This action might not be possible to undo. Are you sure you want to continue?
“STUDY ON PORTFOLIO MANAGEMENT SERVICES STRATEGIES AND INVESTORS AWARENESS AND PREFRENCE FOR IT”
Submitted in partial fulfillment of the requirements for the degree of Post Graduate Diploma in Management (Marketing) By
(Roll No.C2-56) Under the guidance of
A Study Conducted for MOTILAL OSWAL SECURITIES LTD.
At Indira School of Business Studies, Tathawade, Pune 411033
“Words express everythingS Mouth Co-ordinates, When it comes to gratitude, Heart comes to play”
Every project is a masterpiece of hard work and sincere efforts of all those who are Involved in the project. Hard work and success are the two sides of the same coin. I am grateful to all of them who were a part of my hard work and would definitely be an inevitable part of my success. I am grateful to my respected internal guide Mr. Abhijeet Goutri (Indira School of business studies,pune) as well as external guide Mr. Viraj shah and Mr. Manish Gathani (Motilal oswal securities Ltd. Pune) for guiding and inspiring me and taking me through my tough times. They played an important role in the successful completion of my project. As I conclude, I would like to state that just as a positive attitude pays off; my hard efforts to bring this project to a successful end would also pay off. I hope that this project would be one of the most significant stepping-stones of my career and would fulfill my aspirations in every aspect.
Mr. Nipun Triwadi
Indira school of business studies,Pune
INTRODUCTION TO PMS
In today's complex financial environment, investors have unique needs which are derived from their risk appetite and financial goals. But regardless of this, every investor seeks to maximize his returns on investments without capital erosion. While there are many investment avenues such as fixed deposits, income funds, bonds, equities etc…
It is a proven fact that Equities as an asset class typically tend to outperform all other asset classes overthe long run. Investing in equities, require knowledge, time and a right mind-set. Equity as an asset class also requires constant monitoring may not be possible for you to give the necessary time, given your other commitments. We recognize this, and manage your investments professionally to achieve specific investment objectives and not to forget, relieving you from the day to day hassles which investment require.
Motilal Oswal Securities Ltd brings with more than 2 decades of experience & expertise in equity research and stock broking. We are one of the leading portfolio service providers, with asset under management worth Rs. 590 Crores. When you invest through our PMS, you can be assured of the best research being used for the investment decisions. Our equity research has been consistently ranked very highly in surveys conducted by leading international publications like “Asia Money” and “Institutional Investor”.
It is well evident that work experience is an indispensable part of every professional course. In the same manner practical training is must for each and every individual who is undergoing management course. Without the practical exposure one cannot consider himself or herself as a qualified capable manager. During the project period student can learn through his own experience, the real situation of market and corporate world and to put his theoretical knowledge into practice. Hence to fulfill the requirement, I have completed my Two Months Internship in Motilal Oswal Securities Ltd. on the topic , “STUDY ON PORTFOLIO MANAGEMENT SERVICES STRATEGIES AND INVESTORS AWARENESS AND PREFRENCE FOR IT”
Being new to the Stock Market, I was engrossed fully into the sector where I was told to understand the basics of stock market, the effect of recession on this sector, I was told to educate various sub brokers operating in Pune about the benefits of the Products being offered by Motilal Oswal, and how this opportunity can profit both the parties. I also did a survey for extracting information from brokers, which would be helpful for the company to find out awareness and preference of Portfolio management services.
I was told to make calls and generate the franchisees for the company. Some time I have to extract the information from my sources because no one is they’re waiting for you it’s actually you, which have to make things happen in your favor. So I read articles brochures pamphlets in my free time there. Every day have its own experience and a short-term goal. So I adopted the line that let the dreams of today determine the opportunities of tomorrow and I inculcated the same positive attitude in to me so that I would work there effectively and efficiently.
OVERVIEW OF INDUSTRY
1.1 Broking Industry Insight
The equity brokerage industry in India is one of the oldest in the Asia region. India had an active stock market for about 150 years that played a significant role in developing risk markets as also promoting enterprise and supporting the growth of industry. The working of stock exchanges in India started in 1875. BSE is the oldest stock market in India. The history of Indian stock trading starts with 318 persons taking membership in Native Share and Stock Brokers Association, which we now know by the name Bombay Stock Exchange or BSE in short. In 1965, BSE got permanent recognition from the Government of India. National Stock Exchange comes second tom BSE in terms of popular.
Stock trading is a big business in any way and in any standards. With daily volumes of Rs1200015000 crore (on the BSE and NSE) in the cash segment and a volume of about Rs 30,000 – 35,000 crore in the derivative market, the size of the industry is around Rs 5,000 crore per annum in terms of broking revenues. Meanwhile the trading business too is booming. BSE and NSE represent themselves as synonyms of Indian stock market. The history of Indian stock market is almost the same as the history of BSE. The current "stock market" is comprised of 300,000 computers situated on pro trader's desks. These computers are networked together using sophisticated protocols. This level of information sharing makes pricing an almost exact science.
These 300,000 computers are further linked to another 26 million computers worldwide. These computers are located in banks, small businesses, and large corporations. These computers comprise the banking networks, which make computerized transactions possible. Finally, these computers are connected to another 300 million+ computers, which connect and disconnect from the financial markets daily. In New York City alone, these transactions amount to over $2.2 trillion dollars daily. Sensex crossed the 5000 mark in 1999 and the 6000 mark in 2000. The 7000 mark was crossed in June and the 8000 mark on September 8 in 2005 and by 2007 It has already seen mark 14500. Many foreign institutional investors (FII) are investing in India. The liberal economic policies pursued by successive Governments attracted foreign institutional investors to a large scale. The unpredictable behavior of the market gave it a tag – ‘a volatile market.’India, after United States hosts the largest number of listed companies. Global investors now ardently seek India as their preferred location for investment.
