PROJECT REPORT

ON

MUTUAL FUND INVESTMENT

MADE BY -:

SAHIL HANS
ECONOMICS (H)
SRI VENKATESWARA COLLEGE , DU
 ACKNOWLEDGEMENT

I take this opportunity to express my profound gratitude and

deep regards to my guide Mentor, for his exemplary guidance,
monitoring and constant encouragement throughout the
course of this training. The blessing, help and guidance given by
him time to time shall carry me a long way in the journey of life
on which I am about to embark. I also take this opportunity to
express a deep sense of gratitude to Mr. Kuldeep Kumar Mittal,
DGM, and Mr. Anil Sharma (Senior Manager) , Indiabulls
Housing Finance Limited (IBHFL), for their cordial support,
valuable information and guidance, which helped me in completing
this task through various stages. I am obliged to staff members of
IBHFL , for the valuable information provided by them in their
respective fields. I am grateful for their cooperation during the
period of my assignment. Lastly, I thank almighty, my parents,
brother, sisters and friends for their constant encouragement
without which this assignment would not be possible.

- Sahil Hans
 CONTENTS

SNO. PARTICULARS
1 About Indiabulls And Its History

2 Financial Highlights And SWOT Analysis

3 Mutual Funds And Investment Strategies

4 Sector Overview

5 Data Analysis & Interpretation

6 Conclusion

7 Suggestions &Recommendations

8 Bibliography
 ABOUT INDIABULLS AND
ITS HISTORY
The Indiabulls Group is an Indian conglomerate headquartered in
Gurgaon, India. It was founded by Mr. Sameer Gehlaut (Chairman) in
1999, and operates in sectors spread across housing finance, real estate
& wealth management. The three main independently listed companies
of the group are Indiabulls Housing Finance Limited (IBHFL), Indiabulls
Real Estate Limited (IBREL), and Indiabulls Ventures Limited (IBVL).[2]
The Indiabulls Group has a net worth of 153.32 billion (US$2.4 billion)
as of 30 June 2015 and is one of the top dividend paying groups
amongst the Indian listed promoter owned group/companies.[3]
In 2013, Indiabulls Financial Services reverse merged with its own
subsidiary Indiabulls Housing Finance to form the flagship company of
the group.[4]
Its corporate office is Indiabulls Finance Centre, Elphinstone, Mumbai.
It has a presence across India and representative offices in UK and
Dubai.

Indiabulls Housing Finance Limited

Indiabulls Housing Finance (IBHFL) was incorporated in May 2005 as a

subsidiary of Indiabulls Financial Services Ltd., registered as a Housing
Finance Company and regulated by National Housing Bank. It provides
Home loans and Loan against Property to individuals and corporates for
purchase/construction of residential property. IBHFL is the 2nd largest
private housing finance company in India by profits. The company has a
loan book of 540.22 billion (US$8.4 billion). And it has cumulatively
disbursed loans of over 1 trillion (US$16 billion) as of June 30, 2015.
The companys average ticket size for home loans is 2.4
million (US$37,000) and average tenure is 15 years.[7][8][9] The Company
has the highest long term credit rating of from CARE and Brickwork
ratings and AA+ from CRISIL and ICRA.

Indiabulls Real Estate Limited

Indiabulls Real Estate was incorporated in the year 2005 with the focus
on construction and development of residential, commercial & SEZ
projects across major Indian Metros & London. It is the 3rd largest real
estate company in India by net worth and assets, with a total Gross
Development Value of 349.6 billion (US$5.4 billion) and net worth
of 72.18 billion (US$1.1 billion), as of June 30, 2015.
IBREL has presence in key Indian metrosMumbai, Delhi and Chennai.
Currently it has 10 ongoing projects in India with total saleable area of
30.14m sqft, and 5 new projects are planned to be launched shortly
with total saleable area of 7.87 m sqft. Additionally the company has a
fully paid for land bank of 1,017 acres & also possesses 2,588 acres of
SEZ land at Nashik, Maharashtra.
Indiabulls Real Estate has delivered two commercial towers in
MumbaiOne Indiabulls Centre & Indiabulls Financial Centre with over
3m sqft space, apart from delivering projects in Madurai, Ahmedabad
and Thane. Recently, Indiabulls Real estate acquired the prime
property, 22 Hanover Square in central London for 16.3
billion (US$250 million).
Indiabulls Ventures Limited
Indiabulls Ventures (formerly Indiabulls Securities) is an Indian Capital
Markets company providing securities broking and advisory services. It
provides services like Securities Broking, Advisory, Depository and
Equity Research services and offers commodities trading through a
separate company. These services are provided both through on-line
and off-line distribution channels. Its in-house trading platform is called
Power Indiabulls.[13][14] Indiabulls Ventures has been assigned the
highest broker quality rating BQ-1 by CRISIL.

