“INTERNSHIP PROJECT REPORT”

on

‘A Research Of Equity on the Different Companies or Industries to

find the best stocksfor recommendations of buy, sell or hold’

with

FUNDSROOM

UNDER THE GUIDANCE OF “ MR. ROHIT kumar”, ASSISTANT PROFFESSOR.

Submitted By:
Diksha SHARMA

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 TABLE OF CONTENT

1. Letter Of Transmittal ……………………………………………………………………………………………………..03

2. Certificate by the Project Co-ordinator…………………………………………………………………………...04

3. Student’s Declaration……………………………………………………………………………………………………….05

4. Certificate By the Firm……………………………………………………………………………………………………..06-07

5. Executive Summary…………………………………………………………………………………………………………08-09

6. Objective of the Research…………………………………………………………………………………………….10-11

7. Research Methodology……………………………………………………………………………………………..12-15

8. CHAPTER 1 About the company ……………………………………………………………………………..16

9. CHAPTER 2 Introduction……………………………………………………………………………………………25

10. CHAPTER 3 Data Analysis……………………………………………………………………………………….30

11. CONCLUSION………………………………………………………………………………………………………….58

12. REFERENCES…………………………………………………………………………………………………………….60

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 LETTER OF TRANSMITT

Date of transmit:- 05-11-2022

To
The Co-Ordinator
University of Management

LETTER OF TRANSMITTAL

To
Feihan Ahsan
Lecturer
Brac University
Through Amalendu Roy
Branch Manager
United Commercial Bank
Limited

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Subject: Submission of
Internship Repo
Date: 05-11-2022

To
Rumit Kaur
Assistant Professor,
Sunstone Eduversity
Rayat Bahra University
V.P.O. Sahauran, Tehsil Kharar Distt, Kharar, Punjab 140103
Subject: Submission of Internship Project Report

Dear Ma’am,

It is an immense pleasure for me to submit our internship report titled “Doing equity

research on different companies of various industries to find out which is best

approachable and recommended to buy, sell or hold the equities”.

I have tried my level best to fulfill all my requirements for this internship and tried to follow

my supervisor’s instructions while preparing this report.

This gave me the opportunity to theoretical knowledge in the practical field, which helps me

in my future career.

It would be a profound pleasure for me if the report can serve its purpose. I would be

available at any time to explain to you any queries if feel necessary.

Thanking You

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Yours’ sincerely

Diksha Sharma

CERTIFICATE

This is to certify that the project report titled “A Research on the Different

5|Page
Companies or Industries to find the best stocks for recommendations of buy,

sell or hold” is an original work carried out by Harpreet Kaur, under

myguidance and supervision, in partial fulfillment for the award of the degree

of Master ofBusiness Administration by Rayat Bahra University, Mohali, during

academic year 2021-2023.

_____________________________

Mrs. Rumit Kaur

Assistant Professor

(Professor Co-Ordinatorfor the Report)

STUDENT’s DECLARATION

The internship opportunity I had with FUNDSROOM was agreat chance for learning and

professional development. Therefore, I consider myselfas a very lucky individual as I was

provided with an opportunity to be a part of it.

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I am also grateful for having a chance to meet so many wonderful people and

professionals who led me though this internship period.

I am using this opportunity to express my deepest gratitude and special thanks to Mr.Adwait

bhalerao and Mr. Masroor Khan who in spite of beingextraordinarily busy with their duties,

took time out to hear, guide and keep me on thecorrect path and allowing me to carry out

my internship at their esteemedorganization.

I express my deepest thanks to the HR for taking part in useful decision& giving

necessary advices and guidance and arranged all facilities to makelife easier. I choose this

moment to acknowledge his contribution gratefully.

It is my radiant sentiment to place on record my best regards, deepest sense ofgratitude

toPuja Sharma, Rayat Bahra University powered by Sunstone for her careful andprecious

guidance which were extremely valuable for my study both theoreticallyandpractically.

I further want to thanks Mrs. Harpreet Aulakh Sunstone, who helped me to

betterunderstand concepts of professionalism and become a better person and employee

inmy life.

I sincerely want to thank Mrs. Rumit Kaur for being our programmeecoordinatorand helping

me at every stage of my internship and studies.

I would also like to thank my parents and friends who helped me a lot during my lifeand

thisinternship period.

I perceive this opportunity as a big milestone in my careerDevelopment.

Iwill strive to use gained skills and knowledge in the best possible way, and I willcontinue

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towork on their improvement, in order to attain desired career objectives.

Hope tocontinuecooperation with all of you in the future.

Sincerely,

Harpreet Kaur

INTERNSHIP CERTIFICATE

connect@fundsroom.com

Internship Certificate
Date: 01-November-2022

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 To Whomsoever It May Concern

We are pleased to confirm Ms. Diksha Sharma as successfully undertaken her role as Business Analyst
Intern and completed his internship for a period of 63 days from 25-

August-2022 to 27-October-2022.

During her time at Fundsroom, she showcased some key traits which emphasized managerial and
technical skills related to her domain which included Business analyst

knowledge related to business sector, dataanalysing, research and report making of the
product/service which overall impacted in a positive manner which led to the growth of the
organization.

