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SUMMER INTERNSHIP PROGRAM FINAL REPORT

Analyzing Market Potential For Franchisee Acquisition

Name of the company: Motilal Oswal Connaught Place (New Delhi)

NAME : MOHIT CHOMAL ENROLLMENT NO. : 08BS0001770
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IBS,NOIDA

FINAL REPORT ON

Analyzing Market Potential For Franchisee Acquisition
By MOHIT CHOMAL A Report submitted in partial fulfillment of the requirements of MBA program of ICFAI Business School, Noida

Submitted To MR. RAKESH SHARMA Company Guide Motilal Oswal, Connaught Place, New Delhi

Prof. Y.P.GUPTA Faculty Guide ICFAI Business School, Noida

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TABLE OF CONTENTS

S.No. Authorization Acknowledgment Executive Summary Chapter 1 1.1 1.2 1.3 1.4 1.5 Overview Of Industry Broking Industry Insight

Topic

Page No. 4 5 6

3 7 9 10 12

Major developments in equity brokerage industry in India Growth Driver of Equity Market Market Analysis of Broking Business Major players in the industry

Chapter 2

Introduction to the Project

2.1 2.2 2.3 2.4 Chapter 3

Need for the Project Objectives of the project Scope of the project Limitations of the Project Introduction of Motilal Oswal

14 15 16 16

3.1 3.2 3.3

History Motilal Oswal Products & Services Business Acquisition Group
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19 20 27

3.4 Chapter 4

Competitor Analysis Research Methodology

28

4.1 Chapter 5

Methodology used for this Project Data Analysis

34

5.1 5.2 5.3 5.4 5.5 Chapter 6 6.1 6.2

Main Broker & Sub – broker Analysis Detailed Analysis of the Questionnaire Cross Tab Analysis Prospects Generated for Motilal Oswal Securities Ltd. Micro Profiling of the best Prospects Recommendations Recommendations Conclusion

45 47 59 66 68

73 74

Annexure Survey Questionnaire Appendix Bibliography 80 76

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LETTER OF AUTHORIZATION

This is to certify that this Marketing Research report, title “Analyzing the Market Potential for Franchisee Acquisition” is the bonafide work of Mr. Mohit Chomal of ICFAI Business School, Noida.

The report will only be used for Motilal Oswal Securities Ltd. Internal use and will not be used as a commercial data.

Authorized by:

Mr. Rakesh Sharma Manager, BAG Motilal Oswal Securities Ltd. (Company Guide)

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ACKNOWLEDGEMENT

“Words express everything

Mouth Co-ordinates, When it comes to gratitude, Heart comes to play.”

It gives me immense pleasure for an opportunity to have undergone my Summer internship with Motilal Oswal Securities Limited. There is always a sense of gratitude which one expresses to other people for their helpful and needy service they render during phases of life. I too would like to do the same as I really wish to express my gratitude to those who have been helpful to me in getting this project completed. In representing this report I would like to express my gratitude to Mr. Rakesh Sharma, Manager, Motilal Oswal Securities Limited for giving me this wonderful opportunity to work with Business Associate Group, and providing me with his able guidance and inspiration for the completion of project. I would also like to express my gratitude to Mr. Munish Chauhan for his cooperation and guidance without which this project would never have been a success. I am also indebted to all the internal employees and fellow trainees of Motilal Oswal for providing consistent encouragement and congenial atmosphere to complete the project. Last but not the least I will express my sincere thanks to Prof. Y.P. Gupta and ICFAI Business School for providing me with support and necessary guidance and valuable instructions for the completion of this project.
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Executive Summary
It is well evident that work experience is an indispensable part of every professional course. In the same manner practical training is must for each and every individual who is undergoing management course. Without the practical exposure one cannot consider himself or herself as a qualified capable manager. During the project period student can learn through his own experience, the real situation of market and corporate world and to put his theoretical knowledge into practice. Hence to fulfill the requirement, I have completed my Two Months Internship in Motilal Oswal Securities Ltd. on the topic “Market Potential for Franchisee”, given to me by my company guide.

Being new to the Stock Market, I was engrossed fully into the sector where I was told to understand the basics of stock market, the effect of recession on this sector, I was told to educate various sub brokers operating in Delhi about the benefits of the Franchisee being offered by Motilal Oswal, and how this opportunity can profit both the parties. I also did a survey for extracting information from brokers, which would be helpful for the company to find a suitable partner as a franchisee holder.

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

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Chapter 1 OVERVIEW OF INDUSTRY

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1.1 Broking Industry Insight
The equity brokerage industry in India is one of the oldest in the Asia region. India had an active stock market for about 150 years that played a significant role in developing risk markets as also promoting enterprise and supporting the growth of industry. The working of stock exchanges in India started in 1875. BSE is the oldest stock market in India. The history of Indian stock trading starts with 318 persons taking membership in Native Share and Stock Brokers Association, which we now know by the name Bombay Stock Exchange or BSE in short. In 1965, BSE got permanent recognition from the Government of India. National Stock Exchange comes second to BSE in terms of popular. Stock trading is a big business in any way and in any standards. With daily volumes of Rs12000-15000 crore (on the BSE and NSE) in the cash segment and a volume of about Rs 30,000 – 35,000 crore in the derivative market, the size of the industry is around Rs 5,000 crore per annum in terms of broking revenues. Meanwhile the trading business too is booming. BSE and NSE represent themselves as synonyms of Indian stock market. The history of Indian stock market is almost the same as the history of BSE. The current "stock market" is comprised of 300,000 computers situated on pro trader's desks. These computers are networked together using sophisticated protocols. This level of information sharing makes pricing an almost exact science. These 300,000 computers are further linked to another 26 million computers worldwide. These computers are located in banks, small businesses, and large