Social Responsibility
Indiabulls Foundation (Indiabulls Groups CSR Arm) was set up in
January, 2010 to provide an impetus to various social initiatives by
Indiabulls Group. The foundation supports inclusive growth in India
through focused initiatives in the identified areas of Health, Education,
Sanitation, Nutrition, Disaster Relief and Sustainable Livelihoods.
Financial Highlights And SWOT
Analysis
 MUTUAL FUNDS
A Mutual Fund is nothing more than a collection of stocks
and/or bonds. You can think of a mutual fund as a company
that brings together a group of people and invests their money
in stocks, bonds, and other securities. Each investor owns
shares, which represent a portion of the holdings of the fund.
You can make money from a mutual
fund in three ways:

Income is earned from dividends on stocks and interest on

bonds. A fund pays out nearly all of the income it receives
over the year to fund owners in the form of a distribution.

If the fund sells securities that have increased in price, the

fund has a capital gain. Most funds also pass on these
gains to investors in a distribution.

If fund holdings increase in price but are not sold by the

fund manager, the fund's shares increase in price. You can
then sell your mutual fund shares for a profit.

Funds will also usually give you a choice either to

receive a check for distributions or to reinvest the
earnings and get more shares.

When an investor subscribes for the units of a

mutual fund, he becomes part owner of the assets
of the fund in the same proportion as his
contribution amount put up with the corpus (the
total amount of the fund). Mutual Fund investor is
also known as a mutual fund shareholder or a unit
holder.
Advantages of Mutual
Funds:

Professional Management - The primary

advantage of funds is the professional management of
your money. Investors purchase funds because they do
not have the time or the expertise to manage their own
portfolios. A mutual fund is a relatively inexpensive way
for a small investor to get a full-time manager to make and
monitor investments.

Diversification - By owning shares in a mutual

fund instead of owning individual stocks or bonds, your risk is
spread out. The idea behind diversification is to invest in a
large number of assets so that a loss in any particular
investment is minimized by gains in others. In other words,
the more stocks and bonds you own, the less any one of
them can hurt you (think about Enron). Large mutual funds
typically own hundreds of different stocks in many
different industries. It wouldn't be possible for an investor
to build this kind of a portfolio with a small amount of
money.

Economies of Scale - Because a mutual fund

buys and sells large amounts of securities at a time, its
transaction costs are lower than what an individual would
pay for securities transactions. - Because a mutual fund
buys and sells large amounts of securities at a time, its
transaction costs are lower than what an individual would
pay for securities transactions.

Liquidity - Just like an individual stock, a mutual fund

allows you to request that your shares be converted into
cash at any time.

Simplicity - Buying a mutual fund is easy! Pretty well

any bank has its own line of mutual funds, and the
minimum investment is small. Most companies also have
automatic purchase plans whereby as little as $100 can be
invested on a monthly basis.

Disadvantages of
Mutual Funds:

Professional Management - Many investors

debate whether or not the professionals are any better
than you or I at picking stocks. Management is by no
means infallible, and, even if the fund loses money, the
manager still gets paid.
Costs - Creating, distributing, and running a mutual
fund is an expensive proposition. Those expenses are passed on
to the investors. Since fees vary widely from fund to fund,
failing to pay attention to the fees can have negative longterm
consequences. Remember, every dollar spend on
fees is a dollar that has no opportunity to grow over time.

Dilution - It's possible to have too much

diversification. Because funds have small holdings in so many
different companies, high returns from a few investments often
don't make much difference on the overall return. Dilution
is also the result of a successful fund getting too big. When
money pours into funds that have had strong success, the
manager often has trouble finding a good investment for
all the new money.