Following the recommendations of the High Powered Study Group on Establishment of New Stock Exchanges. greater transparency in price discovery and process driven operations that had significant bearing on further growth of the stock markets in India. The Securities and Exchange Board of India (SEBI). several measures were taken to streamline the processes and systems including setting up an efficient market infrastructure to enable Indian finance to grow further and mature. The early 1980s witnessed another surge in stock markets when major companies such as Reliance accessed equity markets for resource mobilisation that evinced huge interest from retail investors. the first of such stock exchanges in India. with the introduction of Foreign Exchange Regulation Act (FERA) that led to divestment of foreign equity by the multinational companies. As a part of the reform process. 1992. The importance of an efficient micro market infrastructure came into focus following the incidence of market abuses in securities and banking markets in 1991 and 2001 that led to extensive investigations by two respective Joint Parliamentary Committees. electronic trading. NSE was incorporated in Nov 1992 as a tax paying company. was given statutory powers with the enactment of the SEBI Act. which created a surge in retail investing. being run on no-profit basis. It commenced operations in wholesale debt segment in Jun 1994 and capital market segment (equities) in Nov 1994. it became imperative to strengthen the role of the capital markets that could play an important role in efficient mobilization and allocation of financial resources to the real economy. The setting up of the National Stock Exchange brought to Indian capital markets several innovations and modern practices and procedures such as nationwide trading network. The broad objectives of the SEBI include · to protect the interests of the investors in securities · to promote the development of securities markets and to regulate the securities markets The scope and functioning of the SEBI has greatly expanded with the rapid growth of securities markets in India in the last fifteen years. the National Stock Exchange of India (NSE) was promoted by financial institutions with an aim to provide access to investors all over the country. NSE was recognized as a stock exchange under the Securities Contracts (Regulations) Act 1956 in Apr 1993. Beginning of a New Equity Culture A new phase in the Indian stock markets began in the 1970s. A new set of economic and financial sector reforms that began in the early 1990s gave further impetus to the growth of the stock markets in India. Towards this end. . since stock exchanges earlier were trusts. which was set up in 1988 as an administrative arrangement.
Subsequently. The stock market capitalization in mid-2007 is nearly the same size as that of the gross domestic product as compared to about 25 percent of the latter in the early 2000s.Faster and efficient securities settlement system is an important ingredient of a successful stock market. commenced operations in Oct 1996. The demutualization and corporatization of all stock exchanges is nearing completion and the boards of the stock exchanges now have majority of independent directors. Foreign institutional investment in Indian stock markets showed continuous rise reaching about USD10 bn in each of these years between FY04 to FY06. Risk management became robust reducing the recurrence of payment defaults. Within five years of introduction of derivatives. Electronic trading. While NYSE Group led consortium took stake in the National Stock Exchange. Regulations governing selection of various types of market intermediaries as depository participations were made. Indian stock markets are transaction intensive and thus rank among the top five markets in this regard. Product expansion took place in a speedy manner. Stock exchange reforms brought in professional management separating conflicts of interest between brokers as owners of the exchanges and traders/dealers. The value of share trading witnessed a sharp jump too. Deutsche Borse and Singapore Stock Exchange bought equity in the Bombay Stock Exchange Ltd. Rapid Growth The last decade has been exceptionally good for the stock markets in India. digital certification. To speed the securities settlement process. Indian stock markets now are ranked first in stock futures and fourth in index futures. opportunities in trading of derivatives in futures and options in index and stocks. . Investor base continued to grow from domestic and international markets. in addition to trading in equities. Central Depository Services (India) Limited promoted by Bombay Stock Exchange and other financial institutions came into being. straight through processing. online broking have emerged as major trends in technology. ETFs are showing gradual growth. The National Securities Depository Limited (NSDL) set up by leading financial institutions. stock markets in India have showed phenomenal growth in the early 1990s. electronic contract notes. giving little scope for manual intervention that has been the source of market abuse in the past. In the back of wide ranging reforms in regulation and market practice as also the growing participation of foreign institutional investment. The Depositories Act 1996 was passed that allowed for dematerialization (and re-materialization) of securities in depositories and the transfer of securities through electronic book entry. Foreign institutions took stake in India’s two leading domestic stock exchanges. Indian equity markets now offer. Stock markets became intensely technology and process driven.
most probably commodities futures. The recent past witnessed several leading brokerage firms accessing capital markets for financial resources with success. offers portfolio management services. thus making research important brand equity for the brokerage firms.1.2 Major Developments in Equity Brokerage Industry in India i) Corporate memberships There is a growing surge of corporate memberships (92% in NSE and 75% in BSE). exchange traded funds. corporate nature of the memberships is enabling broking firms to expand the realm of their operations into other exchanges as also other product offerings. important opportunity to access capital markets for resource mobilization has become available. and some even go to the extent of creating niche services such as a brokerage firm offering art advisory services. iii) Greater reliance on research Client advising in India has graduated from personal insights. A typical brokerage firm today offers trading in equities and derivatives. brokerage firms face limitations in raising financial resources for business and expansion. consumptions and other related loans. market tips to becoming extensively research oriented and governed by fundamentals and technical factors. . iv) Accessing equity capital markets Access to reliable financial resources has been one of the major constraints faced by the equity brokerage industry in India since long. The research and advice are made online giving ready and real time access to market research for investors and clients. Since the banking system is not fully integrated with the securities markets. Vast progress has been made in developing company research and refining methods in technical and fundamental analysis. distributes mutual funds and insurance and also offers personal loans for housing. With proliferation of new markets and products. and the scope of functioning of the brokerage firms has transformed from that of being a family run business to that of professional organized function that lays greater emphasis on observance of market principles and best practices. With buoyancy of the stock markets and the rising prospects of several wellorganized broking firms. ii) Wider product offerings The product offerings of brokerage firms today go much beyond the traditional trading of equities.
vii) Online broking Several brokers are extending benefits of online trading through creation of separate windows. money and resources to create efficient and effective compliance and reporting systems that will help them in avoiding costly mistakes and possible market abuses. Many brokerage firms are investing time.v) Foreign collaborations and joint ventures The way the brokerage industry is run and the manner in which several of them pursued growth and development attracted foreign financial institutions and investment banks to buy stakes in domestic brokerage firms. Keen competition has emerged in online broking services. arbitrage trading. and providing complete range of research and other support to back up this function. Some others have dedicated online broking portals. with some of these offering trading services at the cost of a few basis points or costs. A wide range of incentives is being created and offered by online brokerage firms to attract larger number of clients. investing in small cap stocks etc. which might lead to creating of greater interest in investing in brokerage firms by entities in India and abroad. broking industry is giving greater emphasis on regulatory compliance and observance of market principles and codes of conduct. which are fixed in nature irrespective of the volume of trading conducted. there are some which are creating niche services that attract a particular client group such as day traders. Foreign firms picked up stake in some of the leading brokerage firms. it becomes imperative for the broking firms to keep their staff continuously updated with latest development in practices and procedures. With the nature of markets and products becoming more complex. . vi) Specialized services/niche broking While supermarkets approach are adopted in general by broking firms. ix) Focus on training and skill sets Brokerage firms are giving importance and significance to aspects such as training on skill sets that could prove to be beneficial in the long run. paving the way for stronger brokerage entities and possible scope for consolidation in the future. Emergence of online broking enabled reduction in transaction costs and costs of trading. viii) Compliance oriented With stringent regulatory norms in operation.