We would like to wish her best of luck for her future professional journey ahead and we believe her
dedication, knowledge, and zest to work would surely help the future workplace.

Thanking you!

Yours Sincerely

Fundsroom Investment Services.

Masroor Khan

[C.E.O]

Fundsroom is a trading name of

FundsroomInvestment Services
registered in Pune, Maharashtra,
India, 411048
Reg. No: 4810005240594

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 EXECUTIVE SUMMARY
The main purpose of this project is to study stocks in the different companies of various

industries and identify investment opportunities in these sectors that can maximize returns.

As the Indian economy is one of the fastest developing economies in the world, Indian

companies are growing rapidly compared to his decade-old growth rate. Many Indian

companies are expanding their operations around the world through mergers and

acquisitions. As companies grow, shareholders benefit from superior dividends and capital

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appreciation by investing in shares of those companies.

The number of companies listed on the stock exchanges (BSE & NSE) is increasing every year

as new IPOs hit the market.

In India, people are aware that stocks may generate the best returns compared to other

investment options, but people are unaware of how stocks are valued, and are not

recommended by brokers, friends or I invest in stocks based on tips from my family.

Investing in stocks based on tips isn't a true money investment, but it's clear that many

people don't want to do it without some hard-earned cash. Stock valuation starts with

analyzing the sector you want to invest in. If the sector looks positive, analyze different

companies in this sector. Companies are fundamentally analyzed to check their

performance and financial strength.

Technical analysis is used to determine the right price to buy stocks so that you can achieve

a higher return on your investment. This report describes different aspects of equities and

highlights the different opportunities and risks that have arisen as a result of the changing

regulatory environment.

The purpose of this project is to determine the risks of changes in the regulatory

environment. The purpose of this project is to determine the risk and return outlook for

stocks in various sectors.I have different selection techniques for choosing the company's

products. We used key selection analysis with technical and fundamental analysis for HDFC,

L&T Finance, ITC Infotech, MCL, TATA Motors, Samsung, Amazon, Hindustan Uniliver.

This is especially useful for identifying areas of development. I conducted a detailed study

of various real economy snapshots to examine growth opportunities across the economy.

We also conducted a financial strength analysis of the company to find out how financially

efficient it is. In this section, we explored HDFC, L&T Finance, ITC Infotech, MCL, TATA

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Motors, Samsung, Amazon and Hindustan Uniliver.

Also, for these three companies, he did his SWOT analysis of each company's strengths,

weaknesses, opportunities and threats. A SWOT analysis also provides investors with an

overview of future certainty and uncertainty. Finally, I analyzed these stocks to predict

future stock prices and support and resistance levels. This allows investors to determine

when and where they can invest for higher returns.

OBJECTIVES OF THE STUDY

 Track company stock prices.
 Study stock price movements.
 Analyze the balance sheet and income statement to know where the
Purpose of the study Of course, I made this report according to your requirements.
company is.
 We conduct fundamental analysis of comparable companies to
understand their financial situation.
 Carry out technical analysis. Conducting a SWOT analysis

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This report helps investors to learn about the Indian economy and the current growth

prospects of its various sectors.

Learn about the different factors that affect different sectors and their impact on the

growth of these different sectors.

This report will help you compare the above-mentioned companies and their expected

future stock prices so that you can invest in better options. This report also features

FUNDSROOM INVESTMENT SERVICES in their investment decisions.

METHODOLOGY

Research generally means the quest for knowledge. Research can also be defined as the

scientific and systematic search for relevant information on a particular topic. Some people

see research as moving, moving from the known to the unknown. It's a journey of discovery.

We all have an instinct to be interested in things. When faced with the unknown, we

wonder, and our curiosity leads us to explore and fully understand the unknown. This

curiosity is the mother of all knowledge, and the method a person uses to obtain this

unknown knowledge can be called research.

Since research is an academic activity, the term should be used in its technical sense.

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Research is a unique contribution to and further development of an existing body of

knowledge. It is the pursuit of truth through research, observation, comparison and

experimentation. In short, research is the search for knowledge in an objective and

systematic way to solve problems.

SIGNIFICANCE OF RESEARCH

It is very important to understand the importance of research in order to conduct research

better and evaluate research results.

So I thought I would emphasize the importance of research. Doubt is better than arrogance.

Because it leads to exploration, and exploration leads to invention," Hudson's famous

maxim illustrates the importance of research.

More research makes progress possible. Research encourages scientific and inductive

reasoning and promotes the development of reasoning and organizational habits. Business

and government use research to solve operational problems.

I'm pointing Research is gaining importance as a tool for policymaking by both governments

and businesses.

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 RESEARCH METHODOLOGY

The objective of this research project was to provide FUNDSROOM INVESTMENT SERVICES

with analysis of different sectors with a detailed feasibility report in respect to order growth

and trend nationally and internationally.The section on parameters that affect the different

sector required secondary data collection and then use of valuation ratio for the estimating

the revenue which they can generate in future like steel prices to sales ratio along within

dependent variables like inflation, interest rates etc.

One of the sections is to establish ratio analysis and order book analysis, forwhich data

relating to the companies traded at Sensex, NSE etc was collected and spot and risk factor

has been associated. Price of raw material and salestrend were also established. Beta factor

of each company was studied.

