his life.

 Opportunity created by technological change Technological changes create new equipment which may represent a major change in process. a firm cannot survive. so that there emerges the need for reevaluation of existing capital equipment in a company. but is often not given due consideration. A proper evaluation of this aspect is necessary. In this connection. In some industries where the product being manufactured is a simple standardized one. others will have no such preference.  Management Outlook lf the management is progressive and has an aggressively marketing and growth outlook. the existence of the company not following suit would be seriously threatened. we may note that the cost of new equipment is a major factor in investment decisions. This reaction to a rival's policy regarding capital investment often forces decision on a company'. Tax Exposure Investors in higher tax brackets prefer such investments where the return is tax exempt. If competitors continue to install more equipment and succeed in turning out better products. 61 | P a g e . Sometimes the old equipment which has to be replaced by new equipment as a result of technical innovation may be downgraded to some other applications. In contrast. The management has to be progressive and innovation must be encouraged in such cases. Some changes may justify new investments. in industries such as chemicals and electronics. if it follows a policy of 'makedo' with its existing equipment. it will encourage innovation and favor capital proposals which ensure better productivity on quality or both.  Competitor’s Strategy Competitors' strategy regarding capital investment exerts significant influence on the investment decision of a company. innovation is difficult and management would be extremely cost conscious.

or it may show that the purchase of capital assets now may generate the demand for major capital additions after two years and such expenditure might clash with anticipated other expenditures which cannot be postponed. one year. Let us take one more example.  Fiscal Incentives Tax concessions either on new investment incomes or investment allowance allowed on new investment decisions. the cash flow budget shows the timing of cash flows for alternative investments and thus helps management in selecting the desired investment project. Secondly. these factors give tangible results and do influence investment decisions. The effect would be reduced absenteeism and increased productivity.  Non-economic Factors New equipment may make the workshop a pleasant place and permit more socializing on the job. Even then. In order to participate in long-run forecast for market potential critical decisions on capital investment have to be taken. 62 | P a g e . It may be difficult to evaluate the benefits in monetary terms and as such we call this as non-economic factor. the analysis may indicate that a company may acquire necessary cash to purchase the equipment not immediately but after say. the method for allowing depreciation deduction allowance also influence new investment decisions. Suppose the installation of a new machine ensures greater safety in operation. Market Forecast Both short and long run market forecasts are influential factors in capital investment decisions. It is difficult to measure the resulting monetary saving through avoidance of an unknown number of injuries.  Cash Flow Budgets The analysis of cash-flow budget which shows the flow of funds into and out of the company may affect capital investment decision in two ways. 'First.

FACTOR ANALYSIS BASED ON FACTORS AFFECTING INVESTMENT DECISIONS Factor analysis is a data reduction/summarization technique.891 i. the test is considered to be significant. then the null hypothesis is rejected. there is multi co-linearity. Generally factor analysis is used where multi co-linearity exists.5 to 1‟. so we can proceed with factor analysis.e. Bartlett’s Test Using Bartlett‟s test of sphericity we test the null hypothesis. KMO and Bartlett’s test Kaiser-Mayer-Olkin (KMO) test is to test the appropriateness of the factor analysis. 63 | P a g e . more than 0.e.5. if the value is between „0. Generally in market research there are many factors/variables which are correlated which needs to be reduced to manageable levels. For factor analysis to run the null is that the correlation matrix is an identity matrix. Fig: 29 The factor analysis stands to be appropriate as KMO is 0. i.5. if the significant value is <0.

Calculated value: 758. r=1) and un-correlated to others (i. (i.For Bartlett‟s test: Null hypothesis: the variable is only correlated to itself. Variables used in the project are: No. (sign used) Variables Income Market Situation Company Risk Appetite Management Outlook Market forecast Financial Incentives Cash-flow Budgets Non-economic Factors Age Factor Other Factors Fig: 30 V1 V2 V3 V4 V5 V6 V7 V8 V9 V10 V11 64 | P a g e .e. r=0).5. the variables are correlated. Alternate hypothesis: all the variables are correlated to each other.e.225 Analysis: the null hypothesis is rejected as the significance level is less than 0. Hence.

Communalities: Fig: 31 Extraction Method: Principal Component Analysis Principal Component Analysis works on the assumption that all the variance is common. After extraction table shows shared variance of each variable in all the factors. therefore before extraction all communalities are 1. 65 | P a g e .

