A REPORT

ON

“PORTFOLIO MANAGEMENT”

INDIA INFOLINE SECURITIES LIMITED

SUBMITTED BY:

ROHIT PRABHU
18BSP0956

1
 A REPORT
ON

“PORTFOLIO MANAGEMENT”

SUBMITTED BY:
ROHIT PRABHU
18BSP0956

INDIA INFOLINE SECURITIES LIMITED

A report submitted in partial fulfilment of the requirements of PGPM

program of IBS Mumbai.

Submitted to:

Company Guide Faculty Guide

Mr. Ketan Bhatia. Dr. Anil Mahajan.

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 Acknowledgement

The internship opportunity I had with India Infoline Securities Limited, was
very helpful for learning and developing my professional skills. I feel very
lucky that I got an opportunity to be part of IIFL. It helped me to develop my
ability to work in teams. Our mentor and the trainers always motivated us. I am
grateful that I got an opportunity to get trained under such generous people.

I am using this opportunity to express my gratitude and special thanks to my

mentor, MR. Ketan Bhatia, Regional manager, who inspite of being so
engaged in his duties always took time to hear and guide me on the correct path.

I am grateful to have Dr. Anil Mahajan, as my faculty guide, who was always
there to support me and guide me. Thank you Sir for giving your valuable time
and extending your knowledge and views.

I am thankful to IBS, Mumbai for giving me this marvellous opportunity.

-Rohit Prabhu

18BSP0956

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 TABLE OF CONTENT

Chapter 1 Abstract 5
Chapter 2 Introduction

2.1 Overview of the company 6

2.2SWOT Analysis 7
2.3About the sector 9
2.4 Need for selecting the Project 11
Chapter 3 Main Text
3.1 Introduction to subject 12
3.2 Introduction to project 14
3.3 various investment options 17
Chapter 4 Bibliography
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Chapter 1
Abstract
I started my summer internship program at “IIFL” from 19th February 2019. We
were given training sessions at the organization, the training included briefing
about stock markets,PMS, commodity markets, Mutual Funds and how to carry
out research work using Fundamental and technical analysis. They taught us
various fundamental ratios and techniques to analyse stock of a particular
sector.

For a 2 months period we were given target for lead generation and I completed
the target within the given time. We did live trading so that we can understand
how stocks move and how we can invest in stock market after studying the
particular stock and analyzing it with the help of technical charts and
fundamental analysis. We were given a task to do research and study about the
“Equity markets”. We did research in detail about few companies which were
traded the most. After completing the research work we were asked to give
presentation.

At present we are doing research on sectors of our choice and studying about
the sector and then analysing top companies from that particular sector and
carrying out Fundamental and Technical analysis of that companies and
comparing it with its peers and suggesting whether investment in that particular
companies is profitable or not.

Currently I am working out my research on the companies and comparing it

with its peers amongst the industry. At present I have started trading in stock
market for the practical understanding of the markets. I have invested in various
stocks based on my research using the basics of technical studies and charts for
intraday and investment purpose.

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Chapter 2
Introduction

2.1 Overview of the Company

IIFL is a financial services conglomerate which was started by a group of

passionate entrepreneurs in 1995.

The genesis of IIFL lies in the power of dreaming big and believing in your
dreams.

IIFL was the pioneer in the retail broking industry with its launch of 5paisa
trading platform which offered the lowest brokerage in the industry and the
freedom from traditional ways of transacting.

IIFL’s evolution from an entrepreneurial start-up in 1995 to a full range

diversified financial services group is a story of steady growth by adapting to
the dynamic business environment, without losing focus on our core domain of
financial services.

Today, IIFL Holdings Limited (Bloomberg Code: IIFL IN, NSE: IIFL, BSE:
532636) is India’s leading integrated financial services group with diverse
operating businesses, mainly, Non Banking and Housing Finance, Wealth and
Asset Management, Financial Advisory and Broking, Mutual Funds and
Financial Product Distribution, Investment Banking, Institutional Equities,
Realty Broking and Advisory Services.

