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A Study On Best Investment Options From The View Point of Investors With Reference To Motilal Oswal Securities PVT LTD.
A Study On Best Investment Options From The View Point of Investors With Reference To Motilal Oswal Securities PVT LTD.
Place: Chennai
This research is carried out to understand the various investment options which is available
for investment from the view point of investors. Investment is the application of money
for earning more money. The investment basically refers to the buying of a financial
product or any valued item with anticipation that positive returns will be received in the
future. People are earning, but they do not know where, when and how to invest their funds
or money earned by them. A proper understanding of money, its value, the available
investment avenues , various financial institutions providing the facility of investments,
the rate of return/risk, etc., are very important to successfully manage one’s finance for
achieving future goal .The study basically focuses on the various investment avenues
available to the investor, factors considered for investment. The study is based on using a
structured questionnaire. Many people are not willing to take risk for their funds, so many
prefer to invest in bank deposits, insurance, post office saving etc. Many of the people are
not aware about how to make an investment in share market, equity etc. “No pain no gain”
it is the golden principle of investment management. People now days are not ready to
bear risk, but at the same time more risk leads to more profit. Investors cannot avoid risk
but they can minimize the risk by investing their money in various types of investments so
that they can get a moderate profit. This study basically provides awareness among people
about various investment avenues available to them and what factors they should consider
before making an investment.
i
ACKNOWLEDGEMENT
I’m highly obliged to The Director of Sri Sairam Institute of Management Studies
Dr. K. Maran for providing me the opportunity to embark on this project report
I’m very grateful to all the faculty members of the department of management studies for
their encouragement and kind-hearted advice.
Finally, I thank my family members and friends who helped me in all possible ways to
make this project a success.
R. KAMALESH KRISHNA
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TABLE OF CONTENTS
ABSTRACT i
ACKNOWLEDGEMENT ii
TABLE OF CONTENTS iii
LIST OF TABLES iv
LIST OF FIGURES v
APPENDIX 65
iii
LIST OF TABLES
TABLE NO TITLE PAGE NO
2.1.7 Table showing the reason for savings and investment of the 39
Respondents
2.1.8 Table showing the how long have been investing/saving of the 40
Respondents
iv
LIST OF FIGURES
2.1.7 Figure showing the reason for savings and investment of the 40
Respondents
2.1.8 Figure showing the how long have been investing/saving of the 41
Respondents
v
1
CHAPTER I
1.1 INTRODUCTION
MEANING OF INVESTMENT
Most of the people keep aside a part of their income as savings. On the other end,
Investment is the act of investing the saved money in to financial products with a view to
generate income from future. In short, when a person has more money than he requires for
current consumption, he would be coined as a potential investor.
INVESTMENT is the employment of funds on assets with the aim of earning income or
capital appreciation. In other words, Investment is the commitment of funds which have
been saved from current consumption with the hope that some benefits will be received in
the future. Thus it is a reward for waiting for money. Saving of the individuals are invested
in assets depending on their risk and return demands, safety money, liquidity, the available
avenue for investment, various financial institutions, etc. For the achievement of above
goals appropriate decisions have to be taken.
DEFINITION OF INVESTMENT
Different thinkers interpret the word ‘Investment’ in their own ways in different periods.
However, the ideology or concept of investment is same in between them.
-WILLIAM F. SHARPE
- “Purchase of a financial asset that produce a yield that is proportional to the risk assumed
over some future investment period”
-F. AMLING
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CONCEPT OF INVESTMENT
There are two concept relating to Investment.viz, Economic concept and financial concept
of Investment.
The economic and financial concepts of investment are related to each other because
investment is a part of the savings of individuals which flow into the capital market either
directly or through institutions. Thus, investment decisions and financial decisions interact
with each other. Financial decisions are primarily concerned with the sources of money
where as investment decisions are traditionally concerned with uses or budgeting of
money.
ECONOMIC INVESTMENT
The concept of economic investment means net addition to the capital stock of the society.
The capital stock of the society is the goods which are used in the production of other
goods. The term investment implies the formation of new and productive capital in the
form of new construction and produces durable instrument such as plant and machinery.
Inventories and human capital are also included in this concept. Thus, an investment, in
economic terms, means an increase in building, equipment, and inventory.
FINANCIAL INVESTMENT
This is an allocation of monetary resources to assets that are expected to yield some gain
or return over a given period of time. It means an exchange of financial claims such as
shares and bonds, real estate, etc. Financial investment involves contrasts written on pieces
of paper such as shares and debentures. People invest their funds in shares, debentures,
fixed deposits, national saving certificates, life insurance policies, provident fund etc. in
their view investment is a commitment of funds to derive future income in the form of
interest, dividends, rent, premiums, pension benefits and the appreciation of the value of
their principal capital. In primitive economies most investments are of the real variety
whereas in a modern economy much investment is of the financial variety.
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Investment scenario as a banyan tree which growing day by day, by the way of introducing
new investment avenues with unique features to attract investors in to the world of
investment.
Investment avenues are the different ways that a person can invest his money. It also called
investment alternatives or investment schemes.
There are different methods are available to classify the investment avenues. Some of the
methods are as follows.
PHYSICAL INVESTMENTS:
Physical investment is the investment in physical or capital goods such as plant and
machinery, motor cars, ships, buildings, etc.
- REAL ESTATE:
Real estate is basically defined as immovable property such as land and everything
permanently attached to it like buildings. Real property as opposed to personal or movable
property is characterized by the right to transfer the title to the land whereas title to personal
property can be retained. It is true to say that real estate offer a rate of return which is
superior to avenues such as company deposits on a long term basis. The investment in real
estate essentially depends on the risks associated with it, and the alternative investment
opportunities.
