ANAND RATHI, MYSURU

CHAPTER 1:

INTRODUCTION, INDUSTRY PROFILE AND COMPANY

PROFILE

1.1 INTRODUCTION TO INDUSTRY

Overview of Financial Services in India

The financial sector constitutes insurance companies, commercial banks, non-

banking financial companies, pension funds, co-operatives, mutual funds, and certain
other smaller financial entities. Almost 60 percent of asset is retained by the banking
sector proving its control in the Indian financial sector. The service sector plays a
vital act in the Gross Domestic Product (GDP) of India. A report by the Indian Brand
Equity Foundation (IBEF) mentions that an average Indian saving rate is 30.2%(as
on 31st March 2018) which one either keep as cash with him, saves in bank accounts.
The total increased amount of initial public offer to Rs 84,357 crore by the end of
FY2018.In high net worth individuals (HNWIs) India is among the top five
countries.
BSE & NSE got permission from SEBI to launch commodity derivatives trading
from 31st October 2018.
Another essential fundamental of India’s financial industry is the insurance industry.
The insurance industry has been spreading at a fast measure. The sum of first years
premium of life insurance companies demonstrate Rs 214,673 crore (US$ 30.72
billion) during FY19.
The Government of India began India Post Payments Bank (IPPB), to serve every
district with one branch which will push rural penetration. As of August 2018, two
branches out of 650 branches are early operational. Over the past few years, India
has supported a huge increase in Mergers and Acquisition (M&A) activity. In
H12018, 74 manage of acquisition took place in the financial sector. The sum value
of such transactions was US$ 4.166 billion.

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SEGMENTATION OF FINANCIAL SERVICES:

1.2 INTRODUCTION ABOUT COMPANY

Anand Rathi is one of the leading full-service investment bank established in 1994
covering the entire spectrum of investors and offering services such as Wealth
Management, Corporate Finance, Advisory, Brokerage & Distribution in a huge
sector of Equities, Commodities, Mutual funds, Structured products, Insurance,
Corporate deposits, Bonds & Loans to Institutions, Corporations, High-net-worth
individuals and Families. The founder of the firm was Mr.Anand Rathi.
The firm has promptly spread its footprints to over 1200 locations across India with
international existence in Dubai, Hong Kong, and London through its branches, sub-
brokers and remises and representative offices/associate companies. At present, the
group has more than 2500 professionals throughout India and its international
offices.

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COMPANY PROFILE

Name of the Company Anand Rathi

Specialties Internet brokering and Retail Marketing

Website http://www.rathionline.com/

Headquarters Mumbai

Company Size 1001-5000 Employees

Industry Financial Services

PROMOTERS:
Mr. Anand Rathi
Mr. Pradeep Gupta
Mr. Amit Rathi
Ms. Priti Gupta
Ms. Supriya Rathi
VISSION AND MISSION:
VISSION
(Founder & Chairman)
(Co-founder & Vice Chairman)
(Managing Director)
(Managing Director, Anand Rathi
Share and Stock Brokers Ltd)
(Director, Anand Rathi Insurance
Brokers Pvt Ltd)

GOALS

The firm’s goal is to be a leader in investment advisory, provide innovative financial

solutions & be the first choice for clients and Employees, to be a leader in the investment
advisory & be the first choice for all Clients & Employees by providing innovative
financial solutions.

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VALUES:

 CREATE: Firm believes in creating enough opportunities for clients to invest

in. Our experience & your association help us in identifying them.
 PRESERVE: Our team constantly strives to preserve our client’s wealth by

Offering solutions in sense varied assets or investments, just as

their financial goal directs

 GROW: Firm ensures that the investments of our clients grow in line with the

returns.

PRODUCTS / SERVICES PROFILE:

PRODUCTS SERVICES
Equities/Bonds/Mutual Funds/Derivatives. Creation of a customized financial strategy.
Managed Investment Services/PMS. Diversification of assets positioned on a
formal process of asset allocation.
Commodities. Active tracking, monitoring, and review of
portfolios.
FX Trading. Creation of private trusts.
Life insurance Tax planning.
General insurance Estate planning.
Alternative assets Structuring of family wealth.
 Private equity funds.
 Structured products.
 Real estate opportunities fund.
Special situation opportunities.
Offshore structure & global investments.