Resulting in a compensation for the reduced fees. There’s a limit on the same as 8-10 times depending upon the broking house and the reputation of the client in the market. The client gets an advantage and wishes for more and more intraday sell and purchases. This helps in reducing the deviations from the set guidelines and results in fast and secure transactions. • Adoption of technology: Earlier most of broking houses used simple connection to connect to the BSE/NSE or the Main Broker. .4 Market Analysis of Broking Business Buyer Power Lack of Expertise Curtails Bargaining Power Knowledge of the industry in which one is working is very important without knowledge one cannot even think of growing in the market. 1. secure and fast. equality and effectiveness are observed even in the remotest franchisee of the firm. • Centralized operations: The Back office is no more a setup in broking houses it’s all webbased having its roots at the registered office of the firm.1.3 Growth Driver of Equity market The major growth drivers for brokerage revenue and trading volume are:- • Continuous fall in brokerage fees: This is happening due more and more interest of people in broking and huge competition in the market. Retail investors often lack the knowledge and expertise in the financial sector that calls them to approach the broking houses. Hence. But. which have complete a research reports and market updates in order to guide the investor decision and to create wealth. Knowledge is the only thing in this which cannot be Sold. purchased or stolen it can only be gained by experience. these days many have started using V-SAT technology which is highly advanced. Many Broking houses are reducing their brokerage in order increase the volumes of trading/jobbing intra-day and gross. more control. studying or through a seniors advice.
Low Product Differentiation Proves Beneficial The retail broking services provided by the various companies are homogeneous with very low product differentiation. · Threat of Substitutes · Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices etc act as substitutes to retail broking products and service . Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumer’s growing preference for internet as compared to approaching the brokers. The only difference widely observed is either the Brand of the broking or the support which he provides apart from usual share trading. This can be taken as positive note from the view of the whole industry. This allows customers to enjoy a greater bargaining power. dematerialization etc are strengthening the retail brokerage market and attracting foreign companies to enter the Indian industry. since it is growing so more and more people are willing to be a part of it as well as a negative note from the view of broking houses. · Threat of New Entrants · Entry of Foreign Players New forms of trading including T+2 settlement system. since it will increase competition in the market. Intensity of Competition Move towards consolidation Lot of brokerage companies is moving towards consolidation with the smaller ones becoming either franchisees for the larger brokers or closing operations. Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail brokerage industry.
(www.kotaksecurities.com)s ✔ Karvy (www.investsmartindia.com) ✔ India Info line (www.com) ✔ Fortis Securities (Religare) (www.karvy.com) ✔ India bulls Financial Services Limited (www.5paisa.hdfcsec. (www.5 Major Players in the Industry ✔ ICICI Securities Ltd.motilaloswal.sharekhan.1.com) ✔ Motilal Oswal Securities (www.icicidirect. (www.com) .com) ✔ SSKI Ltd.com) ✔ IL&FS invest mart Limited (www.fortissecurities.com) ✔ HDFC Securities (www.indiabulls.com) ✔ Kotak Securities Ltd.
Through this project. .INTRODUCTION TO THE PROJECT Being a reputed company in the business it is of utmost importance for Motilal Oswal to be aware of what is going on in the market. The project revolves around the whole financial market business. So. an effort towards understanding and throwing more light on every aspect related to the business has been undertaken. The project had two market research parts ➢ Market survey of the prospective sub-brokers ➢ Investors Awareness of Portfolio Management System Besides that the marketing strategies used by other companies in same business was studied and suggestions were drawn to develop an effective strategy. Not only that. It will surely help Motilal Oswal in getting a detailed insight into the business and developing marketing strategy in such a way that most can be reaped from the market of franchisee integration. to cover all these areas a detailed analysis of all this aspects has been done. what is expected of them and how are they performing and do they need any improvements. it was tried to give the business a new dimension in terms of approaching the sub-broker to generate leads which may in turn help in getting larger market share.
They not only eat up the market share but also degrade the service level required for this type of job and hence degrade the market as a whole. and communication strategy is required . ➢ Focus the existing marketing team at right market – The lack of understanding of the market wastes a lot of effort of the sales team. lead generation. Through this project I have tried to develop a structured view of the market which will not only help in understand the whole market but also help in targeting the marketing force at the right places to get more business ➢ Same array of products – Almost all the companies in the market are pitching in same array of products and hence this causes more problems as the unprofessional players are able to provide the integration at less cost. So. ➢ Innovation in approach required – With all these problems.2. it becomes of utmost importance for a company to innovate to reach at the top. But if there was a proper understand the requirement of each type of market segment the sales team may pitch in right mix of products to the right prospective clients. The business is generated through cold calls right now.1The Need for This Project ➢ No study has been done on this business so far – So far no study has been done regarding this business in Pune. ➢ Lot of small players cropping up – It always creates a problem when the market starts getting congested. Same is the case with the market of financial business. ➢ Lack of understanding of the need of the business houses – Since no segmentation study has been done the specific needs of different companies are not known. so a detailed study of the market is required to understand it properly. So anyone who is able to get a supply of the major financial techniques and senses required for setting up franchisee integration jumps into the business with a team of local people. innovation in terms of products.
To explore the investors preferences towards Portfolio Management Services. ➢ Lack of understanding of the satisfaction of existing customers – It always pays to introspect oneself.2 Objectives of the project To study different strategies of PORTFOLIO MANAGEMENT SERVICES of MOTILAL OSWAL SECURITIES LTD. what are the innovations going around in the market. Providing data driven decision for customer acquisition. Analyzing broking market potential. . 2.➢ No idea of the position of the competitors – The companies doesn’t have any idea what the other companies in the same business are doing to generate more business. Understanding the process of marketing research suitable for B2B environment. But so far no formal study in this regard has been undertaken so we don’t know how we have performed so far. Understanding the B2B marketing environment.