For ages, gold and silver have been considered as a form of investment. They are
considered as best hedge against inflation. This is a form of investment amongst the rural
and semi-urban population. Besides, investors tend to invest in jewelry instead of pure
gold. Gold has been used throughout history as money and has been a relative standard for
currency equivalents specific to economic regions or countries, until recent times.
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- ART:
Paintings are the most sought after form of art. The prices in the art market are rise is
expected to continue. The trend in the art market today is to invest in young upcoming
painters whose prices will soar over the years.
Here some of the physical assets like machinery, equipment etc. are useful for further
production whereas some like gold and silver ornaments, motor cars etc. are not useful for
further production
FINANCIAL INVESTMENTS
It means employment of funds in the form of assets with the object of earning additional
income or appreciation in the value of investment in the future. Assets which are the
subject matter of investment may be varying between safe and risky ones.
These financial securities that are easily marketable and converted into cash in short time.
Such investments are also known as transferable investments.
Some marketable securities yield income which is varying time to time. Such securities
are called as variable income securities. It includes;
- EQUITY SHARES:
These securities carry more risk than investing in debt instruments. There is no assured
return but when we invest in a share of company, we become an owner of the company to
the extent of the capital invested.
These are the securities which yield certain fixed income to a regular interval of time.
Securities which comes under this category as follows;
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- PREFERENCE SHARES:
These are the shares which has some preferential rights. The charactors of the preference
share are hybrid in nature. Some of its features resemble the bond and others the equity
shares. Like bonds, their claims on the company’s incomes are limited and they receive
fixed dividend. At the same time like the equity, it is a perpetual liability of the corporate.
These holders do not enjoy any of the voting powers except when any dissolution affects
their right. Preference share also called ‘non-voting shares’.
- DEBENTURES:
It is a document issued by the company under its common seal for acknowledgment of
debt. There are somany types of debenture viz, Registered debenture, unsecured debenture,
convertible debenture, redeemable debenture etc. An investment in debentures fetches a
fixed and regular rate of interest.
- BONDS:
Bond is a long term debt instrument that promises to pay a fixed annual sum as interest for
a specified period of time. Generally, Debentures and bonds are one and the same.
Americans called ‘bond’, Europeans called ‘debenture’. In India, generally debt issued by
government known as bond, if it issued by private, known as debenture.
- GOVERNMENT SECURITIES:
The securities issued by central, state and quasi government agencies are known as
government securities or gilt edged securities. As government guaranteed security is a
claim on the government, it is a secured financial instrument, which guarantees the income
and capital. The rate of interest on these securities is relatively lower because of their high
liquidity and safety.
These securities have very short term maturity say less than a year.The common money
market instruments are as under;
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These are the unsecured short term debt instruments issued by credit worthy companies
for meeting their short term liabilities. CP is the promissory note with a fixed maturity
period. They are negotiable and transferable by endorsement and delivery. Its maturity
period ranges between 7 days to 1 year.
- SAVING CERTIFICATES:
Purchase of saving certificate is another investment avenue popular in today. The rate of
interest and the maturity period are mentioned on the certificates. There are tax benefits
also in some certificates. The important saving certificates are;
* Indra vikas patra & Kisan vikas patra (IVP & KVP)
These are the saving certificate issued by the post office with the name IVP & KVP.
INDRA VIKAS PATRA is a bearing certificate bearing no names of the purchasers and
can simply be transferred by delivery. There is no tax benefit on it. These certificates were
introduced in 1986 and were sold through post offices. It assured the doubling of the
amount in 5 years time.
KISAN VIKAS PATRA is another type of post office investment. The investor can make
investment in any head office or sub post office in cash, DD. An individual, two or more
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individuals in joint names, a guardian on behalf of minor, and a trust can make investment.
There is no limit for maximum investment.
all types of investors. Every investment has its own strength and weakness for example:-
while savings bank account gives satisfaction of liquidity, it causes reason for low level of
return. Similarly, Investment based on risk motive, the investor has to understand the
market trend and decide the objectives of investment. This will not only give satisfaction
but also a better return for investment made. The main objective of the study is to find out
and understand various investment management companies. We will analyse and explore
the faster that influences investment method and to give suggestions to bring
improvements in the present investment methods. This project will enhance the investor
to know about the prevailing investment policies of financial management companies and
investors views about investment method. It may be a guide for adapting new investment
policies according to needs of the investors by which satisfactory investment environment
can be created.
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The Government of India has introduced several reforms to liberalise, regulate and
enhance this industry. The Government and Reserve Bank of India (RBI) have taken
various measures to facilitate easy access to finance for Micro, Small and Medium
Enterprises (MSMEs). These measures include launching Credit Guarantee Fund Scheme
for Micro and Small Enterprises, issuing guideline to banks regarding collateral
requirements and setting up a Micro Units Development and Refinance Agency
(MUDRA). With a combined push by both government and private sector, India is
undoubtedly one of the world's most vibrant capital markets. In 2017,a new portal named
'Udyami Mitra' has been launched by the Small Industries Development Bank of India
(SIDBI) with the aim of improving credit availability to Micro, Small and Medium
Enterprises' (MSMEs) in the country. India has scored a perfect 10 in protecting
shareholders' rights on the back of reforms implemented by Securities and Exchange Board
of India (SEBI).
MARKET SIZE
The MF industry’s AUM has grown from Rs 10.96 trillion (US$ 156.82 billion) in
October 2014 to Rs 26.33 trillion (US$ 376.73 billion) in October 2019.