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SWOT ANALYSIS:

STRENGTHS:
Leading brokerage house
Online and offline trading facilities

WEAKNESS:
Don’t have unique products
Deals with the same products of all brokering firm

OPPORTUNITIES:
Firm can open new branches
Client satisfaction
Financial sector is booming

THREATS:
Price issues between the players
Attracts many brokers to deal with the same products

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LITERATURE REVIEW:

.Adebisi and Lawal (2015) has investigated the factors poignant firm's equity share
worth. They knew that the DPS, EPS, value per share, dividend payout, worth earnings
quantitative relation and size of the firm have a key impact on the firm's equity share
worth.

.Lashgarei and Ahmadi (2014) have analyzed the impact of dividend policy on share
worth volatility in the Tehran stock market. They found that on a five-hitter significance
error level dividend payout quantitative relation incorporates a considerably negative
impact on stock worth volatility plus rate incorporates a considerably positive impact. an
alternative variable like leverage, earnings volatility, and company size has no vital
impact on stock worth volatility.

.Mehr-un-Anisa and Nishat (2012) have investigated the impact of economic elementary
and economic science issues on the stock worth and located that previous year’s stock
worth, company size, and former years EPS have a vital impact on current year’s stock
worth. They are additionally unconcealed that economic science factors like real gross
domestic product growth, ROI and monetary development have a robust impact on the
stock worth. Any they unconcealed that there's no vital impact of the market to value,
share turnover quantitative relation and rate on stock worth.

.Hashemijoo, Aredekarei and Younasi (2012) have analyzed the impact of dividend
policy on the share worth volatility. The impact of 2 main measures of dividend policy
i.e. dividend yield and dividend payout on stock worth volatility are examined by
applying multiple correlations and located vital negative relationships. They additionally
determined the many negative impact of firm size on stock worth volatility. Any it's been
determined that dividend yield and size are the foremost vital indicators of stock worth
volatility.

.Das and Pattnayak (2013) has investigated the impact of elementary factors (ROI,
Earnings power issue, stock valuation issue, Risk issue, volatility issue, Growth factor)

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on the Indian stock market by applying multivariate analysis and located that there's a
favorable impact of ROI, Earnings power, protein, Stock valuation issue on share worth
of Sensex and Nifty whereas Risk and Volatility had negative impact on share worth of
Sensex and Nifty.

.Zafare, Chaubey and Khalid (2012) have examined the impact of dividend policy on
shareholder's wealth and market value of shares and located that out of the many issues
poignant the market value of share dividends is just one factor. They additionally
determined that numerous factors poignant dividend policy affects the shareholder's
wealth in numerous manners.

.Malhotra & Tondon (2013) has examined the factors poignant stock worth on NSE a
hundred firms. They use the regression model and located that there's a big positive
relationship of the firm's value, EPS and worth Earnings quantitative relation with the
firm's stock worth, whereas there's a vital inverse relationship of dividend yield with a
market value of firm's stock.

.Alumni (2014) have examined the determinants of Equity Share worth. They used
regression and correlation analysis and located that out of six factors poignant the share
worth, four factors that are EPS, the value per share, worth Earnings quantitative relation
and Size have vital impact on share worth whereas alternative 2 factors that are DPS,
Dividend Payout haven't any vital impact on the share worth.

.Srinivasan (2012) evaluated the factor affecting the equity share price in India. He
observed that DPS has a significant negative impact on share price whereas book value
per share would have a positive impact on the share price. Further, he showed that EPS,
Price Earnings ratio and size are the strong variables of share prices.

.Challa and Chalam (2015) had investigated the impact of book value, DPS, EPS, Size of
the firm, Dividend Payout Ratio, dividend yield, return on net worth, Price Earnings ratio
on the equity price of listed Companies in BSE. By employing multiple regressions
analysis they found the book value and return on net worth will have a significant
positive relationship with the market share price.