IIFL serves more than 4 million satisfied customers across various business
segments and is continuously building on its strengths to deliver excellent
service to its expanding customer base.

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VISION
To be the most respected financial Services Company in India.

MISSION
Their strategy has been to align their capabilities and market insights to the
country’s rapidly changing business environment. Their growth trajectory has
only served to reinforce their focus on their domain of financial services.

VALUES
Their core values Serving as moral compass in all their dealing. Fairness,
Integrity and Transparency – FIT is the driving force behind all they do in IIFL

2.2 SWOT ANALYSIS

Parent company: India Infoline Ltd.

Category: Brokerage Houses, Consumer Financial Services.

Tagline: Knowledge is the edge; it’s all about money, honey.

USP: One of the leading players in the Indian financial services space.

STP
i. SEGMENT: Brokerage.
ii. TARGET GROUP: Urban and Rural Investors.
iii. POSITIONING: Complete Investment and Stock trading Solutions.
SWOT ANALYSIS
STRENGTHS
1. Wide range of financial products
2. Successful implementation of “Insurance broking” model
3. Online portal’s successful branding as “5paisa.com”

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4. Have over 2500 offices in India in over 500 cities
5. First Indian brokerage house to get membership of Singapore Exchange
6. IIFL has been awarded the ‘Best Broker, India’, ‘Most improved brokerage,
India’, ‘Fastest Growing Equity Broking House’

WEAKNESS
1. High risk exposure as seen by conservative population
2. Less emphasis on advertising causes lack of brand visibility

OPPORTUNITY
1. High income urban families
2. More penetration into the growing cities

THREATS
1.Stringent Economic measures by Government and RBI
2. Entry of foreign finance firms in Indian Market

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 2.3 About the sector

What is a Portfolio?

A Portfolio is a blend of various speculation resources blended and coordinated

to achieve a financial specialist's goal(s). Things that are considered a some
portion of your portfolio can incorporate any advantage you possess from
offers, debentures, securities, and common reserve units to things, for example,
gold, craftsmanship and even land and so forth. In any case, for most financial
specialists a portfolio has come to connote an interest in money related
instruments like offers, debentures, fixed stores, shared reserve units.

What is Diversification?

It is a risk management technique that mixes a wide variety of investments

within a portfolio. It is designed to minimize the impact of any one security on
overall portfolio performance. Diversification is possibly the best way to reduce
the risk in a portfolio.

What are the advantages of having a diversified portfolio?

A decent venture portfolio is a blend of a wide scope of benefit class.

Extraordinary securities perform contrastingly anytime, so with a blend of
benefit types, your whole portfolio does not endure the effect of a decay of any
one security. At the point when your stocks go down, you may in any case have
the strength of the bonds in your portfolio. There have been a wide range of
scholarly examinations and equations that show why broadening is critical,
however it's actually simply the straightforward routine with regards to "not
putting all your investments tied up on one place." If you spread your ventures
crosswise over different kinds of advantages and markets, you'll diminish the

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hazard of your whole portfolio getting influenced by the unfriendly returns of
any single resource class.

What is Portfolio Management?

Portfolio management is the art and science of making decisions about

investment mix and policy, matching investments to objectives, asset allocation
for individuals and institutions, and balancing risk against performance.
Portfolio management is all about determining strengths, weaknesses,
opportunities and threats in the choice of debt vs. equity, domestic vs.
international, growth vs. safety, and much other trade-offs encountered in the
attempt to maximize return at a given appetite for risk.

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2.4 NEED FOR SELECTING THE PROJECT

 To get the general information of securities and speculation.

 To know how the speculation made in various securities limits the hazard
and expands the profits.
 To get the information of various elements that influences the venture
choice of speculators.
 To realize how extraordinary organizations are dealing with their
portfolio for example at the point when and in which parts they are
contributing.
 To recognize what is the need of selecting a Portfolio Manager and how
can he addresses the issues of the different financial specialists.
 To get the learning about the job (played) and elements of portfolio
administrator.
 To get the learning of venture choice and resource portion.