Seasonal variation in order book for each company was calculated from thesecondary data

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collected and analysis has been done as to how much are theseasonality in each of these

stocks last section of my research was to dovaluation ratio as a common factor indicating

the future prospectus of thecompanies. In this research study, mainly two types of data

collectiontechniques were used i.e., with the help of research analyst and secondly withthe

help of research report given by project guide at the company. In both themethods, the

analysis has been done for the sector. I was careful not to express my opinion.

CHAPTER 1

ABOUT THE COMPANY

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 “FUNDSROOM”

FUNDSROOM INVESTMENT SERVICES

ABOUT THE COMPANY

Fundsroom is a Fintech platform that provides one single platform for all major investment asset

classes ranging from Stocks, Mutual funds, Digital Gold, Insurance, Real estate, and Banks.

Essentially, we bridge the gap between the customers and service providers through our platform.

Fundsroom is a registered startup under AMFI, BSE, and Start-up India and is one of the fastest

emerging Fintech start-ups within the region and country.

They understand the world of Investing. They firmly believe that investments need to be planned

systematically to achieve certain goals. And that’s what we try to do – we assign goal to each

investment and draw a plan to achieve that goal in a systematic way. It is not the investment

product but a goal that is invested in.

Their robust technology platform backed by latest of technological tools and application of data

analytics at various stages of investment like defining the goal, risk profiling, fund recommendation

and portfolio re-balancing makes the entire process seamless, effective & result oriented.

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1. Customer Profiling - Robo Driven Analytics

Customer profiling based on demographic factors sets the stage for Robo driven analytics. Based on

the risk profile category of the investor clubbed with investment horizon, right funds are identified

form the universe of more than 8000 funds.

2. 8000+ Schemes – Funds Universe

Identifying the right set of funds that meets the investment objective is the most critical part for the

entire ecosystem. It’s the fund that meets your objective & hence multiple variables in the scheme

are looked for before finalizing the scheme.

3. Goal Dashboard -Robo Driven Analytics

Tracking the performance of your goal till it is achieved is as important as conceptualizing that goal.

Our goal-based investor dashboard with real-time updates lets you track your every single goal till it

is achieved & also allows to do alteration to the goal.

4.Demographic Analysis - Customized Portfolio

We believe each individual is different & deserves unique fund selection to meet the desired

objective. Hence our system looks at every individual as a unique case &suggest the solution as per

his/her objective.

5. Demographic Variable – Risk Profile

Before you start your investment journey, it is important to identify your risk appetite to suggest you

the right set of funds. Based on your demographic variable, Robo driven system classify each

investor into different risk category before suggesting the solution.

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6.BSE Payment Interface – Best Digital Tools

System uses the latest of the technological tools to give the best in-class user interface. So be it our

tie-up with Bombay Stock Exchange (BSE) for payment transfer or Secure Sockets Layer protocol to

offer bank grade security, we offer best & latest of the tools.

Funds Room is growing automated platform for mutual fund investing. It enables investor to choose

best funds from across the fund universe.

It chooses best of the funds from Top Equity Fund, Top Debt Fund, Top Tax Saving Fund, Top

Balanced Fund, Top Debt Fund & Top Liquid Funds. It allows investor to invest in completely

paperless manner in both Lumpsum & Funds Room investment.

Funds Room provides highest of the security so that investor can focus on his investments.

Funds Room offers many benefits some of which are :

 Completely digital platform

 Customized portfolio for every investor.

 No Demat account

 No Fees. No Charges.

Start with Minimum Investment of ₹ 500/-

SERVICES PROVIDED BY FUNDSROOM

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1. MUTUAL FUNDS

 Investing in diversified Holdings.

 Let the experts manage.

 Let’s grow your Funds.

2.STOCKS

 Higher Liquidity.

 Versatility.

 Higher returns in shorter periods of time.

3.REAL ESTATE

 Traditional Investment sector.

 Cash Flow

 Tax Breaks & Deductions

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4. BANKS

 Money locker when it’s safe and sound

 Get Guaranteed returns

 Safe and secure

5. DIGITAL GOLDS

 E-golds, Gold ETFs, Bullions ETCs.

 Gold is deemed as a safe heaven.

 Gold is the best investment to do.

WHY FUNDSROOM?

Select from 5000+ mutual funds and get higher return with 0% commission.

1. Allocating your money with the expectation of getting some benefit down the line.

2.There are various sectors wherein you can put your money into and can get returns on it

in the future.

3. Investment sectors offered: Choose from low risk to high returns sectors and build

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yourself a diversified portfolio.

4. The benefit or profit generated via an investment is called a return which can be

measured in ROI%.

INVESTMENT SIMPLIFIED

WHY FUNDSROOM ?

We help you in balancing your financial risks & growth with no hidden charges or tricks. We

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provide you plenty of investment sectors.

ROI 80%

RISK 30%

SATISFACTION 95%

CHAPTER 2

INTRODUCTION

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 INTRODUCTION
Equity is typically referred to as shareholder equity (also known as Shareholders' equity), or owners'

equity (for privately held companies), whichrepresents the amount of money that would be

returned to a company'sshareholders if all of the assets were liquidated and all of the company's

debtwas paid off.Equity is found on a company's balance sheet and is one of the most

commonfinancial metrics employed by analysts to assess the financial health of acompany.