This kind of exercise will not only help the company in focusing its marketing activity to the right kind of business enterprises but will also help in designing right mix of strategy to cater to the needs of sub-brokers in the best way possible. So. The project also aimed at segmenting the market and understanding the individual needs of each market segment. ➢ It is also possible that some people might have given false or misleading information. These can be summed up under the following points --➢ The sample taken for this research might not represent the whole population. consultancy. And last but not the least in order to make the summer internship program more fruitful in terms of academic learning. this study will help the company in gaining an insight into the innovations that are being done by other companies in the same kind of business. It is always wise to keep a track of what the competitor proposes to do in future as it alarms the market leader to be geared for the future. It was also aimed to study the level of satisfaction among the existing sub-brokers of the competitor company and gather their feedback to see what more the clients expect in terms of products.2. ➢ Many people doubted the fact that the information given by them would be kept strictly confidential. a complete analysis of the functioning of the franchisee integration business was done along with the organizational structure and other minor details. .4 Limitations of the project Although the project aims at making an in-depth market research but there are some practical limitations regarding the methodology followed & the overall procedure. ➢ Since the survey is conducted exclusively on individual the personal view of the respondent may make lead to some biasness in the results. 2. return on investment and innovation. ➢ Some people do not want to give correct details required in the questionnaire.3 Scope of the project The project focuses at understanding the existing forces that determine the acquiring of a solution like Customer Model Integration. Through this project we have been able to reach at a certain number of factors that are the main deciding factors that are taken under consideration by the companies while purchasing integration products.
➢ Many companies and customers do not wish to give out information which leads to incomplete responses. ➢ Many people gave unauthentic information to hide their ignorance. . ➢ Many companies didn’t respond properly and mentioned that decisions regarding these issues are taken by their head offices.➢ Many big companies do not respond to such market research.
Starcom Mediavest Survey · Introduces a separate brand for Private Client Group – Purple · Motilal Oswal Commodities Broker Pvt Ltd (MOCBPL) bagges Globoil India's prestigious 'Outstanding Commodity Broking House 2007' Award · Motilal Oswal Financial Services ltd.EZtrade . spread over 26.000 sq ft in Malad.reaches an important milestone i. · Motilal Oswal Financial Services Ltd files RHP with SEBI for an IPO · Motilal Oswal Financial Services Ltd. to provide reliable & honest investment advice to investors’. Mumbai · Motilal Oswal's India Business Excellence Fund raised USD 125 million. Raamdeo Agrawal met each other as students in a Mumbai suburban hostel in the early eighties.Chairman and Managing Director has been appointed as a member of the Managing Committee of Indian Merchant Chambers. MOSL alliance with IDBI Bank to offer Online Trading Services 2007 · The Strategic partnership between MOSL and SBI .000 customers · Starts Knowledge First campaign · Motilal Oswal was perceived as the most Research driven stock trading player . when Mr. enters 'Limca Book of Records' for creating India's largest dealing room in Mumbai · MOSL was 'Rated No. Motilal Oswal . Both the young chartered accountants hailing from a rural & an unpretentious background had a common dream ’to build a professional organization with strong value systems.CNBC TV 18 IT User Award – 2008 · MOSL awarded 'The Best Franchisor in Financial Services' by Franchisee World Magazine 2008 for the second consecutive year · MOSL creates one of India's largest Equity Dealing & Advisory rooms.MOSl HISTORY AND MILESTONE The story of MOSl goes back many years. Thus was born their first enterprise called "Prudential Portfolio Services" in 1987. 25% higher than the initial target of USD 100 million · D & B survey rates MOSL as India's top Broking House in terms of total number of trading terminals. gets listed on the BSE & NSE · Mr.1 – Best recommendations Mid & Small Caps' and won awards in 3 out of 4 categories at the Starmine India Broker Rankings 2009 from Thomson Reuters 2008 · MOSL awarded the prestigious Nasscom . In less than a year it has managed to sign up more than 10. features as a case study in Harvard Business School . Motilal Oswal and Mr.e. 2009 Motilal Oswal Securities Ltd.
· 2006 · Motilal Oswal Financial Services Ltd ties-up with State Bank of India to offer online trading.New Vernon Private Equity Limited and Bessemer Venture Partners. · Employee base crosses 2000 and Business Associate base crosses 780. serving over 200. Also acquires 1 more brokerage firms in UP.48% with two leading private equity investors . · AsiaMoney Brokers poll 2006 rates Motilal Oswal Securities – Most Independent ResearchLocal Brokerage · Introduces unique 1 paisa trading scheme for online Derivatives trading · Launches the India Business Excellence Fund (IBEF). · Value PMS gives 390% returns to its investors between Feb 2003 and March 2006. · Acquires a leading south Indian brokerage firm . · Places 9. · Another milestone in distribution – 1160 Business locations.000 customers. · Motilal Oswal Financial Services Ltd was declared as the Best Research House for Indian Stocks in 2006 as per AQ Research. a US$ 100 mn India focused Private Equity Fund. · Investment banking business advises Aban in their majority controlling stake of Sinvest ASA – one of the largest investment banking deals of 2006. · Issues about 13% of company’s equity to employees as ESOPs. over 360 cities.Peninsular Capital Markets. . · Enters Private Equity and Investment Banking businesses.
SERVICES PROVIDED BY MOSL .
· MOSL is providing different kind of services under its Broking and Distribution Services to its clients. They are as follows. · Advised based Broking on BSE / NSE ( Cash & Derivatives ) · Portfolio Management Services ( PMS ) · Internet Trading ( E Broking ) · Timely & Researched based Investment and Trading Ideas · Depository Services ( MODES ) · Advised based Mutual Fund · Commodities · IPO .
Portfolio Management Service .
INTRODUCTION TO PORTFOLIO MANAGEMENT SERVICE · What is PMS? The full Name of PMS is Portfolio Management Service. Idea identification. the portfolio manager handles the responsibility of creating and tracking the portfolio. I have tried my luck in the stock market and realized that through I understand the market to some extend but is not enough to keep coming with winning investment. settlement and performance reporting is all assumed by the PMS provider. · Why PMS? · Investor’s Dilemma · I have the money & desire to make money · Now I know or I already knew equity is a good instrument for creating wealth but · My Busy Schedule does not allow me to have time to study and identify the right stocks · Sometimes. . PMS is for an investor who doesn’t have the time and expertise to manage his portfolio. order execution. The client derives the benefit of the professional and experience of the Portfolio Manager. In PMS. Portfolio Management Service (PMS) is a product wherein a customized investment portfolio is created to suit the investment objectives of a client.