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Chapter 3
MAIN TEXT
3.1 Introduction to the subject

Equity Research
Equity Research fundamentally implies breaking down organization's financials,
perform proportion examination, Equity look into is tied in with finding the
valuation of a recorded organization (Listed organizations exchange on stock
trade like NYSE or NASDAQ and so forth

When you have the organization under thought, you take a gander at the
financial angles like GDP, development rates, advertise size of the business and
the challenge perspectives and so forth.

When you comprehend the financial matters behind the business, play out the
fiscal report investigation of the chronicled monetary record, money streams
and pay explanation to frame a sentiment on how the organization did before.

In view of the executives' desire, chronicled exhibitions and industry rivalry,

venture the budget summaries like the BS, IS and CFs of the organization.
(Likewise called as Financial Modelling in Equity Research)

Utilize the Equity valuation models like DCF, Relative valuations, aggregate of
parts valuation the organization

Figure the Fair cost dependent on the above models and contrast the reasonable
cost and the Current Market Price (stock trade)

On the off chance that the Fair Price < Current Market Price, at that point the
organization stocks are exaggerated and ought to be prescribed as a SELL.

On the off chance that the Fair Price > Current Market Price, at that point the
organization shares are underestimated and ought to be prescribed as a BUY.

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Role of equity research

Equity Research assumes a basic job that fills the data hole between the
purchasers and dealers of offers.

Reason is that at all dimensions (individual or institutional) might not have

the assets or the abilities to break down each stock.

Furthermore, full data isn't given by the administration because of which

further in-efficiencies are made and stocks exchange underneath or over the
reasonable esteem.

Equity Research examiner invests a great deal of time, vitality and skill to
dissect stocks, pursue news, conversing with the administration and give a
gauge of stock valuations.

Additionally, value look into attempts to recognize the esteem stocks out of
the enormous sea of stocks and help the purchasers to create benefits.

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 3.2 Introduction to Project

Portfolio Management

Portfolio management in common parlance refers to the selection of

securities and their continuous shifting in the portfolio to optimize returns to
suit the objectives of an investor. This however requires financial expertise
in selecting the right mix of securities in changing market conditions to get
the best out of the stock market. In India, as well as in a number of western
countries, portfolio management service has assumed the role of a
specialized service now a days and a number of professional merchant
bankers compete aggressively to provide the best to high net worth clients,
who have little time to manage their investments. The idea is catching on
with the boom in the capital market and an increasing number of people are
inclined to make profits out of their hard-earned savings.

SCOPE OF PORTFOLIO MANAGEMENT:

Portfolio the executives is a specialty of placing cash in genuinely sheltered,
very beneficial and sensibly in fluid structure. A financial specialist's endeavour
to locate the best mix of hazard and return is the first and typically the chief
objective. In picking among various speculation openings the accompanying
angles chance administration ought to be considered:

a) The determination of a dimension or hazard and return that mirrors the

speculator's resilience for hazard and want for return, for example individual
inclinations.

b) The administration of speculation choices to grow the arrangement of

chances accessible at the financial specialist’s satisfactory hazard level.

The very hazard disinclined financial specialist may put resources into common
assets. The more hazard tolerant financial specialist may pick shares, on the off
chance that they offer higher returns. Portfolio the board in India is still in its
outset. A speculator needs to pick a portfolio as per his inclinations. The
primary inclination ordinarily goes to the necessities and solaces like obtaining
a house or local apparatuses. His second inclination goes to some authoritative
commitments, for example, extra security or provident assets. The third
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inclination goes to make an arrangement for reserve funds required for making
everyday instalments. The following inclination goes to momentary
speculations, for example, UTI units and mail station stores which give simple
liquidity. The last decision goes to interest in organization shares and
debentures. There are number of decisions and choices to be assumed the
premise of the traits of hazard, return and tax reductions from these offers and
debentures. An official conclusion is taken on the premise of choices,
characteristics and financial specialist inclinations. For most speculators it is
unimaginable to expect to pick between dealing with one's very own portfolio.
They can employ an expert supervisor to do it. The expert chiefs give an
assortment of administrations counting enhancement, dynamic portfolio the
board, fluid securities and execution of obligations related with monitoring
financial specialist's cash.