The first factor will always account for the most variance (and hence it has the highest Eigen value). Factor Component: The initial number of factors is the same as the number of variables used in the factor analysis.Total variance explained Fig: 32 Extraction Method: Principal Component Analysis. not all 11 factors will be retained. which means that each variable has a variance of 1. 66 | P a g e . and so on. in this case its 11. Total: This column contains the Eigen values. % of Variance: This column contains the percent of total variance accounted for by each factor. Because the analysis is conducted based on a correlation matrix. In this project only 1st 2 factors will be retained. and the total variance is equal to the number of variables used in the analysis. Initial Eigen Values: Eigen value is the variance explained by each factor. each successive factor will account for less and less variance. and the next factor will account for as much of the left over variance as it can. Hence. However. the variables are standardized.

because due to standardization. Component Matrix In this approach.Cumulative %: This column contains the cumulative percentage of variance accounted for by the current and all preceding factors. the number of variables is 11 so to select the number of factors. Rotated Component Matrix Fig: 33 Extraction Method: Principal Component Analysis. Factors with variance less than 1 are no better than a single variable. Eigen value method is the best method. Rotation Method: Varimax with Kaiser Normalization. 67 | P a g e . each variable has a variance of 1. Rotation is converged in 3 iterations. Here. If numbers of variables are less than 20 this approach will result in a conservative number of factors. factors only with Eigen value more than 1 are retained.

From the Component Matrix we can identify all variables which come under a particular factor. Here‟s a depiction of it: Factor Personal/Internal Factors       What it explains Income Risk appetite Financial incentives Non-economic factors Age factor Others Market Situation Market forecast Management outlook Company Cash flow budgets External Factors      Fig: 34 Thus there are some internal and external factors that affect a person‟s investment decisions.As a result of the Factor Analysis the 11 variables are condensed to 2 factors. 68 | P a g e .

COMPARISON OF INDIABULLS BROKERAGE SERVICES COMPARISON OF DELIVERY AND INTRADAY *MMC – Minimum Monthly Charges. Fig: 35 69 | P a g e .

Brokerage. -J2 ME windows. ETF. iphone. and Derivatives. dedicated dealer desk at every city. Mutual Funds. blackberry. IPO. contract note on paper. FD. QUALITY OF SALESPERSO N Good Good Good Good Good PROCESS T+2 days T+2 days T+2 days T+2 days T+2 days T+2 days Fig: 36 70 | P a g e . and NRI offerings. Brokerage. . features and options. Home loans. Brokerage and banking services. IPO. Mutual Funds. Brokerag e-e and banking services. 1p-10p ( min) ICICI KOTAK INDIABULLS BROKERAG E MINIMUM AMOUNT 5p to 50p 3p to 25p 4p to 40p 2p to 20p or 1p to 10p (min) Rs 10000. Good Call and trade. Commodit ies. IPO. Online and Offline Trading available on all phones. trade on mobile. Commodity. IPO. SERVICES Brokerage services. Trade Tigers. mutual funds. android. Rs 0 (for big corporate clients) Rs 799 Rs 10000 Rs 50000 Rs 0 Rs 10000 Rs 0 MINIMUM OPENING CHARGES PRODUCTS Nil Rs 200 Rs 555 Rs 550 Rs 1350 -Equity. and ODIN Software. online and offline services for different time zones. Mutual Funds. call and trade. IPO. mutual funds.Call and trade. -Do it yourself systematic investment planning. loans. IPO. No extra charges on calls from clients.COMPARISON OF VARIOUS RATES FIRMS FACTOR HDFC SHAREK HAN 5p to 25p MOTILAL OSWAL 5p to50p. Real Estate. MF online. and Commod ities K-25 and T-25. and -NRI offerings. ETF. online.

PRICE COMPARISON CHART Fig: 37 In the above price band. as it is more or less near to what Indiabulls is charging. 71 | P a g e . Where ICICI Direct is a little below Kotak. Motilal Oswal and HDFC both are commodity side of the graph with relatively higher prices charged for their product. Indiabulls is facing somewhat strong competition from Sharekhan. Thus with its current pricing Indiabulls enjoys price leadership as far as brokerage is concerned. At the same time Kotak Securities also poses a threat because of the improved technology used by them and constant research and development.

SWOT ANALYSIS OF COMPETITOR FIRMS  SWOT OF SHAREKHAN Strength • Market share leadership. 72 | P a g e . • Reputation management. • Less small investors. financial position and competitive pricing. • High Research and Development. Weaknesses • Diseconomies of scale. • More employee turnover. • Strong brand recall and strong reach to masses. • Strong management team. • Not much differentiated products. Unique products diverse products and offers for the customers.