Shareholder equity can also represent the book value of a company. Equity can sometimes be

offered as payment-in-kind. Equity research refers to the analysis of a company's fundamentals,

financial statement analysis, financial modelling, and scenario building for

equityrecommendations.Equity research divisions work both for the sell side and the buy side of

abrokerage firm. ER analysts monitor the market and analyze the market trendsand their effects on

companies and stocks.Despite its name, the ER deals with commodities and bonds, offeringmacro-

economic views and derivatives analysis when required by working jointly with the derivatives

division of the brokerage firm. The main goal of Eris to provide insight and in-depth analysis of a

sector, company or stock and usethis information to assist investors in allocating their funds

properly.

TYPES OF EQUITY
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Before talking about the equity’s forms , let us quickly know about the Business Equity ,

Business equity is known as the owner of the company. Equity is the capital amount that we

invest in our business or the value of your company.

If you want to calculate the business equity of your business , then it can be determined by

the relationship of the equity , asset and liabilities .

Relationship between the equity , assets and liabilities are :-

Equity = Assets – Liabilities

Equity can be further classified by the business structure.

Two types of equity includes stockholder’s&owner’s equity.

Stockholder’s Equity

It is known as shareholder’s equity.

It is the amount of profit given to the stake-holders after deducting all the debts i.e.,

Assets -liabilities = Profits .

Stocks are common in companies structured as legal entities.

To see the amount available for distribution to shareholders, look at your stock.

Owner’s Equity

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Equity refers to the amount of ownership you have in a company. Equity can be calculated

by subtracting liabilities from assets. Equity shows how much available capital a small

business has. Stocks are most common for a sole proprietor or his partner in business.

Types of Equity Accounts

Now that we have a chance to brush up on the types of business capital, let's get down to

business. There are different types of accounts used to record capital.

The type of stock account depends on the nature of your business.

Use these accounts to report capital on your business's balance sheet. Various accounts are

displayed in the equity section of the balance sheet.

Also, the liabilities and equity must match the assets on the balance sheet. Check out the

most common types of stock accounts below :-

COMMON STOCKS

It typically records common stock at the par value of the stock. Par value simply

means the par value of the stock. Common stock can be calculated by multiplying the par

value of the stock by the total number of shares outstanding. Common stock

investors typically have more control over the company's direction. Ordinary

shareholders also have many responsibilities in the company, such as: A stock account that

represents an initial investment in a company. 

This type of stock gives shareholders rights to certain company assets.

1. Officer’s Appointment

2. Board Election

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3. Basic Corporate governing

4. Determining polices

PREFERRED STOCKS

Preferred stock is the same as common stock.

However, preferred shareholders have fewer responsibilities and no voting rights

(e.g.election of directors).

Preferred shareholders have more opportunities to claim the company's assets and profits.

Investors can also receive cash in the form of dividends.

ADDITIONAL PAID-ON CAPITAL

The equity account, which contains additional paid-in capital, accumulates additional

amounts that investors pay for shares above par.

This type of capital account is also called brought-in surplus.

The balance of the additional deposit account can be much higher than other accounts.

Also, the amounts may change as the company experiences gains and losses from the sale of

shares.

TRESURY STOCKS

Some companies may choose to buy back shares from common shareholders. This is where

treasury stock comes into play.

Treasury shares account for amounts paid by investors to buy back shares. And this type of

stock account usually has a negative balance.

In most cases, we reflect this in our books as a deduction from total capital.

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RETAINED EARNINGS

Retained earnings are basically the portion of net income that is not paid out as dividends.

You can invest using your internal reserves.

You can also choose to keep your retained earnings for the future.

EQUITY RESEARCH PROCESS

Equity research process comprises of the following steps :-

 Economic Analysis

 Understanding industry or sector analysis

 Company analysis for investment purpose

 Financial Statement Analysis of the company

 Performing financial and valuation

 Writing report showing the result of analysis

 Presentation or recommendations

APPLICATION

Equity analysis is required for companies engaged in investment activities.

Examples include insurance companies, pension funds, and wealth management companies.

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All the companies mentioned above invest heavily in the stock market with the goal of

delivering high returns to their clients.

Therefore, it is very important to conduct a detailed analysis of the stock or sector before

investing the client's money.

They rely wholly or partially on the reports or suggestions of stock analysts to make

informed decisions.

As such, these companies either have dedicated equity research teams in-house or

outsource this work to independent research firms.

SKILLS REQUIRED FOR EQUITY RESEARCH

Following skills are required for the equity research :-

 Strong Analytical and reasoning skills

Employees must have strong analytical skills. Whether qualitative or quantitative,

the story behind a company's data needs to be revealed.

 Knowledge of financial statement and their analysis

Big banks run their own training programs and teach incoming batches everything

from scratch.

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 However, candidates who understand the basics of financial analysis will have an

advantage over others for job seekers and boutique businesses that lack training

resources.

Employees are encouraged to invest in a CFA program.