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 3.2 Fundamental Analysis

It is a logical and systematic approach of forecasting the future dividend

and share price as these are the returns generated from investment made in
shares. It involves analysis of financial aspects such as revenues, expenses,
assets, liabilities, which is known as quantitative analysis. And qualitative
analysis involves breakdown of all intangible, difficult-to-measure aspects
of a company.

Fundamental analysis involves:

i. Understanding of the macroeconomic environment.
ii. Analysing the prospects of the Industry.
iii. Assessing the estimated performance of the company.

3.2 TECHNICAL ANALYSIS :

In fundamental analysis, a value of a stock is predicted with risk-return
framework based on economic environment. An alternative approach to predict
stock price behaviour is known as technical analysis. It is frequently used as a
supplement rather than as a substitute to fundamental analysis. Technical
analysis is based on notion that security prices are determined by the supply of
and demand for securities. It uses historical financial data on charts to find
meaningful patterns, and using the patterns to predict future prices.
Edwards and Magee formulate the basic assumptions underlying technical
analysis:
• The interaction of supply and demand determines the market value of the
security.
• The various factors, both rational and irrational factors, govern the supply and
demand of the securities.
• Stock price tend to move in trend which persist for an appreciable length of
time.
• Changes in trend are caused by shifts in supply and demand.
• Shifts in supply and demand can be detected sooner or later in charts of
market action.
• Some chart patterns tend to repeat themselves. However, the fundamental
analysis estimates the intrinsic value of a security, while technical analysis
seeks to estimate security prices rather than value

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 3.3 What are various options available for investment?

One may invest in:

 Physical assets like real estate, gold/jewellery, commodities etc. and/or
 Financial assets such as fixed deposits with banks, small saving
instruments with post offices, insurance/provident/pension fund etc. or
securities market related instruments like shares, bonds, debentures etc.

What are various Short-term financial options available for

investment?

Savings Bank Account is often the first banking product people use, which
offers low interest (4%-5% p.a.), making them only marginally better than fixed
deposits.

Money Market or Liquid Funds are a specialized form of mutual funds that
invest in extremely short-term fixed income instruments and thereby provide
easy liquidity. Unlike most mutual funds, money market funds are primarily
oriented towards protecting your capital and then, aim to maximise returns.
Money market funds usually yield better returns than savings accounts, but
lower than bank fixed deposits.

Fixed Deposits with Banks are also referred to as term deposits and minimum
investment period for bank FDs is 30 days. Fixed Deposits with banks are for
investors with low risk appetite, and may be considered for 6-12 months
investment period as normally interest on less than 6 months bank FDs is likely
to be lower than money market fund returns.

What are various Long-term financial options available for

investment?

Post Office Savings: Post Office Monthly Income Scheme is a low risk saving
instrument, which can be availed through any post office. It provides an interest
rate of 8% per annum, which is paid monthly. Minimum amount, which can be
invested, is Rs. 1,000/- and additional investment in multiples of 1,000/-.

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Maximum amount is Rs. 3, 00,000/- (if Single) or Rs. 6,00,000/- (if held
Jointly) during a year. It has a maturity period of 6 years. A bonus of 10% is
paid at the time of maturity. Premature withdrawal is permitted if deposit is
more than one year old. A deduction of 5% is levied from the principal amount
if withdrawn prematurely; the 10% bonus is also denied.