DIFFERENT KIND OF PMS There are three kinds of PMS provided by Motilal Oswal Securities Ltd. They are as followed · Value Strategy PMS · Bull’s Eye Strategy PMS · Trillion Dollar Opportunity Strategy PMS These all PMS have their different features. They all are descriptive as under. .
but across the globe. The whole stock selection process is geared to find investment ideas with a sufficient margin of safety. the founder-director of Motilal Oswal Securities Ltd. there is no guarantee of positive returns. .a. At Inquire. suppliers and competitors. Settlement will be done by their trained personnel who will ensure that all administrative matters are expeditiously handled and reconciled. we very clearly understand the difference between value and price. Agrawal believes in low portfolio churn and a high “margin of safety” investment philosophy for long term and sustainable wealth creation. Motilal Oswal (MOSl) has a highly satisfied client base both on the Institutional side as well as on the retail side of High Net worth Individuals and Franchisees’. Raamdeo Agrawal.a. MOSL’s primary objective is preservation of capital and prevention of any significant permanent capital loss. you may choose an external custodian with whom we will liaise on your behalf. They will handle your Banking (in a special bank account under POA from you) and trade. with clients not only in India. banking and settlements MOSL has its own depository service Motilal Oswal Depository Services. MOSL’s in house depository will facilitate MOSL as acting as custodians and present you a completely hassle free custody. compounded over the last five years on a substantial size. so that even a mediocre sale will fetch good returns. MOSl’s own portfolio. Mr. In fact. Their own depository will act as your custodian for a nominal custody fee. Alternatively. For hassle free custody. The Value PMS has been running successfully since February 2003. It is this success that makes us confident of handling funds management for external clients. Their goal will be to do better than this. This process involves understanding the business dynamics through a continuous interaction with company managements. handled by Ramdeo Agrawal has delivered a return of 30% p. This approach can be termed as conservative. and a very well respected investor among the Indian Investor Community. for the next three to five years.. However.VALUE PMS Value PMS is a scheme meant for investors with a Long Term investment horizon in the Indian Equity Markets the money management team is headed by Mr. Our teams of Analysts follow a thorough research process. it is this dedication and processes that have won us international acclaim like Asia Money 2000 Brokers Poll award. This has been possible because of a strong equity research team (Inquire) completely focused on identifying wealth creating companies. They expect that the stock market will give a return of 15% p.
as they strongly believe that it will align the interests of the firm and the client. These aspects would not be available to you in a mutual fund. · Reason of Performance Fee: The base asset management fee being charged is much lower than that charged by others. and that is to cover their running costs. How it is different from Mutual Fund? MOSl PMS offers you a unique combination of equity expertise and personalized service. They have consciously kept MOSL fee more performance linked. Importantly. · Who can Sign Up? The following categories are eligible as per SEBI’s rules.I. It is a little known fact that high turnover takes away a major part of investment returns. Bank and DP Statements.R.Thus you will only have to monitor the portfolio performance through periodic reports from the company side. All administrative matters will be off your shoulders. · Monthly Transaction Statements. They have a stated objective to keep the churn very low. · You can expect the following from MOSL · Monthly Portfolio Statements including Portfolio Performance Report. MOSL’s fee is significantly lower than the basic management fee levied by a mutual fund (preperformance management fee). · Quarterly meetings with Mr. · Individuals · HUFs · Companies · N. You can monitor the portfolio turnover. Ramdeo Agrawal your portfolio manager Reports on tax status of the portfolio before the advance tax due dates. . Your portfolio will be constructed to meet your investment goals at a given level of risk.
25% 0. · Fee Structure : One time upfront Fee 0. Brokerage Rate will be as applicable.Nil Service Tax.75% 1. Depositary Charge -As Applicable Registrar and Transfer Fees.25% Performance Based Management Fees Nil 10% Profit Sharing on Higher Water Marking Basis Nil Exit Load Exit Between 0-12 months 2. Security Transaction Tax and other Statutory Levels -As Applicable .50% 100 Lakhs and above 2.50% Rs 25 Lakhs To Rs100 Lakhs 2.02% Brokerage The Portfolio manager will have discretion to appoint any brokers to execute the transaction for Portfolio management scheme.FEATURES OF VALUE PMS · Scheme : Minimum Portfolio Size: Rs.00% Exit after 12 months Nil Custodian Fees .50% Fixed Management Fees Assets Under Management Per Annum Per Annum Per Annum >25 Lakhs 2.0. 10 Lakhs cash or approved securities per individual or group.
for which there is a substantial appetite. Those who have knowledge of the stock market but lack the discipline to book profits when the going is good or sit on cash when market looks overheated and cannot track when the stock has run ahead of its fundamentals in the short term are the ideal investors who should invest in Bull’s Eye. Idle cash will be invested in liquid mutual funds for the short term. but also would like to take advantage of short to medium term rallies. will be invested in MOST researched ideas both large cap & mid cap. Investors who not only want steady returns irrespective of market volatility. returns can be substantially better. Bull’s Eye is launched to fill in this Gap It is to invest in stocks with a time frame of 1-6 months. we give flexibility to the investor to join at Rs. Though the minimum signing amount is Rs. with higher weight age per stock. The scheme aims to deliver 15-20% returns in Volatile Markets. Booking profits regularly and ability to sit on cash are the key salient features of Bulls Eye PMS. . so as to participate and capture sharp rallies. Majority of the corpus. The whole idea is to minimize the risk by timing the stock selection. for a minimum 15. 50 Lakhs. especially when there is no one-sided trend.BULL’S EYE PMS Bulls Eye is the second product under the AMC. In a trended bull market. It is a short to medium term investment product. A lower weight will be assigned to stocks where we may not have in-house coverage. Technical would be used to TIME the fundamental ideas. and also to pick momentum based ideas where there is no in-depth fundamental coverage. 25 Lakhs & then scale up based on his comfort & overall performance.20% move. Hence.