Recommended (most companies will usually refund the exam fee if approved on the

first attempt).

 Attention to details and diligence

A small mistake an associate/analyst makes in their analysis can result in huge losses

for investors who rely on their opinion.

It is therefore very important to pay close attention to detail thoroughly.

 Ability to develop industry expertise

To be successful in this field, Associates must aspire to become experts in their field.

This leads to becoming a top analyst and a force to be reckoned with among industry

players.

 Writing and presentation skills

Equity researchers must communicate well, at least in writing.

Because when he/she becomes an analyst, he/she must not only produce well-

written reports with reasonable forecasts, but also execute marketing events such as

organizing shows other than Deal Road for clients , networking skills will also be

important.

EQUITY RESEARCH BENEFITS

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 DIVIDEND

Investors are entitled to receive dividends from the company. It's one of his two

main sources of return on his investment.

CAPITAL GAIN

The source of investment income other than dividends is capital gains.

Profits arising from an increase in the market price of stocks.

LIMITED LIABILITY

A shareholder's or investor's liability is limited to the extent of the investment made.

If the company becomes in the red, the investor will not bear the loss that exceeds

the capital investment amount.

EXERCISE CONTROL

By investing in a company, shareholders become owners of the company and

thereby exercise control.

Officially, he receives voting rights in the company.

CLAIM OVER ASSETS AND INCOME

Income An investor in a stock owns the company and therefore owns the assets of

that company.

He enjoys a share of the company's earnings.

He will receive a portion of this income in cash in the form of dividends and the rest

of the capital will be reinvested in the company.

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 RIGHT SHARES

Whenever a company needs more capital for expansion etc., they tend to issue

"statutory shares".

Such issuance of shares preserves the ownership and control of existing

shareholders and gives investors investment preference over other public investors.

Rights shares are issued at a price below the current market price of the shares.

Existing investors can therefore take advantage of this or surrender rights on behalf

of someone else to preserve the value of their rights.

BONUS SHARES

A company may decide to issue bonus shares to its shareholders. This is also a kind

of dividend.

Bonus shares are bonus shares given to existing shareholders, often in lieu of

dividends.

STOCK SPLIT

A stock split is a split of shares. How should an investor benefit from this?

Splitting the stock will lower the price per share of him in the market, ultimately

increasing the readability of the stock.

Ultimately, stock splits lead to more trading volume from multiple investors, making

the stock more liquid.

OBJECTIVES

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 The objectives of the equity research studies are mentioned below :-

 To justify current investments in selected securities.

  Understand the movement and performance of stocks

 Recommend increasing or decreasing investments in specific securities

 Provide overviews of different industries in different sectors and analyse stocks in

these sectors

 Some major players different sectors with good investment prospects to study.

SCOPE OF STUDIES

The main purpose of stock research is to analyze market trends and how they affect a

company's earnings and share price.

Focus on an entire stock or sector to get all information about a stock (or company within a

sector).

This includes a review of past financial performance, projections of future financial

performance, supporting rationale for estimates, and finally recommendations to buy or sell

stocks.

Sell-side firms typically produce detailed reports like this.

LIMITATIONS

DIVIDEND

Dividends received by shareholders are neither fixed nor controllable by investors.

The company's management determines the amount of the dividend. There is no issue of

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 dividends in case of losses.

If a company makes a profit, investors will not receive a dividend unless the board of

directors proposes a dividend.

HIGH RISK

Investing in stocks is a risky investment compared to other investments such as debt.

Money is invested based on investor confidence in the company.

There are no warranties associated with it

FLUCTUATION IN MARKET PRICE

The market price of each stock is very different. It is always very difficult to make a profit

from the market. Conversely, the odds of losing are the same.

LIMITED CONTROL

A stock investor is a small investor in a company. Therefore, it is almost impossible to

influence the company's decisions regarding voting rights

RESIDUAL CLAIM

Shareholders have a residual interest in both assets and income. Income available to

shareholders is after payment of all other shareholders. Bondholders, etc.

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 CHAPTER 3

DATA ANALYSIS

BANKING INDUSTRY

INTRODUCTION TO INDIAN BANKING SECTOR

India is considered one of the world's leading economies and its banking sector has great

growth potential.

Over the past decade, there has been a significant increase in ATM, internet and mobile

banking transactions.

Affected by global financial turmoil and the aftermath of the subprime crisis, the global

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banking sector has seen some of the biggest and most famous names face billions of dollars

in write-downs and the brink of bankruptcy.

But India's banking sector is well protected by the central bank and has weathered most of

the crisis with relative ease. The sector is also looking forward to consolidation and

investments in her FDI front. Public sector banks have been very active in their restructuring

efforts, including technology adoption and loss-making asset reductions. Retail loans, which

have been a significant part of most banks' portfolios over the past two years, have lost

some weight in banks' portfolios due to the RBI-facilitated risk weighting.

Reserve Bank of India Governor Sakti anta Das expressed concern over non-performing

loans and said banks needed to strengthen their internal credit rating systems to minimize

the risk of default. His growing NPA is the biggest challenge for the banking sector as it

needs to resolve the growing bad debts.