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.Hassan, Asaduzzaman and Kareim (2013) identify the effect of dividend policy on the
market price of the share in Bangladesh. They used secondary data and applied
descriptive statistics, correlation, and multiple regression models. Dividend per share and
retained earnings per share have been used as an independent variable and market price
per share has been used as a dependent variable. They found that DPS and Retained
earnings per share have a significant and positive impact on the market price per share.
Further, they stated that those industries which pay higher dividend have higher market
price per share as compared to those who pay a lower dividend.

.Islam, Khan, Choudhury, and Adnan (2014) have investigated that, the EPS affects
share price and the firm's value. They revealed that as EPS increases the share price
increases at a certain movement slightly not much. EPS is only one of the factor that
affects share price, there are also other factors affecting share prices such as
macroeconomic factor, microeconomic factor on the company, director's role and
company's factor and other factors. The researcher has advised that investors should keep
in mind the above-said factors along with EPS while investing in the capital market.

.Gareba (2014) has examined the impact of dividend –per -share on common stock
returns of the Manufacturing firms listed on the Nigerian Stock Exchange. Multiple
regressions and Pearson Moment Correlation was applied to obtain the relationship
between the dependent and independent variable. He established that the Pearson
Correlation Coefficient was highly significant and the result of regression analysis
declares that dividend-per-share has a significant impact on the common stock returns of
the sampled firms.

.Bhatt and Sumangala (2012) have investigated the impact of EPS on the market value of
equity share. Through applying the correlation coefficient they found the positive
relationship between EPS and market value of equity share. They also said that EPS is
only the factor that affects the market value of equity shares, there are other factors also
which affect the market value of equity shares such as company-related factors, and
industry-related factors, economic factors.

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.Menike & Prabath (2014) investigated that there is a significant and positive impact of
accounting variables – earnings per share, dividend per share and book value per share on
the stock price of Colombo stock exchange. For analysis single and multiple regression
analyses were used to estimate the relationship between different variables. The study
compared the results of the developed market and developing market where EPS shows a
low impact on the share price in the Colombo Stock Exchange whereas DPS and BVPS
show a significant impact.

.Ebrahimi and Chadegani (2011), studied the relationship between Earnings, Dividend,
Stock Price and Stock Return. They implemented the cross-section, pooled data and panel
data regression models for testing. They investigated the effect of earnings, dividend and
stock price on stock return. In earlier years the effect of the dividend was significant but
in later years there was nothing like a significant relationship between dividend and stock
return. The results showed that only earnings have an effect on stock return and there is a
significant relationship between EPS to stock price ratio and stock return.

.Geetha and Swaaminathan (2015), studied four automobile and IT industries (listed in
BSE and NSE) for five years as a sample and examine the influence of book value,
earnings per share (EPS) and price-earnings ratio with regards to the market price of the
share. The paper is an attempt to analyze the influencing factors which affect the
movement of stock price either upward or downtrend. The research states that EPS has a
significant effect on market price. But the dividend per share does not have a positive or
negative effect regards to the market price.

.Shubiri (2010) studied 14 commercial banks of the Amman Stock Exchange. For
analysis simple and multiple regressions analysis is used to find out the relationship of
microeconomic factors with the stock price. The study revealed that there is a high
positive significant relationship between the market price of the stock and net asset value
per share, market price of stock dividend percentage, gross domestic product, and
negative significant relationship through inflation and lending interest rate.

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.Fama and Gibbon (1982) estimated the expected real returns on bills and expected
inflation rates which are inversely related due to the positive correlation between the
expected real returns on financial assets and real activity.
.Dividend Variability and Various Bounds Tests for the Rationality of Stock Market
Prices -- Seminar at Yale and Harvard (1983) Terry A. Marsh And Robert C. Merton
perhaps as long as there has been a stock market. Economists were debated for stock
prices rationally that reflect the intrinsic or fundamental values of the underlying
companies.