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corporations. These computers comprise the banking networks, which make computerized transactions possible. Finally, these computers are connected to another 300 million+ computers, which connect and disconnect from the financial markets daily. In New York City alone, these transactions amount to over $2.2 trillion dollars daily. Sensex crossed the 5000 mark in 1999 and the 6000 mark in 2000. The 7000 mark was crossed in June and the 8000 mark on September 8 in 2005 and by 2007 It has already seen mark 14500. Many foreign institutional investors (FII) are investing in India. The liberal economic policies pursued by successive Governments attracted foreign institutional investors to a large scale. The unpredictable behavior of the market gave it a tag – ‘a volatile market.’India, after United States hosts the largest number of listed companies. Global investors now ardently seek India as their preferred location for investment. • Beginning of a New Equity Culture A new phase in the Indian stock markets began in the 1970s, with the introduction of Foreign Exchange Regulation Act (FERA) that led to divestment of foreign equity by the multinational companies, which created a surge in retail investing. The early 1980s witnessed another surge in stock markets when major companies such as Reliance accessed equity markets for resource mobilisation that evinced huge interest from retail investors. A new set of economic and financial sector reforms that began in the early 1990s gave further impetus to the growth of the stock markets in India. As a part of the reform process, it became imperative to strengthen the role of the capital markets that could play an important role in efficient mobilization and allocation of financial resources to the real economy. Towards this end, several measures were taken to streamline the processes and systems including setting up an efficient market infrastructure to enable Indian finance to grow further and mature. The importance of an efficient micro market infrastructure came into focus following the incidence of
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market abuses in securities and banking markets in 1991 and 2001 that led to extensive investigations by two respective Joint Parliamentary Committees. The Securities and Exchange Board of India (SEBI), which was set up in 1988 as an administrative arrangement, was given statutory powers with the enactment of the SEBI Act, 1992. The broad objectives of the SEBI include • to protect the interests of the investors in securities • to promote the development of securities markets and to regulate the securities markets The scope and functioning of the SEBI has greatly expanded with the rapid growth of securities markets in India in the last fifteen years. Following the recommendations of the High Powered Study Group on Establishment of New Stock Exchanges, the National Stock Exchange of India (NSE) was promoted by financial institutions with an aim to provide access to investors all over the country. NSE was incorporated in Nov 1992 as a tax paying company, the first of such stock exchanges in India, since stock exchanges earlier were trusts, being run on no-profit basis. NSE was recognized as a stock exchange under the Securities Contracts (Regulations) Act 1956 in Apr 1993. It commenced operations in wholesale debt segment in Jun 1994 and capital market segment (equities) in Nov 1994. The setting up of the National Stock Exchange brought to Indian capital markets several innovations and modern practices and procedures such as nationwide trading network, electronic trading, greater transparency in price discovery and process driven operations that had significant bearing on further growth of the stock markets in India. Faster and efficient securities settlement system is an important ingredient of a successful stock market. To speed the securities settlement process, The Depositories Act 1996 was passed that allowed for dematerialization (and re-materialization) of securities in depositories and the transfer of securities through electronic book entry. The National Securities Depository Limited (NSDL) set up by leading financial
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institutions, commenced operations in Oct 1996. Regulations governing selection of various types of market intermediaries as depository participations were made. Subsequently, Central Depository Services (India) Limited promoted by Bombay Stock Exchange and other financial institutions came into being.

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

1.2Major Developments in Equity Brokerage Industry in India
i) Corporate memberships

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

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

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

iv) Accessing equity capital markets

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

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

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

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

viii) Compliance oriented

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

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

1.3 Growth Driver of Equity market
The major growth drivers for brokerage revenue and trading volume are:•

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

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

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

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

Low Product Differentiation Proves Beneficial

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

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

Increased Focus of Banks in Retail Broking
Various foreign banks like ABN Amro and others are planning to enter the Indian retail brokerage industry. This can be taken as positive note from the view of the whole industry, since it is growing so more and more people are willing to be a part of it as well as a negative note from the view of broking houses, since it will increase competition in the market.

Online Trading Competes with Traditional Brokerage
There is an increasing demand for online trading due to consumer’s growing preference for internet as compared to approaching the brokers.

• Threat of New Entrants • Entry of Foreign Players
New forms of trading including T+2 settlement system, dematerialization etc are strengthening the retail brokerage market and attracting foreign companies to enter the Indian industry.

• Threat of Substitutes • Alternative Investment Options
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Various alternative forms of investment including fixed deposits with banks and post offices etc act as substitutes to retail broking products and services.

1.5 Major Players in the Industry
✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔

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

✔ Motilal Oswal Securities (www.motilaloswal.com)

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Chapter 2. INTRODUCTION TO THE PROJECT

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

Besides that the marketing strategies used by other companies in same business was studied and suggestions were drawn to develop an effective strategy. Besides these major issues many other issues were taken care of in this report.

2.1The Need for This Project
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➢ No study has been done on this business so far – So far no study has been

done regarding this business in New Delhi, so a detailed study of the market is required to understand it properly.
➢ Lack of understanding of the need of the business houses – Since no

segmentation study has been done the specific needs of different companies are not known.
➢ Focus the existing marketing team at right market – The lack of

understanding of the market wastes a lot of effort of the sales team. The business is generated through cold calls right now. But if there was a proper understand the requirement of each type of market segment the sales team may pitch in right mix of products to the right prospective clients.
➢ Lot of small players cropping up – It always creates a problem when the

market starts getting congested. Same is the case with the market of financial business. Through this project I have tried to develop a structured view of the market which will not only help in understand the whole market but also help in targeting the marketing force at the right places to get more business.
➢ Same array of products – Almost all the companies in the market are pitching

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

utmost importance for a company to innovate to reach at the top. So, innovation in terms of products, lead generation, and communication strategy is required.

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➢ No idea of the position of the competitors – The companies doesn’t have any

idea what the other companies in the same business are doing to generate more business, what are the innovations going around in the market.
➢ Lack of understanding of the satisfaction of existing customers – It always

pays to introspect oneself. But so far no formal study in this regard has been undertaken so we don’t know how we have performed so far.

2.2 Objectives of the project
➢ Analyzing broking market potential. ➢ Providing data driven decision for franchisee acquisition. ➢ Analyzing the franchisee model of MOSL with respect to two major broking houses & conduct a SWOT analysis of MOSL. ➢ Understanding the B2B marketing environment. ➢ To increase the number of franchisee ➢ Understanding the process of marketing research suitable for B2B environment.

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

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

regarding these issues are taken by their head offices. ➢ Many companies do not wish to give out information which leads to incomplete responses. ➢ Many people gave unauthentic information to hide their ignorance.

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Chapter 3. INTRODUCTION OF MOTILAL OSWAL
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Motilal Oswal Financial Services Ltd. (MOFSL) is a well-diversified, financial services company focused on wealth creation for all its customers, such as institutional and corporate clients, HNI and retail customers. Our services and product offerings include equity broking, commodity broking, and distribution of third party products, investment banking and venture capital management. It is one of the most respected corporate houses known for their business research and franchisee model initiation of sub-broker reforms besides being recognized for their values of fair, transparent and ethical dealings. The spirit of entrepreneurship, the vision of a dynamic tomorrow, and the capacity to build and realize dreams! This is the essence of the Motilal Oswal. No wonder then, Motilal Oswal has become the symbol of a vibrant multi-business enterprise touching the lives of many and at the same time an icon of enduring ideals in a changing world.

3.1 History
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Motilal Oswal Securities Ltd. was founded in 1987 as a small sub-broking unit, with just two people running the show. Focus on customer-first-attitude, ethical and transparent business practices, respect for professionalism, research-based value investing and implementation of cutting-edge technology has enabled us to blossom into an almost 2000 member team. Today we are a well diversified financial services firm offering a range of financial products and services. Motilal Oswal has a diversified client base that includes retail customers (including High Net worth Individuals), mutual funds, foreign institutional investors, financial institutions and corporate clients. The headquarter is in Mumbai and as of December 31st, 2008, had a network spread over 512 cities and towns comprising 1,428 Business Locations operated by our Business Partners and us. As at December 31st, 2008, the total number of registered customers wad 5, 27,368. Motilal Oswal Financial Services Ltd. (MOFSL) is a well-diversified, financial services company focused on wealth creation for all its customers, such as institutional and corporate clients, HNI and retail customers. Our services and product offerings include equity broking, commodity broking, and distribution of third party products, investment banking and venture capital management. Mr. Motilal Oswal and Mr. Raamdeo Agrawal laid the foundation for MOFSL and initially conducted business as a sub-broking firm. Thus, began the expedition of building a professional organization with strong value systems, to provide investment advice to investors. Today, Motilal Oswal Financial Services Ltd. is a well-established brand among retail and institutional investors in India, with a presence in over 1533 business locations across over 487 cities . From a sub-broking firm, Motilal Oswal Financial Services Ltd. has today become a
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solid financial services company straddling a spectrum of businesses in the financial services space. These businesses include Wealth Management, Institutional Equities, Investment Banking and Venture Capital Management.