The country's banking industry is facing major changes. With the passage of the Banking Act

(Amendment) Bill by the Indian Parliament in 2012, the situation in the sector changed

accordingly. The bill will allow the Reserve Bank of India (RBI) to set final guidelines for

issuing new licenses. This could increase the number of banks in the country.

With the integration of modern technology into the banking industry, operating styles are

also slowly evolving. RBI and Indian government want to expand financial services to rural

areas

STRUCTURE OF THE INDIAN BANKING SYSTEM

Evolving over decades, India's existing banking structure is sophisticated and serves the

credit and banking needs of the economy.

Bank structures today have multiple tiers to accommodate the specific and varied needs of

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different customers and borrowers.

Banking structures have played an important role in mobilizing savings and promoting

economic development.

The later stages of the financial sector reform (1991) significantly improved the efficiency

and strength of the banking structure.

The financial health of India's commercial banking system rivals most developed and

emerging markets.

Indian financial system includes many commercial and cooperative banks, industrial banks,

agricultural banks, foreign trade banks, housing development banks, social security

institutions, collective investment institutions, etc. The banking system is the heart of the

financial system. In Indian banking system, RBI is at the top. It is the central bank of a

country where commercial banks including public and private banks, foreign banks and local

banks are located. This includes local land banks and cooperative banks.

MARKET SIZE
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Market Size India's banking assets reached US$1.8 trillion in FY2013 and are expected to

reach US$28.5 trillion in FY25. Total deposits in 2013 were US$1,274.3 billion. Indian bank

revenue increased from US$11.8 billion to US$46.9 billion between 2001 and 2010. After-tax

profits also rose from $1.4 billion to $12 billion over the same period. Loans to the housing

sector grew at a CAGR of 11.1% in 2008-13. Banking sector total lending is expected to grow

at a CAGR of 18

It will reach US$2.4 trillion at 1% (Indian Rupee) by 2017. In 2014, personal financial

institutions experienced significant growth in their credit card and personal loan businesses.

According to a report by Emkay Global Financial Services, ICICI Bank's personal loan

disbursements for his fiscal year 2014 increased by 141.6%. The bank also saw a healthy

20.8% growth in credit card fees, according to the report. Axis Bank's personal loan business

also grew by 49.8%, while his credit card business grew by 31.1%.

INVESTMENT

HDFC Bank and state-owned United Bank of India plan to use the stock market to raise

funds to improve their capital base and lending. HDFC Bank plans to raise Rs 1 lakh (US$

1.66 billion) in funding and the board of Kolkata-based United Bank has announced that it

will raise approximately Rs 1.3 crore (US$ 216.47 million) from the sale of shares to increase

its capital base. million USD) funding.

The Export-Import Bank of India (Exim Bank) will focus on helping export projects from India

to South Asia, Africa and Latin America, said Yaduvendra Mathur, chairman and MD of Exim

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Bank. increase.

GOVERNMENT INITIATIVES

The RBI announced several measures in its bimonthly monetary policy on June 3, 2014. This

includes raising the limit for money transfers to US$125,000 from his previous US$75,000.

The State Bank of India (SBI) has announced his one-year Rural Scholarship Program 'His SBI

Youth in India (SBI YFI)' for 2014.

The program educates the country's youth to become agents of change in the country's

rural areas.

This program is aimed at young professionals who want to drive change for a better India.

RBI has simplified the rules for financing exporters.

Exporters can now obtain long-term advance loans of up to 10 years from banks to fulfill

their contracts.

Exporters must have a satisfactory 3-year track record in order to receive payment from

banks that can tailor payments to future exports.

The RBI allows foreign investors including Foreign Portfolio Investors (FPIs) and Non-

Resident Indians (NRIs) to invest up to 26% in insurance and related activities through the

automatic route.

FUTURE PROSPECT

The Indian banking sector could become the fifth largest banking sector in the world by

2020 and the third largest banking sector by 2025. Today, Indian Bank 39

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is focused on serving its customers and improving its technological infrastructure.

This helps improve the customer experience and gives you a competitive edge at the edge.

With internet and mobile banking reaching an all-time high in popularity, customer

relationship management (CRM) and data warehousing are expected to power the next

wave of banking technology in the country.

Strong growth in the Indian economy is expected to drive strong demand for banking

services, especially retail banking, mortgages and investment services.

FINANCIAL PERFORMANCES

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FINANCE SECTOR

A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act,

1956 engaged in the business of loans and advances, acquisition of

shares/stocks/bonds/debentures/securities issued by Government or local authority or

other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit

business but does not include any institution whose principal business is that of agriculture

activity, industrial activity, purchase or sale of any goods (other than securities) or providing

any services and sale/purchase/construction of immovable property.

A non-banking institution which is a company and has principal business of

receivingdeposits under any scheme or arrangement in one lump sum or in installment by

way of contributions or in any other manner, is also a non-banking financial company

(Residuary non-banking company)

.Difference Between Bank’s and NBFC’s NBFCs lend and make investments and hence their

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activities are akin to that ofbanks; however,

there are a few differences as given below -:

1.NBFC cannot accept demand deposits.

2.NBFCs do not form part of the payment and settlement system andcannot issue cheques

drawn on itself

3.deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not

available to depositors of NBFCs, unlike in case ofbanks.