Another crucial component of India’s financial industry is the insurance industry.
The insurance industry has been expanding at a fast pace. The total first year premium of
life insurance companies reached Rs 214,673 crore (US$ 30.72 billion) during FY19.
Along with the secondary market, the market for Initial Public Offers (IPOs) has
also witnessed rapid expansion. In FY19, Rs 14,674 crore (US$ 2.10 billion) has been
raised from Initial Public Offerings (IPOs).
Furthermore, India’s leading bourse Bombay Stock Exchange (BSE) will set up a
joint venture with Ebix Inc to build a robust insurance distribution network in the country
through a new distribution exchange platform.
INVESTMENTS
• The net investment in Indian equities by FPIs is close to the Rs 1 trillion (US$
14.52 billion) mark during calendar year 2019, touching a six-year high.
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GOVERNMENT INITIATIVES
• In November 2019, government allocated Rs 10,000 crore to set up AIFs for revival
of stalled housing projects.
• Under the Interest Subvention Scheme for MSMEs, Rs 350 crore (US$ 50.07
million) has been allocated under Union Budget 2019-20 for 2 per cent interest
subvention for all GST registered MSMEs, on fresh or incremental loans.
• In December, 2018, Securities and Exchange Board of India (SEBI) proposed
direct overseas listing of Indian companies and other regulatory changes.
• Bombay Stock Exchange (BSE) introduced weekly futures and options contracts
on Sensex 50 index from October 26, 2018.
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FINANCIAL MARKET
The financial markets have been classified as cash market, derivatives market,
debt market and commodities market. Cash market, also known as spot market, is the most
sought after amongst investors. Majority of the sample broking firms are dealing in the
cash market, followed by derivative and commodities. 27% firms are dealing only in the
cash market, whereas 35% are into cash and derivatives. Almost 20% firms trade in cash,
derivatives and commodities market.
Firms that are into cash, derivatives and debt are 7%. On the other hand, firms into
cash and commodities are 3%, cash & debt market and commodities alone are 2%. 4%
firms trade in all the markets. The capital market is the market for securities, where
companies and governments can raise long term funds. It is a market in which money is
lent for periods longer than a year nation’s capital market includes such financial
institutions as banks, insurance companies, and stock exchanges that channel long term
investment funds to commercial and industrial borrowers Unlike the money market, on
which lending Is ordinarily short term, the capital market typically finances fixed
investments like those in buildings and machinery.
Nature and constituents the capital market consists of number of individuals and
institutions. Including the government/ that canalize the supply and demand for long term
capital and claims on capital. The stock exchange, commercial banks, cooperative banks,
saving banks, development banks, insurance companies, investment trust or companies,
etc are important constituents of the capital markets. The capital market, like the money
market, has three important components, namely the suppliers of loanable funds, the
borrowers and the Intermediaries who deal with the leaders on the one hand and the
borrowers on the other. The demand for capital comes mostly from agriculture, industry,
trade The government The predominant form of industrial organization developed capital
market becomes a necessary infrastructure for fast industrialization capital market not
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concerned solely with the issue of new claims on capital, but also with dealing in existing
claims.
In the cash market, around 34% firms trade at NSE, 14% at BSE and 52% trade at
both exchanges. In the equity derivative market, 48% of the sampled broking houses are
members of NSE and 7% trade at BSE, while 45% of the sample operates in both stock
exchanges. Around43% of the broking houses operating in the debt market, trade at both
exchanges with 31% and26% firms uniquely at NSE and BSE respectively of the brokers
operating in the commodities market, 57% firms operate at NCDEX and MCX. Around
20% and 21% firms are solely in NCDEX and MCX respectively, whereas 2% firms trade
in NCDEX, MCX and NMCE.
Most of the trading in the Indian stock market takes place on its two stock exchanges:
the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The BSE
has been in existence since 1875. The NSE, on the other hand, was founded in 1992 and
started trading in 1994. However, both exchanges follow the same trading mechanism,
trading hours, settlement process, etc. At the last count, the BSE had more than 5,000 listed
firms, whereas the rival NSE had about 1,600. Out of all the listed firms on the BSE, only
about 500 firms constitute more than 90% of its market capitalization; the rest of the crowd
consists of highly illiquid shares.
Almost all the significant firms of India are listed on both the exchanges. NSE enjoys a
dominant share in spot trading, with about 70% of the market share, as of 2009, and almost
a complete monopoly in derivatives trading, with about a 98% share in this market, also
as of 2009. Both exchanges compete for the order flow that leads to reduced costs, market
efficiency, and innovation. The presence of arbitrageurs keeps the prices on the two stock
exchanges within a very tight range.
Trading Mechanism
Trading at both the exchanges takes place through an open electronic limit order book in
which order matching is done by the trading computer. There are no market
makers or specialists and the entire process is order-driven, which means that market
orders placed by investors are automatically matched with the best limit orders. As a result,
buyers and sellers remain anonymous. The advantage of an order-driven market is that it
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brings more transparency by displaying all buy and sell orders in the trading system.
However, in the absence of market makers, there is no guarantee that orders will be
executed.
All orders in the trading system need to be placed through brokers, many of which provide
an online trading facility to retail customers. Institutional investors can also take advantage
of the direct market access (DMA) option in which they use trading terminals provided by
brokers for placing orders directly into the stock market trading system.
Equity spot markets follow a T+2 rolling settlement. This means that any trade taking place
on Monday gets settled by Wednesday. All trading on stock exchanges takes place between
9:55 am and 3:30 pm, Indian Standard Time (+ 5.5 hours GMT), Monday through Friday.