OnlineProduct and services expansion. Fig: 38 73 | P a g e . taxes. etc) • Innovation. • Economic slowdown.Oppourtunities • Financial markets (raise money through debt. • Penetration in developing cities. • Exchange rate fluctuations. • Cheaper technology. politics. • Increase in awareness of people about stock market Threats • Competition. • External changes (government. etc).

• Innovative products. SWOT OF INDIA INFOLINE • Brand image. 74 | P a g e . • Brand experiance. • Many competitors. • The reach in semi-urban areas and rural markets is still very less. Strength Weaknesses • High targets for the financial advisors and sales department. less differentiated products.

• Slowdown in global liquidity flows. • Leveraging technology to enable best practices and processes. • Increased appetite (need) of Indian corporate for growth Threats • Execution risk. • Regulatory reforms would aid greater participation by all class of investors. Fig: 39 75 | P a g e . • Unfavorable economic conditions.Oppourtunities • Growing Financial Services industry's share of wallet for disposable income. • Increased intensity of competition from local and global players.

 SWOT ANALYSIS OF ICICI DIRECT Strength • Banking arm. • Team of talented and committed professionals available to improve companies performance. • Ongoing activities to support up gradation of operational performance. • Not innovative. • Not diversified • high employee turnoverless. • Upgraded product design and development facilities to develop new products. Weaknesses • small investors 76 | P a g e .

Oppourtunities • Constant pressure to be cost competitive to meet customer expectations. • Increse in penetration in the market.• Innovation. Threats Fig: 40 77 | P a g e .

• Strong financial results. • Brand recognition. Strength • Experienced top management. Weaknesses • Charges are high compare to other companies in industry.. • Strong research and sales team. 78 | P a g e .SWOT OF MOTILAL OSWAL • Large and diverse distribution network.

• Unfavorable economic conditions.Oppourtunities • Growing Financial Services industry's share of wallet for disposable income. • Slowdown in global liquidity flows. Fig: 41 79 | P a g e . • Increased appetite (need) of Indian corporate for growth capital. • Execution risk. • Leveraging technology to enable best practices and processes. Threats • Increased intensity of competition from local and global players. • Regulatory reforms would aid greater participation by all class of investors.

Weaknesses • Competition from Banks.SWOT OF ANGEL BROKING • Service • Distribution network Strength • Products • Customer Satisfaction. • Branding. 80 | P a g e .

. • Improving technology.• Ever increasing market. Threats Fig: 42 81 | P a g e . Oppourtunities • New competitorsTechnology based business. • Unfulfilled needs of customers. • Education level.

Nasik. Indiabulls real estate business is currently active in various cities: Hyderabad. including the Real Estate agents of the city. it faces competition from players such as Sobha Developers. Bangalore. Fig: 43 82 | P a g e . Mumbai. In the Premium Housing category. as have the Hyderabad Realtors. Competition in the industry The booming Real Estate Sector has given rise to a number of companies which give stiff competition to Indiabulls Real Estate.COMPETITION IN REAL ESTATE Real Estate prices in Hyderabad have touched new heights. Indiabulls Real Estate mainly faces competition from players such as DLF and Ansal Properties and Infrastructure Limited. In the Affordable Housing segment. and many other cities. Ahmadabad. Kolkata.A rising trend has been observed in the demand for luxuriant residential and IT spaces. even though some political issues act as a dampener once in a while . Jodhpur. The demand for Real Estate development sites and projects have increased. Gurgoan.

Some competitors in the market who also provide also provide home loans are: Fig: 44 Some Housing Finance Companies which provide home loans and fall in Indiabulls‟ competitor league are: Fig:45 83 | P a g e . enhanced the borrowing power of customers. Nationalized and Public Sector Banks were the sole providers of Home Loans but the entry of the Public Sector Banks marked a change in the interest rates. which came down considerably. The decrease in Interest Rates in turn.COMPETITION IN HOMELOANS In earlier days.