Categories of NBFC’s registered with RBI NBFCs are categorized in terms of the type of

liabilities into Deposit and Non-Deposit acceptingNBFCs,non-deposit taking NBFCs by their

size into systemically important and other non-deposit holding companies (NBFC-NDSI and

NBFC-ND) and by the kind of activity, they conduct.

Within this broad categorization the different types of NBFCs are as follows :

1. Asset Finance Company (AFC) : An AFC is a company which is a financial institution

carrying on as its principal business the financing of physical assets supporting

productive/economic activity, such as automobiles, tractors, lathe machines, generator sets,

earth moving and material handling equipment’s, moving on own power and general

purpose.

2. Investment Company (IIC) :companies that are financial institutions whose main activity

is the acquisition of securities.

3.Loan Company (LLC) :which is a financialinstitution carrying on as its principal business the

providing of financewhether by making loans or advances or otherwise for any activity

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otherthan its own but does not include an Asset Finance Company

4. Infrastructure Finance Company :is a non-banking financecompany a) which deploys at

least 75 per cent of its total assets ininfrastructure loans, b) has a minimum Net Owned

Funds of Rs 300crore, c) has a minimum credit rating of ‘A ‘or equivalent d) and a CRARof

15%

5:Systematically Important core company :CIC-ND-SIis an NBFC carrying on the business of

acquisition of shares andsecurities

6. Infrastructure Debt FundNon-Banking Financial company:IDF-NBFC is a company

registered as NBFC to facilitate the flow of long-term debt into infrastructure projects. IDF-

NBFC raise resources through issue of Rupee or Dollar denominated bonds of minimum 5-

yearmaturity. Only Infrastructure Finance Companies (IFC) can sponsor IDF-NBFCs.

7.Non-banking financial company :MFI is a non-deposit taking NBFC having not less than

85% of itsassets qualifying assets which satisfy the following criteria:of loan disbursed by an

NBFC-MFI to a borrower with a ruralhousehold annual income not exceeding Rs 1,00,000 or

urban andsemi-urban household income not exceeding Rs 1,60,000.oloan amount does not

exceed Rs 50,000 in the first cycle and Rs1,00,000 in subsequent cycles. O of total

indebtedness of the borrower does not exceed Rs 1,00,000tenure of the loan not to be less

than 24 months for loan amountmore than Rs 15,000 with prepayment without

penalty.loan to be extended without collateral.aggregate amount of loans, given for income

generation, is notless than 50 per cent of the total loans given by the MFIs.63

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8.Mortgage Guarantee Company (MGC) – An MGC has at least 90% of its turnover derived

from the Mortgage Guarantee business or at least 90% of its gross income derived from the

Mortgage Guarantee business and has a net capital of INR 100 crore. A financial institution.

9.A Non-Operative Financial Holding Company (NOFHC) is a financial institution in which

promoters/promoter groups can establish new banks. It is a wholly owned non-operating

financial holding company (NOFHC) that holds the Bank and all other financial services

businesses and, to the extent permitted by applicable regulatory rules, is authorized by the

RBI or other financial sector regulator regulated.

Action against financial firms falsely claiming to be regulated by the Reserve Bank with

penalties under Indian Penal Code.

Information in this regard can be relayed to the nearest Reserve Bank office and the police.

Depositor should take precautions before he makes a deposit with NBFCA.

Precaution should be taken by a depositor before placing deposit with an NBFC :-

A depositor who wishes to make a deposit with NBFC should take the following precautions

before making a deposit.

Accept deposits. A list of deposit receiving NBFCs eligible to accept deposits is available at

www.rni.org.in.

The depositor should check the list of her NBFCs authorized to accept public deposits and

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confirm that she does not appear on the list of entities prohibited from accepting deposits.

1.The NBFC must display the Certificate of Registration (CoR) issued by the Reserve Bank

prominently on its website.

2.This certificate must also reflect that the NBFC is specifically authorized by the RBI to

accept deposits.

3.The maximum interest rate that an NBFC can pay depositors shall not exceed 12Five%.

The Reserve Bank changes interest rates depending on the macroeconomic environment.

The Reserve Bank publishes interest rate changes at www.rbi.org.in.

4. Depositors must request a proper receipt for each deposit made with us. The receipt

must be duly signed by a company-approved officer and state the date of deposit, the name

of the depositor, the amount in letters and numbers, the interest rate paid, the due date,

and the amount

5.Broker/Agent, etc. If collects public deposits on behalf of the NBFC, the depositor must

ensure that the broker/agent is duly authorized by the NBFC. Depositors should be aware

that public deposits are unsecured and deposit guarantee schemes are not available for

NBFC depositors.

6.The Reserve Bank of India does not accept any responsibility or warranty as to the current

state of the financial health of the company or the accuracy of any statements,

representations or opinions expressed by the company and repayment of deposits/payment

of debts by the company

Is the conducting of chit fund business permissible under law ?

Chit funds are governed by the Chit Funds Act 1982, a central statute administered by state

governments. A slip fund registered under this law can legally conduct a slip fund business.

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What Is money circulation / Ponzi / multi level schemes ?