Delivery of shares must be made in dematerialized form, and each exchange has its
own clearing house, which assumes all settlement risk by serving as a
central counterparty.
Market Indexes
The two prominent Indian market indexes are Sensex and Nifty. Sensex is the
oldest market index for equities; it includes shares of 30 firms listed on the BSE, which
represent about 45% of the index's free-float market capitalization. It was created in 1986
and provides time series data from April 1979, onward.
Another index is the Standard and Poor's CNX Nifty; it includes 50 shares listed on the
NSE, which represent about 62% of its free-float market capitalization. It was created in
1996 and provides time series data from July 1990.
Market Regulation
The overall responsibility of development, regulation, and supervision of the stock market
rests with the Securities and Exchange Board of India (SEBI), which was formed in 1992
as an independent authority. Since then, SEBI has consistently tried to lay down market
rules in line with the best market practices. It enjoys vast powers of imposing penalties on
market participants, in case of a breach.
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India started permitting outside investments only in the 1990s. Foreign investments are
classified into two categories: foreign direct investment (FDI) and foreign portfolio
investment (FPI). All investments in which an investor takes part in the day-to-day
management and operations of the company are treated as FDI, whereas investments in
shares without any control over management and operations are treated as FPI.
For making portfolio investment in India, one should be registered either as a foreign
institutional investor (FII) or as one of the sub-accounts of one of the registered FIIs. Both
registrations are granted by the market regulator, SEBI. Foreign institutional investors
mainly consist of mutual funds, pension funds, endowments, sovereign wealth funds,
insurance companies, banks, and asset management companies. At present, India does not
allow foreign individuals to invest directly in its stock market. However, high-net-worth
individuals (those with a net worth of at least US$50 million) can be registered as sub-
accounts of an FII.
Foreign institutional investors and their sub-accounts can invest directly into any of the
stocks listed on any of the stock exchanges. Most portfolio investments consist of
investment in securities in the primary and secondary markets, including
shares, debentures, and warrants of companies listed or to be listed on a recognized stock
exchange in India. FIIs can also invest in unlisted securities outside stock exchanges,
subject to the approval of the price by the Reserve Bank of India. Finally, they can invest
in units of mutual funds and derivatives traded on any stock exchange.
An FII registered as a debt-only FII can invest 100% of its investment into debt
instruments. Other FIIs must invest a minimum of 70% of their investments in equity. The
balance of 30% can be invested in debt. FIIs must use special non-resident rupee bank
accounts, in order to move money in and out of India. The balances held in such an account
can be fully repatriated.
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The government of India prescribes the FDI limit and different ceilings have been
prescribed for different sectors. Over a period of time, the government has been
progressively increasing the ceilings. FDI ceilings mostly fall in the range of 26-100%.
By default, the maximum limit for portfolio investment in a particular listed firm is decided
by the FDI limit prescribed for the sector to which the firm belongs. However, there are
two additional restrictions on portfolio investment. First, the aggregate limit of investment
by all FIIs, inclusive of their sub-accounts in any particular firm, has been fixed at 24% of
the paid-up capital. However, the same can be raised up to the sector cap, with the approval
of the company's boards and shareholders.
Secondly, investment by any single FII in any particular firm should not exceed 10% of
the paid-up capital of the company. Regulations permit a separate 10% ceiling on
investment for each of the sub-accounts of an FII, in any particular firm. However, in the
case of foreign corporations or individuals investing as a sub-account, the same ceiling is
only 5%. Regulations also impose limits for investment in equity-based derivatives trading
on stock exchanges.
Foreign entities and individuals can gain exposure to Indian stocks through institutional
investors. Many India-focused mutual funds are becoming popular among retail investors.
Investments could also be made through some of the offshore instruments,
like participatory notes (PNs) and depositary receipts, such as American depositary
receipts (ADRs), global depositary receipts (GDRs), and exchange-traded funds (ETFs)
and exchange-traded notes (ETNs).
As per Indian regulations, participatory notes representing underlying Indian stocks can
be issued offshore by FIIs, only to regulated entities. However, even small investors can
invest in American depositary receipts representing the underlying stocks of some of the
well-known Indian firms, listed on the New York Stock Exchange and Nasdaq. ADRs are
denominated in dollars and subject to the regulations of the U.S. Securities and Exchange
Commission (SEC). Likewise, global depositary receipts are listed on European stock
16
exchanges. However, many promising Indian firms are not yet using ADRs or GDRs to
access offshore investors.
Retail investors also have the option of investing in ETFs and ETNs, based on Indian
stocks. India ETFs mostly make investments in indexes made up of Indian stocks. Most of
the stocks included in the index are the ones already listed on NYSE and Nasdaq. As of
2009, the two most prominent ETFs based on Indian stocks are the Wisdom-Tree India
Earnings Fund (EPI) and the PowerShares India Portfolio Fund (PIN). The most
prominent ETN is the MSCI India Index Exchange Traded Note (INP). Both ETFs and
ETNs provide a good investment opportunity for outside investors.
Emerging markets like India, are fast becoming engines for future growth. Currently, only
a very low percentage of the household savings of Indians are invested in the domestic
stock market, but with GDP growing at 7%-8% annually and a stable financial market, we
might see more money joining the race. Maybe it's the right time for outside investors to
seriously think about joining the India bandwagon.