Public Provident Fund: A long term savings instrument with a maturity of 15

years and interest payable at 8% per annum compounded annually. A PPF
account can be opened through a nationalized bank at anytime during the year
and is open all through the year for depositing money. Tax benefits can be
availed for the amount invested and interest accrued is tax-free. A withdrawal is
permissible every year from the seventh financial year of the date of opening of
the account and the amount of withdrawal will be limited to 50% of the balance
at credit at the end of the 4th year immediately preceding the year in which the
amount is withdrawn or at the end of the preceding year whichever is lower the
amount of loan if any. Company Fixed Deposits: These are short-term (six
months) to medium-term (three to five years) borrowings by companies at a
fixed rate of interest which is payable monthly, quarterly, semi-annually or
annually. They can also be cumulative fixed deposits where the entire principal
along with the interest is paid at the end of the loan period. The rate of interest
varies between 6-9% per annum for company FDs. The interest received is after
deduction of taxes.

Bonds: It is a fixed income (debt) instrument issued for a period of more than
one year with the purpose of raising capital. The central or state government,
corporations and similar institutions sell bonds. A bond is generally a promise
to repay the principal along with a fixed rate of interest on a specified date,
called the Maturity Date.

Mutual Funds: These are funds operated by an investment company which

raises money from the public and invests in a group of assets (shares,
debentures etc.), in accordance with a stated set of objectives. It is a substitute
for those who are unable to invest directly in equities or debt because of
resource, time or knowledge constraints. Benefits include professional money
management, buying in small amounts and diversification. Mutual fund units
are issued and redeemed by the Fund Management Company based on the
fund's net asset value (NAV), which is determined at the end of each trading

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session. NAV is calculated as the value of all the shares held by the fund, minus
expenses, divided by the number of units issued. Mutual Funds are usually long
term investment vehicle though there some categories of mutual funds, such as
money market mutual funds which are short term instruments.

What is an 'Equity'/Share?
Total equity capital of a company is divided into equal units of small
denominations, each called a share. For example, in a company the total equity
capital of Rs 300, 00,000 is divided into 20, 00,000 units of Rs 10 each. Each
such unit of Rs 10 is called a Share. Thus, the company then is said to have 20,
00,000 equity shares of Rs 10 each. The holders of such shares are members of
the company and have voting rights.

What is a 'Debt Instrument'?

Debt instrument represents a contract whereby one party lends money to

another on pre-determined terms with regards to rate and periodicity of interest,
repayment of principal amount by the borrower to the lender. In the Indian
securities markets, the term y bond' is used for debt instruments issued by the
Central and State governments and public sector organizations and the term
debenture' is used for instruments issued by private corporate sector.

What is a Derivative?

Derivative is a product whose value is derived from the value of one or more
basic variables, called underlying. The underlying asset can be equity, index,
foreign exchange (forex), commodity or any other asset. Derivative products
initially emerged as hedging devices against fluctuations in commodity prices
and commodity-linked derivatives remained the sole form of such products for
almost three hundred years. The financial derivatives came into spotlight in
post-1970 period due to growing instability in the financial markets. However,
since their emergence, these products have become very popular and by 1990s,
they accounted for about two-thirds of total transactions in derivative products.

What is an Index?An Index shows how specified portfolios of share prices

are moving in order to give an indication of market trends. It is a basket of

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securities and the average price movement of the basket of securities indicates
the index movement, whether upwards or downwards.

Introduction to Research Companies

IIFL:
IIFL securities limited segments include fund based activity, financial product
distribution, capital market activity and others. The Company is an online and
offline broking, and advisory services provider to retail and institutional clients
in the cash and derivative segments. The Company and its subsidiaries are
engaged in financing, wealth management and agency businesses.

Reliance Nippon Life Asset Management Ltd:

Reliance Nippon Life Asset Management's principal activity is to act as an

investment manager to Reliance Mutual Fund (the Fund) and to provide
Portfolio Management Services (PMS) and advisory services to clients under
Securities and Exchange Board of India (SEBI) Regulations.

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Chapter 4

Bibliography

www.moneycontrol.com
www.investing.com
www.ibef.com

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