3.2 Motilal Oswal Products and Services

Today Motilal Oswal is a well diversified financial services firm offering a range of financial products and services such as ➢ Wealth Management ➢ Broking & Distribution ➢ Commodity Broking ➢ Portfolio Management Services
➢ Institutional Broking

➢ Private Equity ➢ Investment Banking Services and ➢ Principal Strategies

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Wealth Management
Financial planning for individual, family and business wealth creation and management needs. These are provided to customers through our Wealth Management service called ‘Purple’.

Broking & Distribution services
➢ Equity (cash and derivatives) ➢ Commodity broking ➢ Portfolio Management Services ➢ Distribution of financial products ➢ Financing ➢ Depository Services ➢ IPO distribution

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We offer these services through our branches, Business Partner locations, the internet and mobile channels. We also have strategic tie-ups with State Bank of India and IDBI Bank to offer our online trading platform to its customers.

Commodity Broking
Through Motilal Oswal Commodities Broker (P) Ltd our fully owned subsidiary; we provide commodity trading facilities and related products and services on MCX and NCDEX. Besides access to the best of research in the form of Daily Fundamentals & Technical Reports on highly traded commodities, our clients also get access to our exclusive Customized Trading Advice on both the trading platforms. We offer these

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services through our branches, Business Partner locations, the internet and mobile channels

Portfolio Management Services
Motilal Oswal Portfolio Management Services offer a range of investments solutions through discretionary services. We at Motilal Oswal have helped create wealth for our customers through our Portfolio Management Services. Our knowledge of the markets together with our understanding of our customers and their risk profiles has helped us design a range of portfolio offerings for our clients. These include the Value PMS, Bulls Eye PMS, Trillion Dollar Opportunity and Focused Portfolio Series I. As of December 31st, 2008, the Assets under Management of our various portfolio schemes stood at Rs.5.04bn. Motilal Oswal group has applied to the regulatory bodies for a license to operate as a Domestic Asset Management Company (Mutual Fund) and we expect to begin operations soon.

Institutional Broking
We offer equity broking services in the cash and derivative segments to institutional clients in India and overseas. These clients include companies, mutual funds, banks, financial institutions, insurance companies, and FIIs. As at December 31st, 2008, we were empanelled with over 300 institutional clients including 200 FIIs. We service these clients through dedicated sales teams across different time zones.

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Investment Banking
We offer financial advisory services relating to mergers and acquisitions (domestic and cross-border), divestitures, restructurings and spin-offs through Motilal Oswal Investment Advisors Private Ltd. (MOIAPL) We also offer capital raising and other investment banking services such as the management of public offerings, private placements (including qualified institutional placements), rights issues, share buy backs, open offers/delisting and syndication of debt and equity. MOIAPL has closed 23 transactions in 2007-08 worth US$ 1.8 billion and had 18 mandates in h and as at March31, 2008.

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Private Equity
In 2006, our private equity subsidiary, Motilal Oswal Private Equity Advisors Private Ltd (MOPEAPL) was appointed as the investment manager and advisor to a private equity fund, India Business Excellence Fund, which was launched with a target of raising US$100 mn. The fund is aimed at providing growth capital to small and medium enterprises in India, with investments typically in the range of US $3 mn to US $7 mn. MOPEAPL will manage and advise the fund and other private equity funds, which may be raised in the future. In its final closing, in December 2007, the fund obtained commitments of US$125 mn (Rs.4, 875 mn) from investors in India and overseas. The Fund has deployed/ committed $ 58 mn across 8 deals. MOPEAPL has recently launched an INR 750 Crores domestic Real Estate Private Equity Fund called “India Realty Excellence Fund” sponsored by Motilal Oswal Financial Services Ltd.

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MARKET SHARE: EQUITY BROKING

Principal Strategies Group
For effective management of treasury operations and to capitalize on market opportunities, the Group has set up a 30 member team which would be responsible for effective deployment of funds into different trading and arbitrage strategies.

Focus on Research
Research is the solid foundation on which Motilal Oswal Securities advice is based. Almost 10% of revenue is invested on equity research and we hire and train the best resources to become advisors. At present we have 23 equity analysts researching over 27 sectors. From a fundamental, technical and derivatives research perspective; Motilal Oswal's research reports have received wide coverage in the media (over a 1000 mentions last year). Our consistent efforts towards quality equity research have reflected in an increase in the ratings and rankings across various categories in the Asia Money Brokers Poll over the years

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3.3 Business Acquisition Group (BAG)
The firm has a dedicated BAG department which deals with the acquisitions of business partners at various locations all over India. This department has helped Motilal Oswal to Grow at a very fast pace. Such a rapid growth is observed due to acquisitions of the best businesses at most profitable locations. Making a firm as a business partner is a tuff job. Since, as soon it becomes your business partner its own identity is lost and its entire works are perceived as part of the firm. It carries the brand along with it. Business acquisitions act as dual benefit to the partnering firm as well as Motilal Oswal. On one hand, it provides the best research, brand and other associations’ benefits to the firm joining hands. On the other, it expands Motilal Oswal’s foot in the country and further Since, The firm was already performing. Hence, the risk for the company reduces. Anyhow, its works slow but has better results than simply selling the business partnerships to inexperienced partners. There are more than 1800 sub-brokers in Delhi & NCR area out of which Motilal has only 20 Sub-brokers. There is a huge gap between the market share of Motilal and other broking firms. Hence, The Company wishes to bridge this gap by acquiring sub-brokers of other firms. Like Share khan, SMC Global etc.

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3.4 COMPETITOR ANALYSIS

UTI Securities Ltd.