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• Wealth Management
• Broking & Distribution
• Commodity Broking
• Portfolio Management Services
• Institutional Equities
• Private Equity
• Investment Banking Services
• Principal Strategies
● Focused on the development of wealth for all of its clients, such as institutional clients,
HNWIs and retail clients
● Network spread across 548 cities containing 1,565 business locations run by our
business partners and us with 749,745 total registered clients
● Shares listed on the Bombay Stock Exchange and the Mumbai National Stock Exchange
18
CORPORATE GOVERNANCE
WEALTH MANAGEMENT
●Advising on in-house products such as PMS, PE, most securities, equity broking and
third- party products such as mutual funds, insurance and structured goods, as well as a
range of alternative investments, niche services and credit offers.
PRIVATE EQUITY
● MOPE is an investment manager and private equity fund adviser, serves as an adviser
and consultant to the investor companies and leverages the motilal oswal group's
relationships for the good of those businesses
19
● India business excellence fund (IBEF) is a us$ 125 million growth capital fund, fully
committed across 13 firms.
● India realty excellence fund (IREF) is an overall aua 2 billion domestic real estate fund.
Ire made investments through 6 deals, committing approximately 74 percent of its funds
under management, as of June 2012
● MOPE reached commitments of '4.9 billion from domestic and offshore investors
following the second closing of its second sector-agnostic per fund, India business
excellence fund-ii (IBEF ii)
● MOPE also organized annual investor meets for its IBEF and IREF in may 2012
INVESTMENT BANKING
● In 2010 the 'Asia Pacific Cross-Border Contract' and 'India M&A Investment Banker'
were awarded to Shree Renuka Sugars of India and Brazil's Equipav SA for M&A
transactions.
● Due to various our good cross-border transaction experience, Motilal Oswal Investment
Banking was the Lead Sponsor of the Latin America India Investors Forum held in
Mumbai in November 2011. This Platform was built to link companies with institutional
investors and start the process towards India-Latin America deals and business ties.
● Fundraising and dealing activities remain sluggish this year due to global slowdowns,
government policy uncertainties, poor equity market performance and high borrowing
costs.
ASSET MANAGEMENT
● MOSL transferred the PMS company to Motilal Oswal AMC via slump sale with effect
from Oct 2010.
● As per SEBI data, our PMS had a market share of 8 percent as of August 2011 in terms
of discretionary PMS assets.
● Our flagship 'Value' strategy outperformed the benchmark index – Nice, reliably over
shorter and longer periods of time.
• Most shares m50 etf (m50) is india's 1st fundamentally weighted etf based on the
s&p cnx nifty index.
• Most shares midcap 100 etf (m100) is india's 1st midcap etf based on the cnx
midcap index.
Most shares nasdaq 100 etf (n100) is india's 1st etf based on indian rupees.
• Vishal Lala (Lubin School of Business, Pace University, New York, New
York,United States) (2015) This study aims to explore the effect of amount of
effort invested by consumers toward the purchase of a product on the amount they
will spend on the product. Authors argue that greater effort on the part of the
consumer will lead to an irrational focus on sunk effort causing them to spend
more.
• Abhijeet Birari & Umesh Patil (2014) studied the spending and savings habit of
youth in the city of Aurangabad. The study finds that significant difference exists
in the spending habits of students belonging to different education levels. The study
finds that most of the youth in the sample spend a large portion of the money on
consumable goods and that due to lack of awareness, the amount of money saved
or invested is very little.
• Gina Chowa, Mat Despard & Isaac Osei-Akoto (2012) in their paper ‘Youth
saving patterns and performance in Ghana’ attempted to find whether the youth
will participate in savings via formal financial services if given the opportunity.
The study found that most youth in the sample, set aside money regularly, hold
onto their set aside money for short periods of time and use it mostly for short-term
consumptive purposes. The study concluded that, youth of a developing country
have a high propensity to save but, lack of proper knowledge and information
23
restricted the youth from venturing out into the area formal savings and
investments.
• Patel & Patel (2012) studied the investment perspective of salaried people. The
paper aimed at studying the behavioural pattern & difference in perception of an
individual related to various investment alternatives. The study finds that the youth
that was surveyed preferred investments over savings. The study also discovers
that, rather than safe and secure investments, the youth prefer investments that are
high risk but also yield high returns.
• Murithi Suriya, Narayanan and Arivazhagan (2012), in their study reveal that
female investors dominate the investment market in India. According to their
survey, majority of the investors are found to be considering two or more sources
of information to make investment decisions. Most of the investors discuss with
their family and friends before making an investment decision
• Suman Chakraborty and Sabat Kumar Digal (2011) found from their work that,
saving is significantly influenced by demographic factors such as age, occupation
and income level of investors. . It was found that female investors tend to save
more in a disciplined way than the male investors. Paper attempts to explore
whether dichotomy of the popular believes that men are more pro-risk than women.
24
It was observed that women are risk averse indeed but save more than the male
counterparts as the income level rises.
• Deshpande & Zimmerman (2010) explored the potential of Youth Savings
Accounts (YSAs) as a vital intervention in youth development and financial
inclusion. The paper finds that the best way to encourage youth savings and asset
accumulation is by offering major financial incentives to jump start the savings
process. The paper found evidence that youth savings may have the potential to be
a high leverage intervention, with positive effects on youth development and
financial inclusion.
• Kabra, Mishra and Dash (2010) studied the factors which affect individual
investment decision and differences in the perception of investors in the decision
of investing on the basis of age and gender and found that investors' age and gender
predominantly decides the risk taking capacity of investors.
• Hillel Gamoran (2008) The Mishnah had ordained that one could set up a
storekeeper or give money to a trader on a half-profit basis. This meant that an
investor could provide the funds for an enterprise and share the profits (or suffer
the losses) equally with the working partner. In the Gemara this was called aniska.