Taxes - When a fund manager sells a security, a

capitalgains tax is triggered. Investors who are concerned about
the impact of taxes need to keep those concerns in mind
when investing in mutual funds. Taxes can be mitigated by
investing in tax-sensitive funds or by holding non-tax sensitive
mutual fund in a tax-deferred account.
Mutual funds can be
classified as follows:

Based on their structure:

Open-ended funds: Investors can buy and sell the

units from the fund, at any point of time.
Close-ended funds: These funds raise money from
investors only once. Therefore, after the offer period,
fresh investments can not be made into the fund. If
the fund is listed on a stocks exchange the units can be
traded like stocks (E.g., Morgan Stanley Growth Fund).

Based on their investment objective:

Equity funds: These funds invest in equities

and equity related instruments. With fluctuating
share prices, such funds show volatile
performance, even losses. However, short term
fluctuations in the market, generally smoothens
out in the long term, thereby offering higher
returns at relatively lower volatility. At the same
time, such funds can yield great capital
appreciation as, historically, equities have
outperformed all asset classes in the long term.
Hence, investment in equity funds should be
considered for a period of at least 3-5 years. It
can be further classified as:

i) Index funds- In this case a key stock market index,

like BSE Sensex or Nifty is tracked. Their portfolio
mirrors the benchmark index both in terms of
composition and individual stock weightages.

ii) Equity diversified funds- 100% of the capital is

invested in equities spreading across different sectors
and stocks.

iii) Dividend yield funds- it is similar to the equity

diversified funds except that they invest in companies
offering high dividend yields.

iv) Thematic funds- Invest 100% of the assets in

sectors which are related through some theme.
e.g. -An infrastructure fund invests in power,
construction, cements sectors etc.

v) Sector funds- Invest 100% of the capital in a

specific sector. e.g. - A banking sector fund will invest
in banking stocks.

vi) ELSS- Equity Linked Saving Scheme provides tax

benefit to the investors.
Balanced fund: Their investment portfolio
includes both debt and equity. As a result, on the
risk-return ladder, they fall between equity and
debt funds. Balanced funds are the ideal mutual
funds vehicle for investors who prefer spreading
their risk across various instruments. Following
are balanced funds classes:

i) Debt-oriented funds - Investment below 65% in

equities.

ii) Equity-oriented funds- Invest at least 65% in

equities, remaining in debt.

Debt fund: They invest only in debt

instruments, and are a good option for investors
averse to idea of taking risk associated with
equities. Therefore, they invest exclusively in
fixed-income instruments like bonds,
debentures, Government of India securities; and
money market instruments such as certificates of
deposit (CD), commercial paper (CP) and call
money. Put your money into any of these debt
funds depending on your investment horizon and
needs.

i) Liquid funds- These funds invest 100% in money

market instruments, a large portion being invested in
call money market.
ii) Gilt funds ST- They invest 100% of their portfolio in
government securities of and T-bills.

iii) Floating rate funds- Invest in short-term debt

papers. Floaters invest in debt instruments which
have variable coupon rate.

iv) Arbitrage fund- They generate income through

arbitrage opportunities due to mis-pricing between
cash market and derivatives market. Funds are
allocated to equities, derivatives and money markets.
Higher proportion (around 75%) is put in money
markets, in the absence of arbitrage opportunities.

v) Gilt funds LT- They invest 100% of their portfolio in

long-term government securities.

vi) Income funds LT- Typically, such funds invest a

major portion of the portfolio in long-term debt
papers.

vii) MIPs- Monthly Income Plans have an exposure of

70%-90% to debt and an exposure of 10%-30% to
equities.

viii) FMPs- fixed monthly plans invest in debt papers

whose maturity is in line with that of the fund.
INVESTMENT
STRATEGIES

Systematic Investment Plan- under this a fixed

sum is invested each month on a fixed date of a
month. Payment is made through post dated
cheques or direct debit facilities. The investor
gets fewer units when the NAV is high and more
units when the NAV is low. This is called as the
benefit of Rupee Cost Averaging (RCA)

Systematic Transfer Plan- under this an investor

invest in debt oriented fund and give instructions
to transfer a fixed sum, at a fixed interval, to an
equity scheme of the same mutual fund.