•Model: - Franchisee, online trading •Products: - NSE / BSE /PMS / IPO / MFs/Commodity/Life Insurance/Investment Banking/Online Trading •Registration: - Rs 10,000 each for BSE & NSE •Deposit required: - 2 lakh (no exposure, no interest) •Brokerage: - 4 paisa and 30 paisa •Sharing: - 60:40 in favor of Franchisee •DP account: - Rs 500 per annum and Rs 12 per transaction •Connectivity: -VSAT Rs 5000 per month but refundable if brokerage earned by UTISEL is Rs 1,50,000 in a quarter •Mkt support: - Flex and pamphlets •Software charges: - One license free and for additional license Rs 1000 PM for first year then Rs 400 PM per license •Training: - 15 days •Margin funding: - No •Exposure: - 10 times on clients margin

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Strength & weakness in respect to MOSL

Strength: • Brand name associated with UTI bank • Low security deposit • Sharing starts with 60:40 ratio • No fixed charge for VSAT, Rs 5000 PM that also refundable if brokerage earned by UTISEL is Rs 1,50,000 in a quarter • Local servicing

Weakness: • No exposure on security • Neither dedicated BD team nor any mkt support. • No focus on research and services • No concept of dedicated activation team for new franchisee. • Only 15 days back office training • Low focus on cross selling of products • Margin funding is not promoted • Diversified business

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ICICI Direct.com •Model: - Online franchisee •Products: - NSE / BSE / NCDEX / MFs / IPO / insurance •Registration: - Rs 10,000 each for BSE & NSE •Deposit required: - Rs. 40000 + Rs 25000 for registration •Brokerage: - 30 paisa and 75 paisa •Sharing: - Rupee1/- ~ 2 Lk: - 30%, Rs. 2 Lk ~ 7.5 Lk: - 35%, Rs. 7.5 Lk ~ 15 Lk: - 40%, Rs. 15 Lk ~ 25 Lk: - 45%, Rs. 25 Lk +: - 50%

•DP account: - Rs. 500 PA +Rs 10-30 per outgoing •Connectivity: - Broadband •Mkt support: - no (flex sheet, visiting card and pamphlets) •Software charges: - free •Training: - 1 week •Margin funding: - not for retail client •Exposure: - 4-6 times on intraday, no exposure on delivery

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Strength & weakness in respect to MOSL •Strength: •Weakness: -

• • • • • •

11 lakh customer base (appox) Low security deposit Very efficient software User friendly usage Broadband connectivity Real time settlement

• No exposure on security • No dedicated BD team nor any mkt activity support • No focus on research and services • No concept of dedicated activation team for new franchisee • Only 1week back office training. • Low focus on cross selling of products • No exposure on delivery • High brokerage charge

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SWOT ANALYSIS OF MOTOLAL OSWAL

Strength • Brand name • World class service • Dedicated business development team • 3 months dedicated activation • Strong research based advice • Focus on wealth management • Cross selling of 3rd party product • Focus only on one business

Weakness • High Deposit • Low focus on brand promotion • Servicing through central level • Technology and connectivity is not highly up scaled

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Opportunity • Smaller players moving out of market • Consolidation phase is going in mkt. • Few competitors are shifting their focus on another business. • As market is less volatile so more customer are investing.

Threat • No connectivity broadband through

• Big multinationals are coming • Brokerage charge is going very low.

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Chapter 4. RESEARCH METHODOLOGY

4.1 Methodology used for the project:
This project followed a simple & systematic methodology. I have followed a phase by phase approach to complete this project.

1st Phase
In the 1st phase I was informed about the whole business of franchisee integration. I received complete knowledge about the details of the business and how it is done at Motilal Oswal by Mr. Rakesh Sharma. In this stage I went through some websites to find out more about this particular business. After joining the company on 13th Feb, 2009, problem definition was the most important task undertaken as it was going to

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determine the future course of action. The right understanding of the problem was as important as the entire project itself. The project guide Mr. Rakesh Sharma was a big help to me in determining this step. He not only explained the in and out of the business but also the problems that the franchisee team had been facing so far. After having a detailed conversation for several days following problems were identified. I realized that no study has been done on this particular business so far so I took it up as a job to do a complete analysis of the business along with the problems defined by Mr. Rakesh Sharma. So I decided that there will be three parts in my project pertaining to the three main parts that exists in any business i.e.
➢ Competitor’s analysis

➢ Target customer analysis ➢ Business from the target customer For this systematic and standard steps were followed which formed the later phases of my project.

Phase 2: Problem Definition
After joining the company on 13th Feb, 2009, problem definition was the most important task undertaken as it was going to determine the future course of action. The right understanding of the problem was as important as the entire project itself. The project guide Mr. Rakesh Sharma was a big help to me in determining this step. He not only explained the in and out of the business but also the problems that the sales team had been facing so far. Besides that I also visited various internet sites to gain an insight about the problem that the company might be facing. After having a detailed conversation for several days following problems were identified.

Management Decision Problem:

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a. How to maintain the leadership in the market that is becoming congested by small players? b. How to capture new market segments and what are the needs and expectations of these segments? c. What can be done towards sub-broker satisfaction and sub-broker loyalty?

Marketing Decision Problem:
a. What are the different segments of the market and what are their needs? b. What are the actions going around in the market and how the competitor companies are working to get an edge over Motilal Oswal? c. What are the main benefits provided by the competitor companies to offer their franchisee? d. In a market where almost all the companies are offering same products what more can be done to maintain the status of market leader? e. What do the existing franchisees feel about the overall product? f. Is there a need for enhancing the existing communication strategy of the company? The problem definition stage helped me clearly understand the expectation of the company from the project and the direction in which one needs to move to achieve those expectations.

Diagram: The process of Problem definition

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Phase 3: Developing an Approach to the Problem
Once the problems faced by the company were identified the next step included the development of the approach to the problem, i.e. defining the research problems and presenting them in a form which may be helpful in the process of market research. In this step proper statement of problem was set up which is “Expansion Plan of Motilal Oswal” that is of interest to the researcher. Motilal Oswal has only twenty two (22) franchisee in Delhi & NCR, whereas the actual potential is in between one hundred (100) to one hundred fifty (150). For the Market Expansion Plan, Motilal Oswal needs to increase its total number of franchisee in Delhi & NCR.

Preparing the statement of Research Objective
The objective of the project is “To increase the number of franchisees”. Motilal Oswal has comparatively lesser number of franchisees in comparison to its competitors like Reliance Money, Kotak Securities, Religare, Angel Broking etc. Company’s motive is to expand the market. So it has to increase the number of its sub-brokers in Delhi & NCR region.

Phase 4: Research Design Formulation
Market research involves lot of effort and time, so it is always best to be very clear as to what has to be done and how it has to be done and this was decided in the third step of the project. From the understanding of the project I decided to go for a survey research first to get a better idea of the market. And then go for the main descriptive research. In this step following decisions were taken:
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1. Information should be obtained from sub-brokers currently operating in Delhi & NCR region. 2. Time Allotted: 03 Months 3. Budget Allotted: Stipend for trainees
4. The first step towards the research will begin with a survey research. In this

research different sub-brokers of our competitor company across Delhi & NCR will be contacted over the phone and will be asked few questions from a predesigned questionnaire. This step will give us some idea about our competitors and how they are seeing the market. This will also help us to understand up to what extent they are associated with their main broker. 5. Then the survey research part will follow in which the questionnaire will be designed directly on the laptop, in word format so that responses can be directly stored in softcopies. This strategy will not only save paper and make the project environment friendly but also save us from the extra effort entering the data on the laptop after collecting it. 6. Then the next step would be to meet them and ask them for information relating to the questionnaire. 7. Based on the outcome, proper schedule will be designed for the project which will have provision for all the activities that are required to be undertaken. 8. Throughout the project internet will be used a lot to read about the different companies in the same business in Delhi & NCR. And any special features thus noticed will be documented. 9. And then a database of the companies, which will be visited for the responses, will be collected from the various sites of stock exchange. 10. Then the actual primary data collection step will take place in which subbrokers from the data base will be visited and then the responses will be collected from people responsible for such kind of decision making. 11. On the basis of terms and conditions for franchisee of Motilal Oswal, trainees are asked to provide extra information on the back page of the filled-up questionnaire by observing the office set up. This includes number of
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computers, employees, terminals, area of office, decoration, branches. If everything matches with the desired profile then they will recommend the respective sub-broker. 12. The trainees are asked to collect the visiting card of the respective sub-broker they are visiting to avoid any unfair means in data collection and also not to disclose their identity. 13. Once the survey is done, then the responses will be checked for any incomplete ones and they’ll be discarded. 14. Then a meeting with the respective client is fixed for Senor Manager to have the detailed discussion via telecalling by the trainees. 15. During the meeting the trainees are asked to be present over there to learn various skills and expertise which are required in today’s competitive world. 16. Then the collected data will be analyzed using SPSS. 17. This analysis will be documented. 18. The entire project will be reviewed once and then the final report will be prepared.

