A Summer Training In
A learning experience which will go a long way to build my career in service sector specially in capital market.
Financial Products & their marketing. Challenges & level of energy required to be an profitable employee. What a simple task like selling a share take.
Indiabulls ± Is India¶s leading Financial Services and Real Estate Company. With a great reach to the market with Its securities, consumer finance, mortgage and real estate development. Founded in the May 2000., When 3 IIT ian¶s by the name Mr Sameer Gehlot, Rajiv Rattan, Saurabh Mittal took over Orbis Securities. They had a vision to have a online broking system based on a American concept. It started with 2 branch's all over the nation and a handful employees. Currently It have more than 640 branches all over India, and a huge client base of 4,50,000 customers , served by around 4000 relationship managers and several support staffs (comprised of dealers and back office staff).
Branch Network and Employee growth
IBL Footprint Increasing No of Branches
No of Branches No of RMs
Increasing Number of RMs
5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 124 Mar- Mar- Mar- Jun- Dec- Jan03 04 05 05 06 07 476 970
700 600 500 400 306 300 200 100
1 branch 2-5 branches > 5 branches
241 148 25 63
0 Mar- Mar- Mar- Jun- Mar- Jan03 04 05 05 06 07
650 Branches across 145 cities
Diversified Business groups
Securities & Derivatives Broking Secured Financing
Mortgage & Housing Finance
Financial Products Distribution
Growing Customer base
Increasing Number of Customers
500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 Mar-03 Mar-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 2007 Jan 16,455 30,498 79,932 108,324 178,800 144,000 235,000 450,000
SENIOR VICE PRESIDENT REGIONAL MANAGER BRANCH MANAGER/ SENIOR SALES MANAGER Support System
Local Back office Executive Compliance Officer
Net sales 450 400 350 300 250 200 150 100 50 0 5-Mar 4-Mar Kotak 5-Mar 4-Mar ICICI Rs in crores 5-Mar 4-Mar
100 90 80 70 60 50 40 30 20 10 0 5-Mar 4-Mar Kotak (%) 5-Mar 4-Mar ICICI 5-Mar 4-Mar
Operating Profit Ratio
Operating Profit Ratio
stands third in revenue generation, with largest client base It¶s CAGR is 184 % (03-06) while ICICI CAGR is 114 % (03-06)
operating profit ratio is below industrial average by around 20 % This shows its inefficiency in managing cost.
Return On Capital Employed
ROCE(%) 80 70 60 0 0 30 20 10 0 70 60 0 0 30 20 10 0
Return On Equity
stands second in terms of return to the cost of capital, but there is huge difference between first and second.
difference in Return on Equity is not huge between Indiabulls & Kotak, it means that Indiabulls major share capital is funded by bonds Also proves that dividend 9 pay off can be high.
I I I
£ ¤ ¡
C U S T O M E R
Independent Financial Advisor
WAP Gateway Mobile Phone
Centralised Risk Management System
Transaction Engine Virtual Private Network connecting all branches Telebroking Telephone to Customer Care /Investment Advisor
NSE BSE Depositary CMA M. Funds
Basically provide three products for trading. They are Cash account Intraday account Margin trading (Mantra) Cash account provides the client to buy 4 times of cash balance in his trading account. Intraday product provides the client to buy 8 times of his cash balance in the trading account. Mantra account ± called as margin trading, is a special account to buy on leverage for a longer duration.
Indiabulls provides funding for A category shares bought. These funds are to be paid back to Indiabulls on the T+2nd day, other wise the stocks will be sold off up to the extant of negative cash, on the T+5th day. This is provided to all clients by default. After the T+2nd day client will be charged delayed payment charges. (Stock margin + cash margin)* 4 =Delivery (Cash Margin + Stock margin)*8 = Intraday (Cash margin + Stock Margin)= futures Cash Margin * 2 = Margin trading
The trading attracts a brokerage of 0.5 % of total transaction value for Delivery (on both buying leg as well as selling leg) 0.1% of total transaction value for intraday (on both buying leg as well as selling leg) 0.1% of total transaction value for F&O (on both buying leg as well as selling leg). Service tax of 12.24% on the brokerage is applicable for all the above Other taxes and stamp duties are also levied (based on the charges as per prevailing rates).
Derivatives are instruments whose value is µderived¶, in whole or in part, from the value of one or more underlying assets. In India we have several derivatives, two of the most famous derivatives traded on National stock exchange are Futures Option Derivatives act as a hedging tool Straddle Buy one Call and one Put at the same strike rate Stranger Buy one Call and one Put at different strike rates
A collection of investments held by an institution or a private individual. Holding a portfolio is often part of an investment and risklimiting strategy called diversification. By owning several assets, certain types of risk (in particular specific risk) can be reduced
Deviation measure the risk
Reduced standard of combined assets Can be aligned with Index Fund (example NIFTY)
Observation & Suggestion
High turnover ratio of Relation Managers (RM) Lack of specialized suggestions & tips. There should be an increase in TA for RMs Firm should provide database to RMs A fresh advertisement campaign is required. A New Plan