In order to avoid the possibility that the active partner’s labor would be a gift to the
investor (and be construed as interest), the Mishnah had stipulated that the investor
had to pay the worker for his labor.
• Willem G. Keeris (2008) This paper aims to focus on three points of the theory
about property investment risks: the management risk is not taken into account; the
assumed regularity of the damping of the specific risks with an increase in the
number of investments; and the assumption that the market risk is constant.
26
This study was mainly planned to understand the various investment opportunities
available for people and also to understand the preferred investment avenues. This research
study surely will provide a parameter particularly for a better understanding of the
investment avenues available to an investor. The study will help to know the preference of
the customers, mode of investment, which company, portfolio, option for getting return
and so on they prefer. This project report may help the company to make further planning
and implement strategies to develop.
28
RESEARCH DESIGN
Research design is the blue print for research work that guides the researcher in a
scientific way towards the achievement of the objectives. Survey method has supported
the researcher to find the perception and awareness of best investment option among the
Investors. Descriptive Research was adopted for research purpose.
COLLECTION OF DATA
The method adopted to carry out this report was based on both primary and
secondary data.
PRIMARY DATA
The primary data was collected through
• Interviews
• Questionnaire
Primary data are those which are fresh and are collected for the first time, and thus
happen to be original in character. The primary data was collected through direct
personal interviews and questionnaires.
SECONDARY DATA
The secondary data was collected through
• Books
• Internet
• Magazines
• Journals
Secondary data are those which have already been collected by someone else and
which already had been passed through the statistical process. The secondary data
was collected through websites, books, magazines, journals.
29
In this study, primary data has been collected directly from the respondents using a
questionnaire.
SAMPLE DESIGN
SAMPLE:
A few items of the population are made as respondents for the survey. Such selected items
are called samples. In other words, those items that are representing a population are
known as samples.
SAMPLE SIZE:
The numerical value of the representation is the sample size. Sample Size = 120
SAMPLING TECHNIQUE:
Convenience sampling techniques is used in this study. When elements in the population
have a known chance of being chosen as subjects in the sample, we resort to probability
sampling technique.
Percentage Analysis
Percentage analysis refers to a ratio. With the help of absolute figures, it will be
difficult to interpret any meaning from the collected data, but when percentages are found
out then it becomes easy to find the relative difference between two or more attributes.
The chi-square test is an important test among the several tests of significant
developed by statistical. Chi-square is symbolically written as “χ²”, is s statistical measure
used in the context of sampling analysis for comparing a variance to a theoretical
variance.
30
Goodness of fit test is a method which makes a statement or claim concerning the
nature of the distribution for the whole population. The data in the sample is examined in
order to see whether this distribution is consistent with the hypothesized distribution of the
population or not
CHAPTER - 2
ANALYSIS
The term analysis refers to the measurement of certain measures along with the quest for
patterns or relationships which exist between data groups. The data must be processed and
analyzed after data collection in accordance with the guidelines set out for the purpose at
the time the research plan is being created.
INTERPRETATION
Interpretation refers to the role of drawing conclusions from the evidence obtained after
the research results have an empirical and or experimental meaning. The interpretation
function has two key aspects:
Female 18 15.0
Male
102 85.0
Total
120 100.0
32
Interpretation
The table shows that majority 85% of respondents belongs to male, 15% of
respondents belongs to female.
33
18 - 29 68 56.7
30 - 40 39 32.5
41 - 50 9 7.5
Above 50 4 3.3
Interpretation
34
The table shows that 56.7% of respondents belong to age group of 18 - 29, 32.5%
of respondents belongs to 30 - 40 age groups, 7.5% of respondents belongs to below 41-
50 age groups, 3.3% of respondents belongs to age group of above 50.
Employed 42 35.0
Others 33 27.5
Professional 15 12.5
Interpretation
The table shows that 35% of respondents are employed, 25% of respondent are self -
employed, 12.5% of respondents are professional and other respondent are 27.5% peoples.
Frequency Percent
Figure No.2.1.4
Interpretation
The table shows that 33.3% of respondents belongs to Below Rs. 25000,
36.7% of respondents belongs to Rs.25000 - 35000, 15.8% of respondents belongs to
Rs.35000 - 45000 and 17% of respondents belongs to above Rs. 45000.
37
Frequency Percent
No 2 1.7
Maybe 7 5.8
Interpretation
38
The table show that majority of the 92.5% of the respondents have the habit of saving
income and 1.7% of the respondents does not have the habit of saving income.
Frequency Percent
10 - 20% 62 51.7
20 - 30% 30 25.0
Interpretation
The table show that 17.5% of the respondents are below 10%, 51.7% of the respondents
belongs to 10 – 20%, 25% of the respondents belongs to 20 – 30% and 5.8% of the
respondents are 30% and above.
Table showing the reason for savings and investment of the Respondents
Education 1 0.8
Protection 8 6.7
Figure showing the reason for savings and investment of the Respondents
Interpretation
The table show that 0.8% of the respondents belongs to education, 6.7% of the
respondents belongs to the protection, 20.8% of the respondents belongs to meet
emergencies, 41.7% of the respondents belongs to meet future needs and 30% of the
respondents belongs to the wealth maximization.
Table showing the how long have been investing/saving of the Respondents
Frequency Percent
2 - 5 years 52 43.3
5 - 10 years 19 15.8
Figure showing the how long have been investing/saving of the Respondents
Interpretation
The table show that 31.7% of the respondents are below 2 years, 43.3% of the
respondents are 2-5 years, 15.8% of the respondents are 5-10 years, 9.2% of the
respondents are above 10 years.