Schedule of the Project:
The Timeline decided for the project: 16th Feb – 21st Feb 23rd Feb – 28th Feb 2nd Mar – 21st Mar 23rd Mar – 28th Mar 30th Mar – 18th Apr 20th Apr – 16th May 18th May – 21st May 22nd May – 28th May

: Identification of the problem and defining it. : Questionnaire Designing : Data Collection : Data Analysis. : Fixing Meeting via Telecalling : Meeting with Client : Review of Project : Final report preparation : Final report submission.
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29th May

Diagram: the Flow of the work to be done for the Project

Phase 5: Survey Research
The primary objective of survey research is to provide an insight and an understanding into the details of the problem. For this a database of sub-brokers in the same business across Delhi & NCR was collected. Fifteen companies were found to be major players across Delhi & NCR. The list of the companies can be found in Annexure 1.

Designing Questionnaire
This was the next step that was undertaken. In this step first of all the questionnaire was designed to collect the responses of the companies regarding the franchisee. The questionnaire was designed in word format. It was intended from the beginning to make this project an environment friendly project and use as few papers as possible.

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OBJECTIVES OF QUESTIONNAIRE: The Questionnaire is developed while keeping in mind, the owner of a franchisee. Since, ultimately he has to decide to become a part of MOSL. (A Copy of a Blank and Filled questionnaire is attached in appendix) ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢ To know Owner’s experience in the industry. To know the willingness/interest of the owner in the business. Is he having proper i.e. skills for the business. To know how long that firm is serving the clients in that area and by what rate is it growing. What’s his perception about being more successful broker in the area? What he feels he needs to satisfy his clients. What challenge he is facing currently or he can face in the coming time and what he learned out of it? How far does he plan to go in coming 5 years? Does he require any type of support in achieving his goals or does he feel he is self sufficient. What qualities he feels he needs to acquire to achieve his goals.

Phase 6: Analysis
In this phase the first job that was done was coding the data collected from the market research in statistical software called “SPSS” so that it can be analyzed and meaningful results can be drawn from them. Due to the small sample size of the subbrokers survey, no quantitative analysis was done just the important outcomes were analyzed and documented in the “analysis” chapter in this report. The coded data from the prospective sub-broker’s survey was used to analyze that which is the factors that mainly affect the buying behavior of the companies. I also tried to study what are the reasons that prevent or defer the franchisee integration project.

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After everything was analyzed the results were taken into consideration and I tried to present feasible solutions to the problems that exist. Also proper segmentation was done according to the need of different market segments. All the observations made and analyzed are given in the Analysis chapter later in the report.

Phase 7: Report Preparation
In the final part of the project different suggestions and conclusions were drawn and then the final report was prepared.

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Chapter 5. DATA ANALYSIS

5.1 MAIN BROKER & SUB – BROKER ANALYSIS
Data has been analyzed using SPSS. Analysis includes Descriptive analysis (Frequencies), Non Parametric test (Chi – Square) & Cross Tab Analysis. The very first thing that a respondent writes in the questionnaire is his details like his name, Address, Age etc. and the most importantly whether he is a main broker or a sub broker.

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Type of broker Frequency 2 28 30 Percent 6.7 93.3 100.0 Valid Percent 6.7 93.3 100.0 Cumulativ e Percent 6.7 100.0

Valid

Main Broker Sub Broker Total

Type of broker
30

20

10

Frequency

0 Main Broker Sub Broker

Type of broker

In Data Collection Period, I was able to interview 30 Respondents; The Sample taken consists of 2 Main Brokers & 28 Sub brokers. In this project, Sub – brokers were the target respondents, however few main brokers were also been visited in order to learn some difference between a Main Broker & a Sub – broker.

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Test Statistics Type of broker 22.533 1 .000

Chi-Square a df Asymp. Sig.

a. 0 cells (.0%) have expected frequencies less than 5. The minimum expected cell frequency is 15.0.

Since, Asymp. Sig. 0.000 < 0.05. Hence, there is a significant difference between number of Main Brokers and Number of Sub brokers. Hence, the objective is achieved to gain knowledge about main brokers and collected data of sub brokers to find prospective clients. Characteristics of a Main Broker:• A Main Broker has a hoarding in his office stating that he is member at NSE and/or BSE whereas a sub broker has a hoarding or certificate of association with a main broker. • In comparison to Sub brokers, Most Main Brokers have a Big Office with more than 40 systems. • Main Brokers were not that helpful in disclosing the details. An average waiting time at a Main broker was at least 20 minutes even after market hours. I.e. after 4 P.M.

Some of the major Differences that were observed during the visit are as under:
MAIN BROKER • A Main Broker gets BSE/NSE Listing with an initial deposit of minimum of Rs. 5 crore with SEBI A Main Broker is the one who is directly attached with a Stock Exchange • SUB – BROKER One can become a Sub broker with even a Rs. 50 thousand of deposit with a Main Broker.

A sub broker is the one who is attached to stock market via a

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Main broker. • A Main Broker can serve to anyone • A sub broker has specific clientele like, Retail customers.

5.2 Detailed Analysis of the Questionnaire
Question 1:- How long have you been in this line?
Years since respondent is in the business Frequency 2 11 17 30 Percent 6.7 36.7 56.7 100.0 Valid Percent 6.7 36.7 56.7 100.0 Cumulativ e Percent 6.7 43.3 100.0

Valid

< 2yr 2 to 5yrs > 5yrs Total

Years since respondent is in the business
20

10

Frequency

0 < 2yr 2 to 5yrs > 5yrs

Years since respondent is in the business

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The table above represents that out of 30 respondents’ only two respondents is new to the market as they have less than 2 years of experience and majority of respondent have more than 5 years of experience.

Test Statistics Years since responde nt is in the business Chi-Square a 11.400 df 2 Asymp. Sig. .003 a. 0 cells (.0%) have expected frequencies less than 5. The minimum expected cell frequency is 10.0.

Since, Asymp. Sig. 0.003< 0.05. There is significant difference in the population of experienced & young players. This shows market is having experienced people & the prospective clients appear to be much in the population.