Bull’s Eye strategy to better returns . now famous. we resort to technical analysis. we employ similar strategy while exiting the stock and this completes our hunt for good returns. Unfortunately. It’s about identifying the right stocks. Stock Market is one place where you can outdo all other investmentinstruments. I love the action and whatever everybody may say. picking and exiting at the right times and then continuing the cycle. Our. Here is the investment strategy we employ to generate desired returns through our Bull’s Eye PMS scheme. the age of our investment in it may depend on the reality based on technical research along with the prevailing market conditions (markets are overheated. read the market condition and pick up the stocks in opportune sectors. selling at the right time is equally important. We believe Investing = Hunting. All one needs is in-depth understanding of the markets and the company oneinvests in right entry levels and profitable exit points. Wealth Creation Studies have proved that there aren’t even 100 companies out of the 6000 listed on exchanges that create wealth for its investors during the five year periods. . We believe that apart from the right entry levels. over expectations build-up etc). who invests my money in fundamentally strong companies. Duration of the investment is one to six months. So the task of picking the right stocks is more difficult than most of us can imagine.· For Whom The mind of a successful and a busy investor” There is so much action in the markets nowadays. which my busy schedule doesn’t allow. So even while a stock may look fundamentally strong. Can I get a good portfolio manager who can take my funds and invest them intelligently in equities? Someone. . take advantage of volatile markets and book profits regularly keeping marketconditions in mind. · Determining Entry and Exit Points: After identifying the companies for investment. This allows us to pick the wheat from the chaff. There have been so many times when I felt like encasings my large unrealized gains but got swayed by my Greed. Therefore. all this requires time to study. ." Its time you hit the Bull’s Eye with Motilal Oswal Securities Limited. Moderate risk is the key philosophy: We take moderate risk while making any investment. Identifying theright stocks: Our strong proven Fundamental Analysis skill allows us to understand the profile and the performance of various companies.
25% Brokerage The Portfolio manager will have discretion to appoint any brokers to execute the transaction for Portfolio management scheme.2. · Fee Structure One time upfront Fee 0. 25 Lakhs cash or approved securities per individual or group.50% Fixed Management Fees Assets Under Management Per Annum Per >25 Lakhs 2.75% Rs 25 Lakhs To Rs100 Lakhs 2. Depositary Charge. Brokerage Rate will be as applicable. SecurityTransaction Tax and other Statutory Levels As Applicable .FEATURES OF BULL ’S EYE PMS · Scheme : Minimum Portfolio Size: Rs.As Applicable Registrar and Transfer Fees Nil Service Tax.75% Performance Based Management Fees Nil 10% Profit Sharing on Higher Water Marking Basis Exit Load Exit Between 0-12 months .00% Exit after 12 months Nil Custodian Fees -0.50% 100 Lakhs and above 0.
. The Portfolio would attempt to identify emerging themes early and exit when these when they are fairly discounted. Perception Rerating happens due to: Increased Sales volume Consistent Growth Better Margins Growing stakeholders’ confidence The Product aims to deliver superior returns by investing in Small & Mid cap ideas that are part of the next Trillion Dollar GDP growth opportunity. The investment philosophy is to invest in stocks which are available at reasonable valuations and promise more than average growth. For any stock to get recognized by the Market and get a desired Valuation one has to wait for the right “Trigger Point”. We firmly believes that markets rewards consistent growth over a period of time and only after critical size has been achieved by the company. The portfolio would aim to identify emerging themes.TRILLION DOLLAR OPPORTUNITY STRATEGY PMS The portfolio is designed to invest in themes /stocks in the small and mid cap segment which are going to be a part the “NEXT TRILLION DOLLAR GDP GROWTH”. The Portfolio would target to invest in Small & Mid Cap Opportunities which have the potential of delivering aboveaverage growth over the next 2-3 years.
Long term (2 to 3 Yrs) · Benchmark: .· Portfolio Characteristic: · Investments in Small and Mid-cap Stocks · Bottom Up Stock Picking Approach · Focused Theme Portfolio · Investment Horizon . · Monthly portfolio statement specifying portfolio of the investor and gain and loss. · Motilal Oswal Securities provides the following reports to the investors to keep them appraised with their portfolio performance. · Monthly transaction statements.CNX Mid Cap · Buy and Hold Philosophy – low portfolio churn · Open Ended Portfolio with Exit Fee · Quarterly Disclosure Of Portfolio Investment Philosophy and Strategy · High Growth Story: Sector and Companies which promise a higher than average growth. · Who can Sign in? .Proprietorship firms · HUF’s · Partnership firms · Registered societies · Registered trusts · Corporate . · Yearly portfolio statement certified by a CA. · Wealth is created by sitting. · Reasonable Valuation: Invest in high growth companies at reasonable price / value · Emerging Themes: Focus on Identifying Emerging Stocks / Sectors · Buy & Hold Strategy: The Portfolio shall focus on above philosophies and hold them till it realizes it true market potential. · Reports provided to investors .
· Engaging in securities lending is subject to risks related to fluctuations in collateral value/settlement/liquidity/ counter party. Consequently. the NAV of the portfolio may be subject to fluctuation. liquidity and settlement system in equity and debt market. changes in the market place and industry specific and macro economic factors. NAV of the portfolio can go up or down depending upon the factors and forces affecting the capital markets. · Following are t he risk factors as perceived by management: · Investment in equities. · Investment in debt instrument and other fixed income securities are subject to default risk. it could depreciate to an unpredictable extent. derivatives and mutual funds are subject to market risks and there is no assurance or guarantee that the objective of the scheme will be achieved. . The performance of the schemes may be affected by changes in government policies.RISK FACTOR The investment made in the securities are subject to market risk and there is no assuranceof guarantee that the value of or return on the investment made will always appreciate. · The scheme may invest in non-publicly offered debt securities and unlisted equities. · Investment in debt instruments are subject to reinvestment risk as interest rates prevailing on interest amount of maturity due dates may differ from the original coupon of the bond. This may expose the scheme to liquidity risk. · The names of the schemes do not in any manner indicate their prospect or returns. The performance in the equity scheme may be adversely affected by the performance of individual companies. · The past performance of the portfolio manager does not indicate the future performance of the same Scheme in future or any guaranteed returns through these schemes. which might result in the proceeds being invested at a lower rate. general levels of interest rates and risk associated with trading volumes. As with any investment in securities. liquidity risk and interest rate risk.