42
Frequency Percent
Interpretation
The table show that 8.3% of the respondents prefers high risk, 31.7% of the respondents
prefers low risk and 60% of the respondents prefers moderate risk.
43
Frequency Percent
Interpretation
44
The table show that 35.8% of the respondents expects high return, 8.3% of the
respondents expects less return and 55.8% of the respondents expects medium return.
Frequency Percent
12 - 24% 67 55.8
24 - 36% 29 24.2
Interpretation
The table show that 55.8% of the respondents expects 12-24% rate of return, 24.2% of
the respondents expects 24-36% rate of return, 6.7% of the respondents expects above
36% rate of return and 13.3% of the respondents expects less than 12% rate of return.
Frequency Percent
Interpretation
The table show that 39.2% of the respondents are less than 6 months, 19.2% of the
respondents are less than a month, 25% of the respondents are less than a year and 16.7%
of the respondents are more than a year.
Frequency Percent
Newspapers 6 5.0
Interpretation
The table show that 4.2% of the respondents decide on advertisement boards and
banners, 62.5% of the respondents decide on electronic media, 14.2% of the respondents
decide on friends and relatives, 14.2% of the respondents decide on investment
companies and 5% of the respondents decide on newspapers.
48
Frequency Percent
Brokers 45 37.5
Interpretation
The table show that 3.3% of the respondents manage by asset liability management,
37.5% of the respondents manage by brokers, 14.2% of the respondents manage by
portfolio management and 45% of the respondents trading by self.
49
Frequency Percent
Interpretation
50
The table show that 26.7% of the respondents have basic knowledge,15% of the
respondents have extensive knowledge and 58.3% of the respondents have fair amount of
knowledge.
Frequency Percent
Long term 39 32.2
Interpretation
The table show that 32.2% of the respondents are long term, 54.5% of the respondents
are medium term and 12.4% of the respondents are short term.
Frequency Percent
Intraday 30 24.8
Swing 56 46.3
Interpretation
The table show that 24.8% of the respondents are intraday trading, 28.1% of the
respondents are long term trading and 46.3% of the respondents are swing trading.
Frequency Percent
Maybe 11 9.1
No 8 6.6
Interpretation
The table show that 9.1% are maybe accept, 83.5% accept and 6.6% do not accept that
global economic conditions affect their return on investment.
Frequency Percent
Effective 52 43.0
Interpretation
The table show that 43% of the respondents are effective, 5% of the respondents are not
effective and 51.2% of the respondents are very effective.
55
Table showing the Chi-Square test for the investing/saving of the respondents
and risk desired by the respondents.
Risk Desired
Count
High risk Low risk Moderate risk Total
5 - 10 years 3 3 13 19
Above 10 years 4 2 5 11
Below 2 years 1 21 16 38
Total 10 38 72 120
Chi-Square Tests
Hence, Ho is accepted
Interpretation
Table showing the Chi-Square test for the expected rate of return per annum
and time taken to convert the investment into cash.
Count
Less than 6 Less than a Less than a More than a
months month year year Total
Total 47 23 30 20 120
Chi-Square Tests
Hence Ho is accepted.
Interpretation
There is no significant relationship between the expected rate of return and time taken to
convert the investment to cash.
57
Table showing the Chi-Square test for the investment options of the
respondents and satisfaction of the respondents.
Satisfaction
Count
Average Best Good Poor Total
Shares 4 9 15 0 28
10 3 19 0 32
Gold
13 4 24 1 42
SIP
5 2 8 0 15
Bonds
1 1 1 0 3
Mutual funds
Total 33 19 67 1 120
Chi-Square Tests
Hence Ho is rejected.
Interpretation
CHAPTER III
3.1 FINDINGS
• The table shows that majority 85% of respondents belongs to male, 15% of
respondents belongs to female.
• The table shows that 56.7% of respondents belong to age group of 18 - 29, 32.5%
of respondents belongs to 30 - 40 age groups, 7.5% of respondents belongs to
below 41-50 age groups, 3.3% of respondents belongs to age group of above 50.
• The table shows that 35% of respondents are employed, 25% of respondent are self
- employed, 12.5% of respondents are professional and other respondent are 27.5%
peoples.
• The table shows that 33.3% of respondents belongs to Below Rs. 25000, 36.7%
of respondents belongs to Rs.25000 - 35000, 15.8% of respondents belongs to
Rs.35000 - 45000 and 17% of respondents belongs to above Rs. 45000.
• The table show that majority of the 92.5% of the respondents have the habit of
saving income and 1.7% of the respondents does not have the habit of saving
income.
• The table show that 17.5% of the respondents are below 10%, 51.7% of the
respondents belongs to 10 – 20%, 25% of the respondents belongs to 20 – 30%
and 5.8% of the respondents are 30% and above.
• The table show that 0.8% of the respondents belongs to education, 6.7% of the
respondents belongs to the protection, 20.8% of the respondents belongs to meet
emergencies, 41.7% of the respondents belongs to meet future needs and 30% of
the respondents belongs to the wealth maximization.
59
• The table show that 31.7% of the respondents are below 2 years, 43.3% of the
respondents are 2-5 years, 15.8% of the respondents are 5-10 years, 9.2% of the
respondents are above 10 years.
• The table show that 8.3% of the respondents prefers high risk, 31.7% of the
respondents prefers low risk and 60% of the respondents prefers moderate risk.
• The table show that 35.8% of the respondents expects high return, 8.3% of the
respondents expects less return and 55.8% of the respondents expects medium
return.