Easy access to customers of the snap shots of their account statement and portfolio statements and to digital contract notes. Both online and offline facilities are provided. Mobile trading tie ups with Blackberry and other phones. Relationship manager facility to assist customers as and when they need assistance and guidance. Full access to Indiabulls Equity Analysis. Listed company and aggressive in brand promotion.COMPETITIVE ADVANTAGE OF INDIABULLS BROKERAGE SERVICES          Lowest brokerage charge in the industry (currently). follows a fact based approach to rating stocks. Best software in the industry. Competitive commissions and service support at fair price (value for money). where one can trade with ease. 84 | P a g e .

initial public offering (IPO). was a subsidiary of IBFSL. Breaking free. and mutual fund distribution.CONCLUSION Indiabulls. The arch of the bull. which is in trend now. they are:  Sales call made to new customers should be made promptly as immediate calling and customer move to competitors easily. This can be a reason why customers move away. futures.  Indiabulls should go for aggressive advertising. loan against property and housing loans. insurance. depositary services. 85 | P a g e . loans against shares. home loans. RECOMMENDATIONS While working in the real time and while making this project many things came into scene. research services. within some years of its inception has established itself as a business super brand. Indiabulls Securities Limited. commodities. the young bull on the run. commercial vehicle and tractor financing. and commercial credit to small and medium scale industries. power.  Indiabulls has tie-ups with all banks except SBI. The company which began as a simple brokerage firm has now spread its wings in real estate. as most of its products and the brand itself is not much advertised. (ISL) before its demerger in 2008. Indiabulls Financial Services Limited (IBFSL) which is the flagship company of the group. retail IPO financing. and options. ISL provides securities brokerage services including equities.  Services of Indiabulls are available on all phones except on iphones. offers consumer finance. etc. including secured and unsecured personal loans.

86 | P a g e . out of only two dominant factors came out. on a population of 110. Another part of the project was a competitive analysis to find out competitive advantage that Indiabulls has over its competitors.OUTCOME AND CONTRIBUTION A factor analysis was conducted to find out the factors affecting the investment decisions. Also the factors affecting investment decisions can be help in future when deciding on the various demand drivers. A total of 11 factors were considered. My project‟s data collection on different kind of rates prevailing in the market of different competitors is of great importance and time to time help for the company. Which the help of which it can be explained that there are some external and personal/internal factors that affect a persons‟ investment decision. Another task assigned to me was to call the existing customers and explain them about what Indiabulls could offer them at that point of time. My task at Indiabulls was to bring sales leads and to do sales calling to them to convert them into sales.

clarify the customer‟s doubt and create sales. 87 | P a g e . commodities. I also learnt how to talk to customers when doing a sales calling or when really approaching them. This SIP has been a great insight to me and it would always help me when I work for a firm in future or invest myself. etc that are traded. Then make sales call. I learnt how to keep a track of the very fluctuating stock prices and how to invest in them. various kinds of securities. During this process I learnt about the stock market. and generate sales leads on its basis. many of mine were cleared too.LEARNINGS FROM SIP Through the course of my summer internship programme. I got a glimpse of the brokerage industry‟s new upcoming giant firm Indiabulls. And in the process of explaining them and clearing their doubts. I also came to know about different kind of loan potions and gained knowledge about real estate sector also. My task during SIP was to go to various corporate offices and explain some target population about various investment options offered by Indiabulls and its advantages. spices. metals.

88 | P a g e .wikipedia.indiabulls. Pearson Education  Al Ries and Jack trout.valueline. New Delhi: Dorling Kindersley (India) Pvt Ltd. 1972.wa.gav.quickmba.REFERENCES Sites:          www.com/2010/06/04/investment decisions economicstimes.html www.indiatimes.secgov/investor/pubs/financialnavigating. Principles of Marketing Management.org/wiki/marketing_research www.au/business-life-cycle www. Marketing Management. A South Asian Perspective.wikipedia.com/stock/industry en.tradestreaming.com>opinion en. 2009.org/wiki/porters-five-factor Books:  Kotler Philip et al.com/strategy/matrix/bcg www.smallbusiness.com www.

If yes.APPENDIX Questionnaire for factors affecting investment decision 1. Why do you invest? 89 | P a g e . Do you invest? Yes: No: 2. what is your investment portfolio? Or How much do you invest? 3. More than one of the above? -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------5. Where do you put your money? Stocks: Commodities: Currencies: Derivatives: Others (specify): 4.

Salaried/ Non-salaried 10. 11. Name: 9. Do you invest in more than one of the above? -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------8.6. What are the factors that affect your investment decisions? Income: Market situation: Company: Risk appetite: Management outlook: Market forecast: Fiscal incentives: Cash flow budgets: Non-economic factors: Age factor: Others (specify): 7. Occupation: Any suggestions/ Comments: 90 | P a g e .

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