[54]

Question 2: What brought you to stock markets and made you think of a career in it? This Question asks the respondent about his main objective to get into the stock market. It helps us in knowing about the person’s instinct behind getting into this business, for example one came in this business for short term profits or really wants to grow the business & wants to cash out the brokerage in the bull market.
What brought the repondent to this business Frequency 3 12 Percent 10.0 40.0 Valid Percent 10.0 40.0 Cumulativ e Percent 10.0 50.0

Valid

Good short term profits Cash out the brokerage oppurtunity in a bull market Develop required skills to develop and serve large clients Total

15 30

50.0 100.0

50.0 100.0

100.0

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What brought the repondent to this business
16 14 12 10 8 6

Frequency

4 2 0 Good short term prof Cash out the brokera Develop required ski

What brought the repondent to this business

Analysis:

The table above clearly shows that 50% of the respondents needs to develop the required skills in order to serve the large client base. So this population can be the target for Motilal Oswal to acquire them & partner their growth by helping them gathering the required skills through its support Question 3: What’s your Educational Background and did you undergo any formal training? As per SEBI norms a person having an NCFM certificate in either of two modules or both namely, Capital market and derivative market can operate the trading terminal which is a basic Qualification in this business.

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Qualification of the respondent Frequency Valid Basic qualification along with exchange required certifica Profess qualification along with exchange reqd certificate Additional self development and mkrt related prg Total 21 Percent 70.0 Valid Percent 70.0 Cumulativ e Percent 70.0

7

23.3

23.3

93.3

2 30

6.7 100.0

6.7 100.0

100.0

Qualification of the respondent
30

20

10

Frequency

0 Basic qualification Profess qualificatio Additional self deve

Qualification of the respondent

Analysis:

It can be easily interpreted from the table that only 2 respondent has additional qualification.

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Major respondent have basic Qualification of NCFM which is a good sign as the population is adhering to the rule of SEBI of being NCFM qualified. Question 4: How long has this setup been in place & your growth story?
Length of the current setup Frequency 4 10 16 30 Percent 13.3 33.3 53.3 100.0 Valid Percent 13.3 33.3 53.3 100.0 Cumulativ e Percent 13.3 46.7 100.0

Valid

<2yrs 2 to 5 yrs >5yrs Total

Length of the current setup
20

10

Frequency

0 <2yrs 2 to 5 yrs >5yrs

Length of the current setup

Analysis:

53.3% of the setups are more than 5 yrs old, so they have very good client base & hence if acquired by Motilal Oswal will be a profitable deal.

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Question 5: What qualities make a successful broker?

Qualities attributed to be a successful broker Frequency Valid Higher ratio of succesful trading calls A culture of researched idea's with good infra and service All of the above Total 15 5 10 30 Percent 50.0 16.7 33.3 100.0 Valid Percent 50.0 16.7 33.3 100.0 Cumulativ e Percent 50.0 66.7 100.0

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Qualities attributed to be a successful broker
16 14 12 10 8 6

Frequency

4 2 0 H igher ratio of succ A culture of researc All of the above

Qualities attributed to be a successful broker

Analysis:

50% of the respondents thinks that Higher ratio of successful calls given to the customer is the key to become a successful broker. Motilal Oswal being best for its Equity research in the industry can approach these clients as they would like to take the research services of Motilal Oswal Securities in order to give more successful calls to their customers. Question 6: What are the factors for having a satisfied client?

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Factors needed to satisfy cleints Frequency 23 7 30 Percent 76.7 23.3 100.0 Valid Percent 76.7 23.3 100.0 Cumulativ e Percent 76.7 100.0

Valid

Prompt and timely service All of the above Total

Factors needed to satisfy cleints
30

20

10

Frequency

0 Prompt and timely se All of the above

Factors needed to satisfy cleints

Analysis:

More than 76% of the respondents believe that prompt & timely addressing of the client Queries plays an important role for having satisfied clients. For the proper address to the queries of the customer, the Sub broker would require the Customer Care Support & Motilal Oswal is the only company in the industry which provides

[61]

this service to their Franchisee owners & hence these respondents can be convinced by providing solution to this problem.

Question 8: What are the immediate challenges for this industry & your plan to tackle this?
Immediate challenges for the industry Frequency 2 10 18 30 Percent 6.7 33.3 60.0 100.0 Valid Percent 6.7 33.3 60.0 100.0 Cumulativ e Percent 6.7 40.0 100.0

Valid

Lack of interest Fresh capital drying up in Indian and foriegn markets Cut cost & wait for good times Total

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Immediate challenges for the industry
20

10

Frequency

0 Lack of interest Fresh capital drying Cut cost & wait for

Immediate challenges for the industry

Analysis:

Around 60% of the population believes that immediate challenge for the industry is to cut down on cost & wait for good times to come for the market which is an intelligent option to go with. So, Majority of the population is still optimistic about the market in the time of the recession & they are waiting for the good times to come.

Question 9: What is your perception about the road ahead for this industry?

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Perception about the road ahead as an industry Frequency Valid Recession would bot last longer than 2 quarters The next cycle could be bigger than previous one Total 21 9 30 Percent 70.0 30.0 100.0 Valid Percent 70.0 30.0 100.0 Cumulativ e Percent 70.0 100.0

Perception about the road ahead as an industry
30

20

10

Frequency

0 Recession would bot The next cycle could

Perception about the road ahead as an industry

Analysis:

70% of the respondents are optimistic & they feel that recession in the market would not last more than 2 Quarters. Hence this population wants to grow & expand the business after waiting for some time.

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Question 11: Where do you see your business after 5 years?
Where do you see your business after 5 years Frequency 12 6 1 10 1 30 Percent 40.0 20.0 3.3 33.3 3.3 100.0 Valid Percent 40.0 20.0 3.3 33.3 3.3 100.0 Cumulativ e Percent 40.0 60.0 63.3 96.7 100.0

Valid

NR Having 10 branches 1 crore revenue per month To be number one broker others Total

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Where do you see your business after 5 years
14 12 10 8 6

Frequency

4 2 0 NR 1 crore revenue per Having 10 branches To be number one bro others

Where do you see your business after 5 years

Analysis:

Majority (40%) of the respondents were not interested in revealing their goals, however out of the responses received 33% wants to be a no. 1 broker of their respective area.

Question 12: In order to achieve the goal what kind of support they require?

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BRND_VAL Frequency 4 1 1 2 22 30 Percent 13.3 3.3 3.3 6.7 73.3 100.0 Valid Percent 13.3 3.3 3.3 6.7 73.3 100.0 Cumulativ e Percent 13.3 16.7 20.0 26.7 100.0

Valid

NR Rank Rank Rank Rank Total

1 2 3 4

SUCSCALL Frequency 4 6 12 7 1 30 Percent 13.3 20.0 40.0 23.3 3.3 100.0 Valid Percent 13.3 20.0 40.0 23.3 3.3 100.0 Cumulativ e Percent 13.3 33.3 73.3 96.7 100.0

Valid

NR Rank Rank Rank Rank Total

1 2 3 4

BCKOFF Frequency 3 14 6 7 30 Percent 10.0 46.7 20.0 23.3 100.0 Valid Percent 10.0 46.7 20.0 23.3 100.0 Cumulativ e Percent 10.0 56.7 76.7 100.0

Valid

NR Rank 1 Rank 2 Rank 3 Total

Marketing & business Development support Frequency 1 9 7 10 3 30 Percent 3.3 30.0 23.3 33.3 10.0 100.0 Valid Percent 3.3 30.0 23.3 33.3 10.0 100.0 Cumulativ e Percent 3.3 33.3 56.7 90.0 100.0

Valid

NR Rank Rank Rank Rank Total

1 2 3 4

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Marketing & business Development support
12

10

8

6

4

Frequency

2

0 NR Rank 1 Rank 2 Rank 3 Rank 4

Marketing & business Development support

Analysis:

More than 50% of the respondents have ranked “Marketing & Business Development Support” either 1 or 2, which means this support plays an important role in the growth of the sub – brokers.