• The table show that 55.8% of the respondents expects 12-24% rate of return,
24.2% of the respondents expects 24-36% rate of return, 6.7% of the respondents
expects above 36% rate of return and 13.3% of the respondents expects less than
12% rate of return.
• The table show that 39.2% of the respondents are less than 6 months, 19.2% of
the respondents are less than a month, 25% of the respondents are less than a year
and 16.7% of the respondents are more than a year.
• The table show that 4.2% of the respondents decide on advertisement boards and
banners, 62.5% of the respondents decide on electronic media, 14.2% of the
respondents decide on friends and relatives, 14.2% of the respondents decide on
investment companies and 5% of the respondents decide on newspapers.
• The table show that 3.3% of the respondents manage by asset liability
management, 37.5% of the respondents manage by brokers, 14.2% of the
respondents manage by portfolio management and 45% of the respondents
trading by self.
60
• The table show that 26.7% of the respondents have basic knowledge,15% of the
respondents have extensive knowledge and 58.3% of the respondents have fair
amount of knowledge.
• The table show that 32.2% of the respondents are long term, 54.5% of the
respondents are medium term and 12.4% of the respondents are short term.
• The table show that 24.8% of the respondents are intraday trading, 28.1% of the
respondents are long term trading and 46.3% of the respondents are swing
trading.
• The table show that 9.1% are maybe accept, 83.5% accept and 6.6% do not
accept that global economic conditions affect their return on investment.
• The table show that 43% of the respondents are effective, 5% of the respondents
are not effective and 51.2% of the respondents are very effective.
3.2 SUGGESTIONS
• Seminars and workshops must be organized by the government and investment
management firms to channelize the savings of the people into investment.
• Government should create awareness about the grievance redressal forum to the
public.
• Awareness programs and discussion forums on Paper Gold (ETF) can be organized
to motivate investors to make investments in Gold ETF which is quite Hassle free.
• Investors must realize that investment with high return may also pose high risk.
Investors should not be greedy to make quick return.
• Investors should segregate the investment and channelize the investment into
different investment option such as fixed deposit, Gold, Shares, Mutual funds,
SIP and Real estate.
• Government can provide lot of tax rebate and concession for the investors , this
can help in capital formation in country.
• Brokers must provide disciplined trading to retain old investors and to attract
new investors.
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3.3 CONCLUSION
BIBILIOGRAPHY
REFERENCES:
Fox, M., Glosten, L., &Rauterberg, G. (2019). Introduction. In The New Stock
Market: Law, Economics, and Policy (pp. 1-8). New York; Chichester, West Sussex:
Columbia University Press
Liqiang Chen, (2017) "Managerial incentives, R&D investments and cash flows",
Managerial Finance, Vol. 43 Issue: 8, pp.898-913
Abhijeet Birari & Umesh Patil. (2014). Spending and Savings Habits of Youth
in the City of Aurangabad.
Gina A.N. Chowa, Mat Despard & Isaac Osei-Akoto. (2012). Youth Saving
Patterns and Performance in Ghana.
Chakraborty, Suman and Digal, Sabat Kumar. (2011). A Study of Saving and
Investment Behaviour of Individual Households – An Empirical Evidence from Orissa.
Personal Finance & Investments (PF&I) 2011 Conference.
Kabra Gaurav, Mishra Prashant Kumar and Dash Manoj Kumar. (2010).
Factors Influencing Investment Decision of Generations in India: An Econometric Study.
ISSN 2229 – 3795.
Faten Zoghlami (2013): Momentum effect in stocks’ returns between the rational
and the behavioural financial theories: Proposition of the progressive rationality.
ANNEXURE
QUESTIONNAIRE
1. Name: .
2. Gender: a) Male b) Female
3. Age: a) 18-29 b) 30-40 c) 41-50 d) Above 50 years
4. Qualification:
a) Employed b) Professional c) Self-employed d) Others
5. Income Group:
a) Below Rs.25,000 b) Rs.25000-35,000 c) Rs.35,000-40,000
d) Above Rs.45,000
6. Do you have regular habit of saving income?
a) Yes b) Not Regular c) No
7. How much percentage of your income is saved in a month?
a) Below 10% b) 10 – 20% c) 20 – 30% d) 30% and above
8. Tick the reasons for saving and investment?
a) To meet emergencies b) Protection c) To meet future needs d) Education
e) Wealth Maximization
9. How long have you been investing/ saving?
a) Below 2 years b) 2 – 5 years c) 5 – 10 years d) Above 10 years
10. State the type of risk desired by you?
a) Low Risk b) Medium Risk c) High Risk
11. What is the expected return from your investment against the risk undertaken
by you?
a) High return b) Medium return c) Less return
12. State the expected rate of return per annum
a) Less than 12% b) 12 - 24% c) 24 - 36% d) 36% and Above
13. How long can you wait to convert you investment into cash?
a) Less than a month b) Less than 6 months c) Less than a year d) More than
a year
14. Where do you get feedback/information to decide on investments?
66
II. Gold
III. SIP
IV. Mutual Fund
V. Bond
21. Which sector is the best ranking for investment in share market by you?
1 2 2 4 5
Automobile
Bank
Energy
FMCG
67
Financial
services
IT
Metal
Media
Pharma
Realty
Lack of
political
stability
Changing
trends
68
Natural
disasters
Recession
24. Do you think Global economic conditions affect your return on investment?
a) Yes b) No c) Maybe
25. Do you find control mechanisms effective in regulating investments in India (SEBI &
RBI)