TYPES OF ANALYSIS There are main two types of analysis which are used for selecting Portfolio. The use of past performance should come as no surprise. It is a technique many people attempt. Technical analysts do not attempt to measure a security’s intrinsic value. There are literally hundreds of different patterns and indicators that investors claim to have success with. past prices and volume. instead they look at stock charts for patterns and indicators that will determine a stock’s future performance. trends. · What Is It? Technical analysis is a method of evaluating securities by analyzing statistics generated by market activity. bottoms. patterns and other factors affecting a stock’s price movement and then make buy/sell decisions based on those factors. Technical analysis has become increasingly popular over the past several years. The world of technical analysis is huge today. We have tried to keep this tutorial as short as possible. Our goal is to introduce you to the different types of stock charts and the various technical analysis tools available to investors. as more and more people believe that the historical performance of a stock is a strong indication of future performance. People using fundamental analysis have always looked at the past performance of companies by comparing fiscal data from previous quarters and years to determine future growth. They are as followed · Technical Analysis · Fundamental Analysis TECHNICAL ANALYSIS · Introduction The methods used to analyze and predict the performance of a company’s stock fall into two broad categories: fundamental and technical analysis. The difference lies in the technical analyst’s belief that securities move according to very predictable trends and patterns. . but few are truly successful at it. Those who use technical analysis look for peaks.
30. The most commonly used moving averages are 20. 100 and 200 . past prices and volume. · One of the most basic and easy to use technical analysis indicators is the moving average.These trends continue until something happens to change the trend. · Technical analysis is a terrific tool. · Here are some points to remember about technical analysis: Technical analysis is a method of evaluating securities by analyzing statistics generated by market activity. Think of support/resistance (S/R) as levels that act as a floor or a ceiling to future price movements. .There are many instances of investors successfully trading a security using only their knowledge of the security’s chart. which shows the average value of a security’s price over a period of time. open and close for each particular day. without even understanding what the company does. price levels are predictable. · The advantage of using a bar chart over a straight line graph is that it shows the high. 50. and until this change occurs. low. · Support and resistance levels are price levels at which movement should stop and reverse direction.day. · There are literally hundreds of different price patterns and indicators out there. but it is much more effective when combined with fundamental analysis.
· Always read the notes to the financial statements. and give you the tools you need to decide which companies make worthwhile investments. the financial statements are a gold mine of information. if you know how to read them. · The income statement takes into account some non-cash items such as depreciation. · For a company. expenses. In this tutorial. These two sides must always equal each other (balance). and shareholder’s equity. · Audited financial reports have much more credibility than un-audited ones. it involves looking at historical performance data to estimate the future performance of stocks. they just avoid focusing on it exclusively. Fundamental analysts look at this information to gain insight on a company’s future performance. liabilities. · The balance sheet lists the assets. · The income statement includes figures such as revenue. Also known as quantitative analysis. Financial statement analysis is the biggest part of fundamental analysis. liabilities and all the other financial aspects of a company. we’ll show you how to understand the basics of the financial statements (both quarterly and annual reports). Followers of quantitative analysis want as much data as they can find on revenue. · The cash flow statement is divided into three parts: cash from operations. assets. earnings and earnings per share. It is essential to understand the purpose of each part of these statements and how to interpret them. . · Management discussion give investors a better understanding of what the company does and usually points out some key areas where they did well. They provide more in-depth information on a wide range of figures reported in the three financial statements. · For all balance sheets: Assets = Liabilities + Equity. · The cash flow statement strips away all non-cash items and tells you how much actual money the company generated.FUNDAMENTAL ANALYSIS · Introduction The massive amount of numbers in a company’s financial statement can be bewildering and intimidating to many investors. the top line is the revenue while the bottom line is net income. Financial reports are required by law and are published both quarterly and annually. On the other hand. expenses. One of the most important areas for any investor to look at when researching a company is the financial statements. This doesn’t mean that they ignore the company’s stock price. financing and investing.
respondents are the main source for getting information and secondary data collected from various past surveys. The business research methodology includes the sample size. sampling plans etc. data collection method. · Data Source As I am using here the primary data for research. data source. nature of the study.PRIMARY DATA RESEARCH · Objectives of The Research “STUDY ON PORTFOLIO MANAGEMENT SERVICES STRATEGIES AND INVESTORS AWARENESS AND PREFRENCE FOR IT” · Research Methodology Research methodology is the scientific and general method through which the research objective is conducted. internet and journals · Data Collection For data collection I had used the questionnaire · Sampling Plan Target Population : People of pune City Sample Size : 100 Samples Sampling Method : Convenience Sampling .i have used both. · Type Of Data There are mainly two types of data primary data and Secondary data. research instruments.
ANALYSIS OF QUESTIONNAIRE .
.1) Do You Invest in Stock Market ? Invest 80% Do Not Invest 20% 20 invest Do not invest 80 In my survey I found that most of people up to 80% in pune city invest in stock market. This shows that the market of pune city is very potential. Only 20% people don’t invest in stock market.
so that they prefer equity as a good investment instrument. They are supposed that equity market is some what risky market and it isgambling. Currently market is going in bull side.2) Out of the following investment options. where do you prefer to invest your savings rateon the scale of 1 to 5? (5 being the most important factor) ? MF 64 EQUITY 160 DEBT 14 BANK 164 PMS 14 GOVT. . But it also gives very good return.BONDS COMMIDITY INSURANCE POST 26 20 100 38 Here I found that mostly people fund their investment in safe side. so that they invest in bankand insurance.
3) For How Much Period Do You Want To Invest In Stock Market? Long Term. .77 Short Term -23 23 LONG TERM SHORT TERM 77 In my survey I found that maximum of the respondents invest for the long term (77%) while only 23% invest for the short period of time.
. Company Research (10%). corporate news and annual report 9% and 5% respect.4) If you invest in Equity. than they invest by tips (24%) and than by own research (15%). on what basis do you select a particular script ? TIPS 24 FRIENDS 38 COMPANY RESEARCH 10 ANNUAL REPORT 5 OWN RESEARCH 15 CORPORATE NEWS 9 9 24 15 TIPS FRIENDS COMPANY RESEARCH 5 10 38 ANNUAL REPORT OWN RESEARCH CORPORATE NEWS In my market survey I found that maximum number of respondents investing influencedby friends (38%).
40 Not Aware.5)Are You Aware Of Portfolio Management Service ? Aware. . while 60% respondents do not aware about PMS.60 As per my survey I found that 40% of the respondents are aware about PMS.