Systematic Withdrawal Plan- if someone wishes

to withdraw from a mutual fund then he can withdraw a fixed
amount each month.
SECTOR OVERVIEW

INDIAN FINANCIAL SERVICES INDUSTRY

India is a large and growing economy with rapidly

expanding financial services sector. The sector has
witnessed a transformation over the last decade as a
result of the economic liberalization which started in 1991.
Reforms are continuing as part of the overall structural
reforms aimed at improving the productivity and efficiency
of the economy. The role of an integrated financial
infrastructure is to stimulate and sustain economic
growth.
The US$28 billion Indian financial services sector has
grown at around 15 per cent and has displayed stability for
the last several years, even when other markets in the
Asian region were facing a crisis. This stability was ensured
through the resilience that has been built into the system
over time. The financial services sector has kept pace with
the growing needs of corporate and other borrowers.
Banks, capital market participants, insurers and mutual
fund companies have developed a wide range of products
and services to suit varied customer requirements.
The Reserve Bank of India (RBI) has successfully
introduced a regime where interest rates are more in line
with market forces. Financial institutions have combated
the reduction in interest rates and pressure on their
margins by constantly innovating and targeting attractive
consumer segments. Banks and trade financiers have also
played an important role in promoting foreign trade of the
country.

CAPITAL MARKETS
The Indian capital markets have undergone a
substantial change over the last decade. The market has
also witnessed substantial progress in terms of regulatory
reforms, application of technology to trading and
settlement, and sophistication of listed securities including
single stock futures and options. These have been
accompanied by an accelerated growth in trading volumes,
with BSE and NSE combined average daily turnover
expanding approximately from Rs.4800 million in 1995-96
to approximately Rs.232,094 million in April 2004.
India is now placed among the mature markets of the
world. With over 20 million shareholders, India has the
third largest investor base in the world after USA and
Japan. Regulatory changes, increased capital requirement,
greater customer sophistication and application of
technology have forced the brokerage industry to
consolidate.
Over the last 7 years, the market share of the top 5
brokers has increased from 6% (1996-97) to 13%
(December, 2003), with most of the consolidation coming
in the last 2 years. The consolidation in the online business
is even greater, with the top 5 players owning more than
90% of the market. This consolidation is expected to
continue, and provide an opportunity for the top broker to
own 15% market share or more over the next 3-4 years.

INSURANCE SECTOR
With the opening of the market, foreign and private Indian
players are keen to convert untapped market potential
into opportunities by providing tailor-made products. The
presence of a host of new players in the sector has
resulted in a shift in approach and the launch of innovative
products, services and value-added benefits. Foreign
majors have entered the country and announced joint
ventures in both life and non-life areas.
Major foreign players include New York Life, Aviva,
Tokio Marine, Allianz, Standard Life, Lombard General,
AIG, AMP and Sun Life among others. With competition,
the erstwhile state sector companies have become
aggressive in terms of product offerings, marketing and
distribution. The Insurance Regulatory and Development
Authority (IRDA) has played a proactive role as a regulator
ad a failitato i the setos deelopet. The size of
the market presents immense opportunities to new
players ith oly 20 pe et of the outys isuale
population currently insured.
There are four public sector and nine private sector
insurance companies operating in general/non-life
insurance business with a premium income of over US$
2.58 billion. The markets potetial has ee estiated to
have a premium income of US$ 80 billion with a potential
size of over 300 million people. The General Insurance
Corporation (GIC) (which covers the non-life sector) had a
total premium income of US$ 2 billion in 2001-02. This has
the potential to reach US$ 9 billion in the next five years.