A scheme is a scheme that promises to make money easily or quickly when you register as a

member.

Income from pyramid schemes and pyramid schemes comes not from selling the products

they offer, but from signing up more and more members, from which they charge hefty

subscription fees.

Recruiting additional members is the responsibility of all members. A portion of the

subscription fees collected in this way is distributed among the members at the top of the

pyramid. When the chain breaks, the pyramid collapses and the links further down the

pyramid are hit hardest.

A Ponzi scheme is a scheme that collects money from the public and promises high

returns65.

Since there is no accumulation of wealth, the money collected by one depositor is returned

to the other depositor. With no other revenue-generating activity, the system becomes

unprofitable, making it impossible for the people who run it to meet the revenue promised

or even return the principal collected.

The plan inevitably fails, and the perpetrators disappear along with the money.

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 FINANCIAL PERFORMANCES

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DIGITAL GOLDS
Although purchasing physical gold is the most prevalent and popular mode of investment,

digital gold has been gaining traction lately.

Individuals planning to invest in digital gold can go through the following sections to know

more about the benefits of digital gold investment and why you should consider to buy

digital gold.

What is Digital Golds ?

Digital Gold is an alternative to buying Yellow Metal in physical form. Gold can be purchased

online and an equivalent amount is stored as physical gold in insured vaults.

Minimum purchase amount is 1 rupee. Customers may sell all or part of their gold at any

time at the prevailing market price.

All of these gold pieces are 24k and government certified. We guarantee purity and deny

the possibility of fraud.

Benefits of Gold Investments :-

Investment in the digital form of this yellow metal can bring in a host of advantages. These

are as follows:

 Secure storage

The most significant advantage of digital gold is its hassle-free and safe storage. The

company offering digital gold will store one’s purchased gold in secure vaults. As the

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 buyer does not possess the gold, he also saves locker charges and needs not to

worry about theft or loss of gold.

 No lower limit on investment

There is no lower limit on investment; an individual can invest in any amount of gold.

The person will get possession of the quantity that he/she has invested. Gold worth

one rupee can also be bought.

 Use as collateral

One can use digital or electronic gold can be used as collateral for loans. Some

lenders accept it as collateral since these come with 24K purity and are stored in

secured vaults. It helps borrowers avoid the hassles related to the paperwork of

collateral and reduces their chances of loan rejection.

 Ease of exchange

Another significant advantage of digital gold is that it can be easily exchanged

anytime and anywhere for physical gold, coins, and bullions. This flexibility allows

individuals looking to convert their digital assets into physical ones.

Individualswanting to access their physical gold can have it delivered to their

doorsteps.

 Genuineness

Virtual gold is 24K and thus comes with 99.99% purity. Buyers do not have to worry

about purity and genuineness. Chances of fraud are negated, and purchasers get the

value that they have paid.

However, digital gold also comes with some drawbacks, which have been discussed

as follows.

 Risks with Digital Gold

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 No regulatory body

One of the major disadvantages associated with virtual gold is the lack of regulatory

agencies governing rules and regulations for trading. As a result, it leaves a lot of

grey areas that unscrupulous elements in the ecosystem could exploit.

 Storage time limit

Physical gold is stored in secured and insured vaults. However, there are many

platforms that provide such storage facilities for a specified period of time. After the

expiry of the said period, one will have to withdraw the gold or sell it.

 Upper limit of investment

Investment in virtual gold comes with an upper limit. Currently, an investor can

invest up to a maximum of 2 lakhs on most platforms. So, it is not an attractive

option for investors looking to make significant investments.

Who sells Electronic Golds ?

In India, there are three entities that offer investment in digital gold:

 MMTC PAMP India Pvt. Ltd.

 Augmont Goldtech Ltd.

 Digital Gold India Pvt. Ltd. (SafeGold)

These entities have the license to sell gold online in India.

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SWOT ANALYSIS OF DIGITAL GOLDs

FINANCIAL PERFORMANCE OF DIGITAL GOLD :-

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CONCLUSION

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The basic approach works and can provide excellent returns for investors who invest their

money in Indian stock market equities over the long term.

Investors should assess the relative performance of the economy, the health of the industry,

and the financial health of the company before choosing a stock as a vehicle for financial

investment.

When assessing the true value of a stock, it is worth considering the linkages between the

Indian stock market system and the outside world, the actual economic activity in the

country, the capital intensity of the industry and the earnings growth of individual

companies.

The effect of scale is visible, with investments in the small and medium sized segment

yielding better returns than returns from large cap stocks.

The PE ratio can be effectively used as a localization tool1:8:5.

Incorrectly priced stocks on the Indian stock market.

Then portfolio investment helps investors to explode the returns and minimize the risk of

investing in the stock market. This result can be demonstrated by evaluating the

performance of several international market stocks.

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REFERENCES

Following books are referred for this report :-

BOOKS:-

1.James J. Valentinefi CFA ; Best Practices for Equity Research Analysts

2. John Moschella; Financial Modelling for Equity Research

3. Aswath Damodaran ; The little Book of Valuation

Websites :-
www.economictimes.com

www.fmc.gov.in

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www.grow.in

www.rbi.gov.in

www.timesofindia.com

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