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5.3CROSS TAB ANALYSIS

Analysis - 1
Years since respondent is in the business * Length of the current setup Crosstabulation Count Length of the current setup <2yrs 2 to 5 yrs >5yrs 2 2 9 1 16 4 10 16 Total 2 11 17 30

Years since respondent is in the business Total

< 2yr 2 to 5yrs > 5yrs

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20

10

Length of the curren
<2yrs

Count

2 to 5 yrs 0 < 2yr 2 to 5yrs > 5yrs >5yrs

Years since respondent is in the business

An alysis:

✔ Majority of the Respondents have entered into the market with their own set up. ✔ Group which has experience more than 5 years also has its set up in place for more than 5 years. ✔ Hence the respondents (More than 50 %) have good hands on experience in running a set up. ✔ So Motilal Oswal should partner its Franchisee with these respondents because of their experience in running a setup.

Analysis – 2

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Years since respondent is in the business * Qualities attributed to be a successful broker Crosstabulation Count Qualities attributed to be a successful broker A culture of Higher researche ratio of d idea's succesful with good trading infra and All of the calls service above 2 4 2 5 9 3 5 15 5 10

Total 2 11 17 30

Years since respondent is in the business Total

< 2yr 2 to 5yrs > 5yrs

10

8

6

Qualities attributed
4 Higher ratio of succ esful trading calls 2 A culture of researc hed idea's with good 0 < 2yr 2 to 5yrs > 5yrs All of the above

Count

Years since respondent is in the business

Analysis:

✔ Higher ratio of successful calls given by broker is seems to be everybody’s choice.

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✔ Respondents who have experience more than 2 years are also emphasizing on research ideas coupled with good infrastructure. ✔ Apart from this few of the respondents believes that for a successful broker one cannot rely on any one particular quality, & one should try to have all the qualities.

Analysis – 3
Immediate challenges for the industry * Perception about the road ahead as an industry Crosstabulation Count Perception about the road ahead as an industry The next Recession cycle could would bot be bigger last longer than than 2 previous quarters one 2 7 12 21 3 6 9

Total 2 10 18 30

Immediate challenges for the industry

Lack of interest Fresh capital drying up in Indian and foriegn markets Cut cost & wait for good times

Total

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14

12

10

8

6

Perception about the
Recession would bot last longer than 2 q

4

Count

2 The next cycle could 0 Lack of interest Cut cost & wait for Fresh capital drying be bigger than prev

Immediate challenges for the industry

Analysis:

The above cross tab analysis shows that the respondent who is optimistic & wants to “cut down the cost & waiting for the good time to come” is also optimistic about the market & saying “recession would not last for more than 2 quarters” means he is not pessimist & can guide the customers in a right way telling them about the correct market scenario.

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Analysis – 4
Where do you see your business after 5 years * Marketing & business Development support Crosstabulation Count Marketing & business Development support NR Rank 1 Rank 2 Rank 3 Rank 4 1 2 1 6 2 4 1 1 1 2 1 9 4 7 4 10 3 Total 12 6 1 10 1 30

Where do you see your business after 5 years

NR Having 10 branches 1 crore revenue per month To be number one broker others

Total

1

7 6 5 4 3 2

M arketing & business
N R Rn 1 ak Rn 2 ak Rn 3 ak Rn 4 ak
N H 1 T th o o a R c v ro rs e

Count

1 0

e b

W here do you see your business after 5 years

g in 0 1 b ra n

re re v u n e e c e h s

m u n b e r o e n p r e ro b

Analysis:

✔ Around 40% of the respondents have not revealed about their goals. ✔ Out of the responses received, respondents who “want to have 10 branches” ranked Marketing & Business Development support as 1. ✔ Respondents who want “to be a number 1 broker of their area” have ranked this service as 2 & 3, as they do not wish to expand their branches.

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Where do you see your business after 5 years * BRND_VAL Crosstabulation Count NR Where do you see your business after 5 years NR Having 10 branches 1 crore revenue per month To be number one broker others 2 2 Rank 1 BRND_VAL Rank 2 1 Rank 3 2 Rank 4 8 3 1 1 4 1 1 2 9 1 22 Total 12 6 1 10 1 30

Total

Analysis – 5

1 0

8

6

B N _ A R DV L
N R Rn 1 ak

4

Count

2

Rn 2 ak Rn 3 ak

0 N R 1 cro re n e p r re ve u e H vin 1 b n e a g 0 ra ch s To b n m e o e b e u b r n ro o e th rs

Rn 4 ak

W ere do y se yo r bu ess afte 5 y rs h ou e u sin r ea

Analysis:
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Most of the big figures across categories are coming under rank 4, which means in achieving any of the goals mentioned brand value doesn’t play an important role.
Where do you see your business after 5 years * SUCSCALL Crosstabulation Count NR Where do you see your business after 5 years NR Having 10 branches 1 crore revenue per month To be number one broker others 2 2 SUCSCALL Rank 1 Rank 2 3 6 1 1 2 4 6 5 12 2 1 7 1 1 Rank 3 1 3 Rank 4 Total 12 6 1 10 1 30

Total

Analysis – 6

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7

6

5

4

S C C LL U S A
N R R ank 1

3

2 R ank 2

Count

1 0 N R 1 crore revenue per H aving 10 branches To be num one bro ber others

R ank 3 R ank 4

W here do you see your business after 5 years

Analysis:

Above cross tabulation shows that respondents who have their goal as “to be number 1 broker of their area” are ranking “Successful calls” as rank 1 & 2 as these respondents are not interested in expanding their horizons.

Analysis – 7

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Where do you see your business after 5 years * BCKOFF Crosstabulation Count NR Where do you see your business after 5 years NR Having 10 branches 1 crore revenue per month To be number one broker others 1 2 BCKOFF Rank 1 Rank 2 7 3 2 1 Rank 3 1 1 1 5 3 14 1 1 6 4 7 Total 12 6 1 10 1 30

Total

8 7 6 5 4 3 2

BC KOFF
NR Rank 1 Rank 2 Rank 3 NR 1 crore revenue per Having 10 branches To be num ber one bro others

Count

1 0

W here do you see your business after 5 years

Analysis:

✔ Respondents who want to be a no. 1 broker has ranked back office support as 1 or 3. ✔ None of the respondent has ranked back office support as 4

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5.4 Prospects Generated For Motilal Oswal Securities Ltd.