Mutual Funds Sector

Over the past ten years, the Indian mutual fund
industry has been one of the fastest growing sectors in the
Indian capital and financial markets. The industry has
grown in size by about 200 percent from March 1993 to
December 2003, at Rs.1.40 trillion in terms of assets under
management. The rapid growth has led to considerable
changes in regulation, the structure of funds available and
the composition of net assets across various industry
segments,as well as in the portfolio of investment funds.
Other financial services sectors are growing rapidly
too, partly fuelled by recent structural changes, such as
the opening up of the Insurance sector for private
insurance companies as stated above, and increased
investor appetite for market linked instruments (such as
equities, mutual funds etc.) due to the rapid decline in
local interest rates and commensurate reduction in
attractiveness of fixed income instruments. The retail
financial services sector is expected to grow at very high
rates and the market share leaders will be able to enjoy
exceptional growth if they can execute on providing
diversified services at low cost to a large number of clients
with world class service standards.
Data Analysis &
Interpretation
Interpretation:

Income earned by IBSFL , out of Rs.16,35,04,04,283

Profit, mutual fund contribute by Dividend income on
units of mutual funds and on equity is Rs.216525008
, therefore 1.4% total income is earned through
mutual fund investment in the market through In House
analysis team which is low risk investment.
Interpretation:
Indiabulls have policy to invest some money in mutual
fund because of the following reason some are as follows:

Liquidity: Mutual fund investment have high

degree of liquidity as compared to other investments if made.

To maintain the cash balance: Indiabulls have to

maintain the cash balance as may be required as
per daily basis. And excess is transferred for
investment in mutual funds.

Moderate Risk: Top performing mutual fund

gives better returns then the bank interest rate .
If invested wisely in mutual fund that gives good
return as compared to moderate risk .

Out of 100 % money invested in mutual

funds, 30 % money invested in mutual fund for
the basis of liquidity, 60 % to maintain the cash
budget.
 CONCLUSION
Investing in mutual fund is good investing plan and good
use of mobilization of resources as a risk associated with
the investment is low and it is a good option to keep liquid
asset like in mutual fund because at the time in demand of
liquid cash liquid asset i.e. mutual fund NCD can be sold and
arrangement of fund can be done but to be successful in
Mutual Fund requires complete understanding of the
peculiarities of the Indian Stock Market that Indiabulls in
house department is doing before investing in mutual fund.
This study has made an attempt to understand the financial
behavior of Mutual Fund investors in connection with the
preferences of Brand (AMC), Products, Channels etc.
I observed that many of people have fear of Mutual Fund.
They think their money will not be secure in Mutual Fund.
They need the knowledge of Mutual Fund and its related
terms. Many of people do not have invested in mutual fund
due to lack of awareness although they have money to
invest. As the awareness and income is growing the number
of mutual fund investors are also growing.

Brand plays important role for the investment.

People invest in those Companies where they have faith or

they are well known with them. There are many AMCs in
India but only some are performing well due to Brand
awareness. Some AMCs are not performing well although
some of the schemes of them are giving good return
because of not awareness about Brand. Reliance, UTI,
SBIMF, ICICI Prudential etc. they are well known Brand,
they are performing well and their Assets Under
Management is larger than others whose Brand name are
not well known like Principle, Sunderam, etc.
Distribution channels are also important for the
investment in mutual fund. Financial Advisors are the most
preferred channel for the investment in mutual fund. They
can change investors mind from one investment option to
others.
Many of investors directly invest their money
through AMC because they do not have to pay entry load.
Only those people invest directly who know well about
mutual fund and its operations and those have time.
SUGGESTIONS AND
RECOMMENDATIONS

The most vital problem spotted is of ignorance.

Investors should be made aware of the benefits.
Nobody will invest until and unless he is fully
convinced. Investors should be made to realize that
ignorance is no longer bliss and what they are losing by
not investing.

Mutual funds offer a lot of benefit which no other

single option could offer. But most of the people are
not even aware of what actually a mutual fund is?
They only see it as just another investment option. So
the advisors should try to change their mindsets. The
advisors should target for more and more young
investors. Young investors as well as persons at the
height of their career would like to go for advisors due
to lack of expertise and time.

Mutual Fund Company needs to give the training of

the Individual Financial Advisors about the
Fund/Scheme and its objective, because they are the
main source to influence the investors.

Before making any investment Financial Advisors

should first enquire about the risk tolerance of the
investors/customers, their need and time (how long
they want to invest). By considering these three things they can
take the customers into consideration.
 BIBLIOGRAPHY
https://www.indiabulls.com/ib-housing-finance/

https://www.indiabulls.com/

https://en.wikipedia.org/wiki/Indiabulls

Mutual Fund Hand Book

www.mutualfundsindia.com

www.investopedia.com