5) Are You a User Of Portfolio Management Service ? Yes -15 No.25 As per my survey I found that 40 percent people are aware about PMS but only 15 person out of 100 are user of PMS who invest in different PMS schemes. .
66% 5 LAKH 46.66% 25 LAKH 26.6) In Which Kind Of PMS Do You Invest ? 50 LAKH 26. while 26% invest in 25 lakh & 50 lakh plan each.66% As per my survey I found that among the PMS users 46% invest in 5 Lakh plan. .
. 34% respondents give the opinion that return risk is a problem while investing in PMS.8) Which Problem Do You Face While Investing In PMS ? BIG AMOUNT 57 RETURN RISK 34 BROKER RISK 9 9 BIG AMOUNT 34 57 RETURN RISK BROKER RISK As per my market survey I found that most of the people face the problem of big amount of investment in PMS. and very few are saying that brokers risk is a problem due to lack of research & knowledge while investing in PMS.
30 No -70 SSKI 6 ILFS 5 ANGEL RBROKING MONEY 4 5 SHCIL 5 PATEL INDIA SECURITIES INFOLINE 2 3 3 6 2 SSKI Broking RMoney 5 5 SHCIL PATEL ANGEL INDIA INFOLINE 5 4 As per my survey people also know about the other service provider accept MOSL which are as above. .7) Do You Know About Any Other PMS Provider ? Yes.
8) Do You Agree That PMS Is a Right Way Of Investment ? Strongly agree 22 Agree 32 Neutral 36 Disagree 9 Strongly Disagree 1 1 9 22 STRONGLY AGREE AGREE NEUTRAL 36 DISAGREE STRONGLY DISAGREE 32 As per my study I found that 22% of the respondents are strongly agree that PMS is a right way of investment. While 32% are agree with the statement. Only 10% are disagreed with the statement. .
Per month. 41 respondents are in between 10000-15000 Rs. And only 15 respondents are above income of 15000 Rs. per month. Per month. .9)Monthly Income of Respondent <10000 44 10000-15000 41 15000-20000 9 20000-25000 5 25000-50000 1 >50000 0 As per my survey result I found that among all my respondents 44 respondents are in income class of <10000 Rs.
SWOT ANALYSIS .
So many times some of employee has no work and this effects on their moral for work and wastage of time also. · The company has well and experience dealers also. · The return given to customers on their investment is high.Strength:· A large network is one of the most plus point of Motilal Oswal. Lack of proper co-ordination between two departments of the company. · The technology used by Motilal Oswal is very advanced · Weakness:There is over staffing in company. PMS is totally dependent on the research work so it is very beneficial for the PMS. · The Research Team of Motilal Oswal is very powerful. · The company’s total turnover is very high. · The leadership of the Motilal Oswal is also very good. · The service provided to customers by Motilal Oswal is also good. The time management of company is not proper. .
· Company arranges seminars regularly for the increasing awareness about the services and its new products s· Threats · The company has to face a cut throat competition · Rules and regulation of government of India are also very tuff · The increment in new competitors of company with new technology is also very fast. · The growth of clients in company is constant. . · The place where the company is situated is a very famous corporate place so it is beneficial for the company. Due to this reason the investors of the other side of Pune can not take the more benefit of it. So company can make its other branch at the other part of Pune also. · The company has huge database of HNI customers.· Opportunity:· The Equity & Derivative market of Pune is very potential. so company can take benefit for its services special for PMS · In Pune city there is only one branch of Motilal Oswal.
FINDINGS · Market is potential but only few people investors know about the PMS services. And as they are long term investor company should try to convert them in Portfolio investor. · HNI Clients agree with research based investment gives more return. . · 20% people are not investing in stock market because they believe that it is gambling and gambling is sin and it is highly risky. · The Company has no any expert person for the marketing of PMS · The company’s Tips are highly demanded · People want to invest in PMS but they are afraid about broker risk and high amount of PMS.
SUGGESTIONS · The staff of Back office or dealers should meet their clients and try to find out their problems and solve it. · The Company should make contact for PMS services with HNI customers. · The Company can create more awareness about PMS through seminars and personal relationship. Most of people don’t know good English. · The Company should take employee specialist for PMS. · Company should make literatures in different languages also. · The solution of customer’s complains should be done on time. · Follow up the customers on time. . · Company should do more advertisement of PMS.
............QUESTIONNAIRE This survey is undertaken as a part of summer training for PGDM program.............. ....) : Less than 10000 [ ] 10000 – 15000 [ ] 15000 – 20000 [ ] 20000 – 25000 [ ] 25000 – 50000 [ ] More than 50000 [ ] Occupation [ ] Businessman [ ] Housewife [ ] Employee [ ] Retired [ ] Student [ ] Other. PERSONAL INFORMATION Name : Age : Email id : Contact No : Monthly Income (Rs... Information provided for the same will be used only for educational purpose and will not be disclosed anywhere else...................
where do you prefer to invest your savings rate on the scale of 1 to 5? (5 being the most important factor) Mutual fund [ ] PMS [ ] Post [ ] Equity [ ] Govt. on what basis do you select a particular script? Tips [ ] Annual Report [ ] Friends [ ] Own research [ ] Company Research [ ] Corporate News [ ] (5)Are you aware of Portfolio Management Services (PMS)? Yes [ ] No [ ] (6)Are you a user of PMS? (Tick any One) Yes [ ] No [ ] . specify) [ ] (3) You prefer to invest for? Long term [ ] Short term [ ] (4) If you invest in Equity.(1)Do you invest in your savings? (Tick any One) Invest [ ] Do Not Invest [ ] (2)Out of the following investment options. Bonds [ ] Debt [ ] Commodity [ ] Bank [ ] Insurance [ ] Other (pl.
(7) How much money have you invested in PMS? (Tick any One)u in Investment more than 50 lakhs [ ] Investment more than 25 lakhs [ ] Investment more than 5 lakhs [ ] None of above [ ] (8)) Do you agree that PMS is a right way of investment? (Tick any One) Strongly agree [ ] Agree [ ] Neutral [ ] Disagree [ ] Strongly disagree [ ] (9)) what problem do you face while investing in PMS? (Tick any One) Big amount for investment [ ] Return risk [ ] Broker risk [ ] (10) Do you know about any other PMS providers? (Tick any One) Yes [ ] No [ ] .