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Case Summariesa TOTAL 0 1 1 Total 1 2 3 4 5 6 7 8 9 10 11 Total 1 2 3 4 5 6 7 8 9 10 Total 1 2 3 4 5 6 7 8 Total N Type of broker Sub Broker N Sub Broker Sub Broker Sub Broker Sub Broker Sub Broker Sub Broker Sub Broker Sub Broker Sub Broker Sub Broker Sub Broker N Sub Broker Sub Broker Sub Broker Sub Broker Main Broker Sub Broker Sub Broker Main Broker Sub Broker Sub Broker N Sub Broker Sub Broker Sub Broker Sub Broker Sub Broker Sub Broker Sub Broker Sub Broker N 8 30 10 11 1 Name of repondent Pradeep Kumar 1 Rishab Jain Rahi Makkar Param Hans Gupta Ankur Gupta Aman Gaurav dhawan Jitendra Acchra Deepak Sanghwan Rahul Securities Pankaj Kumar Karni Kalra 11 Monu Kashyap Rajesh Jain Manu Singhal Harish Sharma Nitin Avnish Gupta Deepak Singhal Sunil garg Ashok Gupta Mahindra Pal 10 Rajiv Gupta Ajay Rastogi Adarsh Arora M.R. Sharma Gopal Prasad Gupta Ashish Kumar Dalmia Umesh Narang Sanjay Garg 8 30

2

3

Total

a. Limited to first 100 cases.

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Analysis:

This table represents the clients having 0, 1, 2 and 3 values. These values are calculated as the sum of three variables which were given either 1 or 0 value depending upon various responses given by respondents in the questionnaire. The clients having a sum as 3 are the best prospects as they wants to grow and wish to be associated with Motilal Oswal Securities Ltd. From the above table it is observed that, there are 8 prospects having a bright chance for becoming a part of Motilal Oswal Securities Ltd. as they filled their Questionnaire as follows:✔ Ranked Marketing - Business Development and Brand Value as 1 or 2. ✔ Experience more than 5 years or Want to cash out the brokerage opportunity in bull market. ✔ Having 10 branches or to be the number one broker of that area as his 5 year goal. The above 3 criterias were selected after a brain – storming session with all trainees & Company Mentor. These options suits best for a Motilal Prospect as it provides the Best Marketing-Business Development Support and is known for its Brand Value & Equity Research in the Industry.

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Chapter – 6 RECOMMENDATIONS

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6.1 RECOMMENDATIONS

Eight prospects have been generated out of the analysis of 30 respondents on different parameters. BAG department should approach these prospects only after doing the detailed study of their respective questionnaire as it will give them a good idea about the prospect & Conversation would become much easier & hence the chances of Conversion. Apart from concentrating on experienced players, Motilal Oswal should partner with the sub – brokers who are in group 2 – 5 years as they are enthusiastic & can also generate good volumes. Since Sub brokers are not concentrating on the marketing front, Motilal Oswal must expand its marketing & business development efforts for them. Since the survey results reveal that Customer care support is required by the sub brokers, Motilal Oswal expand on its customer care front by increasing the no. of customer care executives. Motilal Oswal should have some special packages for High net worth clients like, if any client who does a trading more than 1 crore in a day would be charged a brokerage of 2 paisa instead of 3 paisa & any other discount schemes would also work. Since Motilal Oswal is emerging as a good brand in Stock Broking industry, in order to capitalize on this front it must have a separate department of “Branding” which would look after its brand health & would channelize the efforts of Brand Building in an efficient & innovative manner. It would also help MOSL in increasing its market share. Motilal Oswal has a good presence at Sub – broker level but has a very little presence at the client level. To get that presence Television Advertising would be an expensive tool, so it must go with online marketing tools like, Video E – mailing etc. Motilal Oswal should come up with a bit Flexible model of franchisee where things can become a bit negotiable.

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6.2 CONCLUSION Motilal Oswal Securities Ltd. is seen as a reputed broking firm in the market. It has established itself as one of the leading brokerage firm of India. • MOSL is being perceived as a Strong Equity research Brokerage firm. • Maximum no. of respondents wants Marketing Business Development Support & Customer Care & Back Office Support.

Most of the respondents are ambitious & optimist even in the time of recession & they believe that recession would not last more than 2 quarters. When Target prospects being approached, I found that they need some flexibility in the franchisee model of the Motilal Oswal such as V – Sat expense was a big area of concern.

• Motilal Oswal is emerging as a good brand in the Broking Market. • Motilal Oswal is well known at Sub – broker level; however has a very less presence at the client level.

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Annexure

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Name Address Contact No:Registered as Landline ○ ○ Main Broker Sub Broker Mobile

Age

SURVEY QUESTIONNAIRE

1) How long have you been in this line? ○ Less than 2 years ○ 2 to 5 years ○ More than 5 years 1) What brought you to stock markets & made you think of a career in it? ○ Good short term profits ○ Cash out the brokerage opportunity in a bull market ○ Develop required skills to develop & service a large client base for a long time ○ Serve family accounts & HNI’s ○ Others please specify 1) Educational Background and did you undergo any formal training? ○ Basic qualification along with exchange required certifications. ○ Professional qualification along with exchange required certifications. ○ Additional self development & market related programmes
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1) How long has this set up been in place & your growth story? ○ Less than 2 years ○ 2 to 5 years ○ More than 5 years

1) What do you think are the qualities that attributed for you to be a successful broker? ○ The brand value of the company you are associated with. ○ Higher ratio of successful trading calls generated. ○ A culture of properly researched Ideas coupled with good infrastructure & client servicing. ○ All the above ○ Other please specify…… 1) What are the factors for having a satisfied client? ○ Prompt & timely addressing of client queries ○ Best technology in place ○ Thinking ahead of time & setting up infrastructure in line ○ All the above 1) What factors you feel still need to make your clients a satisfied lot?

2) What are the immediate challenges for this industry & your plan to tackle this? ○ Lack of interest in the stock markets in the retail category ○ Source for fresh capital drying up from both domestic & foreign investors ○ Cut costs & wait for good times to come
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○ Any other – Please specify 1) What is your perception about the road ahead for this industry? ○ Consolidation phase ○ We are in for a prolonged period of recession similar to 2000 – 2003 ○ Recession should not last longer than 2 more quarters ○ The next cycle could be bigger than the previous one. 1) Key Takeaway’s from your experience in the last 4 years, i.e. lessons learnt

2) Where do you see your business after 5 years? Having 10 branches, 1 cr revenue per month, to be number one broker of that area etc.)

3) What kind of support you require which will lead to next level. (Please give rating from 1 to 4; first priority will be ranked 1 and so on) ○ ○ ○ ○ Marketing and business development support Brand value of broker Successful calls given by broker Back office/customer care support

1) To be successful entrepreneur what do you think which quality one should have?
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Survey Done by

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APPENDIX

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Bibliography
✔ Books 1. Market Research by G.C. Beri. 2. Business Research Methods by Donald R. Cooper, Pamela S. Schindler, Cooper Donald. ✔ Websites ➢ www.wikipedia.com ➢ www.nseindia.com ➢ www.sebi.org ➢ www.motilaloswal.com ➢ www.moneycontrol.com ➢ www.valuenotes.com ➢ www.google.com

Besides this, data was also collected from the literature survey of the company’s Documents and by the way of Discussions.

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