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REFERENCES:
Adebisi, O. S., & Lawal, K. O. (2015). Equity share price determinants: a survey of
literature. Arabian Journal of Business and Management Review (Oman Chapter), 5(3),
38

Tandon, K., & Malhotra, N. (2013).International Journal of Research in Management &

Technology (IJRMT), ISSN, 2249-9563. Determinants of Stock Prices: Empirical
Evidence from NSE 100 Companies.

Pushpa Bhatt, P., & Sumangala, Journal of Finance, Accounting & Management, 3(2). J.
K. (2012) Impact of Earnings per share on Market Value of an equity share: An
Empirical Study in Indian Capital Market Lashgari, Z., & Ahmadi, M. (2014). The
impact of dividend policy on stock price volatility in the Tehran stock exchange. Kuwait
Chapter of the Arabian Journal of Business and Management Review, 3(10), 273.

Hashemijoo, M., Mahdavi Ardekani, A. Journal of business studies quarterly, 4(1).

Younasi, N. (2012). The impact of dividend policy on share price volatility in the
Malaysian stock market.

Das, N., & Pattnayak, J. K. (2013). IUP Journal of Applied Finance, 19(2), 84. The
Effect of Fundamental Factors on Indian Stock Market: A Case Study of Sensex and
Nifty [dagger].

Zafar, S. T., Chaubey, D. S., & Khalid, S. M. (2012). A Study on Dividend Policy and its
Impact on the Shareholders Wealth in Selected Banking Companies in India.
International Journal of Financial Management, 2(3), 79.

Tandon, K., & Malhotra, N. (2013). International Journal of Research in Management &
Technology (IJRMT), ISSN, 2249-9563 Determinants of Stock Prices: Empirical
Evidence from NSE 100 Companies.

Alumni, M. A. (2014). Determinants of equity share prices of the listed banks in Amman
stock exchange: Quantitative approach. International Journal of Business and Social
Science, 5(1).

Srinivasan, P. (2012). Determinants of equity share prices in India: A panel data

approach. The Romanian Economic Journal, 46(6), 205-228.

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Challa, K. & Chalam, G.V. (2015). Equity Share Price Determinants: An empirical
analysis, Indian Journal of Applied Research, 5(1), 79-83.

Al-Hassan, M. A., Asaduzzaman, M., & al Karim, R. (2013). The Effect of Dividend
Policy on Share Price: An Evaluative Study. IOSR Journal of Economics and Finance,
1(4), 6-11.

Rashidul Islam, Rahman Khan, Toufic Choudhury, Mahmood Adnan (2014) How
Earning Per Share (EPS) Affects on Share Price and Firm value, European Journal of
Business and Management, 6(17), 97-108.

Garba, A. (2014). European Journal of Business and Management. Impact Of EPS And
DPS On Stock Price: A Study Of Selected Public Sector Banks Of India 121 Impact of
Dividend-Per-Share on Common Stock Returns: A Case Study of Some Selected
Manufacturing Firms Listed on the Nigeria Stock Exchange.

Sumangala, J. K. (2012). Journal of finance, accounting, and management, 3(2), 1.

Impact of Earnings per share on Market Value of an equity share: An Empirical Study in
Indian Capital Market.

Menike, M. G. P. D., & Prabath, U. S. (2014).International Journal of Business and

Management, 9(5), 125. The Impact of Accounting Variables on Stock Price: Evidence
from the Colombo Stock Exchange, Sri Lanka.

Ebrahimi, M., & Aghaei Chadegani, A. (2011, March).In International Conference on

Humanities, Society and Culture, IPEDR (Vol. 20). The relationship between earning,
dividend, stock price, and stock return: evidence from Iranian companies

Geetha, E., & Swaaminathan, M. (2015), A study on the factors influencing stock price,
A Comparative study of Automobile and Information Technology Industries stocks in
India, International Journal of Current Research and Academic Review, 3(3), 97-109.

Al-Shubiri, F. N. (2010). International Journal of Business and Management, 5(10),

137.Analysis of the determinants of market stock price movements: An empirical study
of Jordanian commercial banks.

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