Karvy Stock (Finance)

7/27/2019 Karvy Stock (Finance)

1/63


2/63

DECLARATION

I Sandeep Yadav declares that the project report titled AWARENESS OF

MUTUL FUND is based on my project study. This project report is my original

work and this has not been used for any other purpose anywhere.

Sandeep Yadav

Name of the Student

2


3/63

PREFACE

For management student theoretical knowledge as well as practical knowledge

is must. Management of modern business requires an appreciation of

multidisciplinary concept and in depth knowledge of specific analytical tools,

geared to the solution of real life problems. No doubt every situation is unique

but a set of theoretical tool of knowledge, itself based on empirical foundation,

can help in developing the mechanism for handling such situation. Therefore,

the MBA curriculum has been designed to provide practical exposure to the

future manager. The project study is necessary for the fulfillment of MBA

curriculum, it provide an opportunity to the researcher to understand industry

with special emphasis on the development of skills in analysis, interpretation of

practical problem through application of management.

3


4/63

ACKNOWLEDGEMENT

I express my sincere thanks to my project guide, Mr. ASHISH SINGH,

RESIONAL HEAD [CAT] Karvy Fortune for guiding me right from the inception

till the successful completion of the project. I sincerely acknowledge him for

extending his valuable guidance, support for literature, critical reviews of project

and the report and above all the moral support he had provided to me with all

stages of this project.

I would also like to thanks the supporting staff MANGAL SINGH

Department for their help and cooperation throughout our project.

Sandeep Yadav

4


5/63

EXECUTIVE SUMMARY

The project titled A Study of AWARNESS OF MUTUAL FUND being carried

out forKARVY STOCK BROKING LTD.

Karvy operates in various financial products and services like Consultancy,

Stock Broking, Mutual Funds, Insurance, Registrar and Transfer Agent,

Research, Map in etc.

The evaluation of financing planning has been increased through decades,

which is best seen in customer rise. Now a days investment of saving has

assumed great importance.

According to the study of the Market, it is being observed that markets are doing

well in investments like, Mutual funds, Shares etc. In near future a proper

financial planning is required to invest money in all type of financial product

because there is good potential in market to invest.

The main objective of this project is to know the current scenario of investment

and the peoples awareness of various instruments available for Tax planning

and Personal Financial Advising facility provided by the KARVY STOCK

BROKING LTD.

IT and Retail sector have been given more emphasis for the study of the

project because it is the only sector where all types of age group, Income class

and different level of people are represented.

5


6/63

TABLE OF CONTENTS

S.

NO.

Descriptions Page

no.

1. Introduction to the industry 7-23

2. Introduction to the Organization 24-34

3. Research Methodology

1. Title of the Study

2. Duration of the Project

3. Objective of the Study

4. Types of Research

5. Collection Method and Sample Size

6. Scope of Study

7. Limitation of Study

35-44

4. Facts and Findings 45

5. Data Analysis and Interpretation 46-54

6. Swot Analysis 55-56

7. Conclusion 57

8. Recommendation and Suggestion 58

9. Appendix 59-60

10. BIBLIOGRAPHY 61

6


7/63

INTRODUCTION TO THE INDUSTRY

The Indian financial services industry is in a process of rapid transformation.

Reforms are continuing as part of the overall structural reforms aimed at

improving the productivity and efficiency of the economy. The role of an

integrated financial infrastructure is to stimulate and sustain economic growth.

The Indian economy is estimated to have grown by 7.4 per cent in 2009-10.

According to the latest Central Statistical Organisation (CSO) data, financial

7


8/63

services, banking, insurance and real estate sectors rose by 9.7 per cent in

2009-10.

Overall, the US$28 billion Indian financial sector has grown at around 15

percent and has displayed stability for the last several years, even when othermarkets in the Asian region were facing a crisis, according to Ministry of

External Affairs, Government of India. This stability was ensured through the

resilience that has been built into the system over time. The financial sector has

kept pace with the growing needs of corporate and other borrowers. Banks,

capital market participants and insurers have developed a wide range of

products and services to suit varied customer requirements. The Reserve Bank

of India (RBI) has successfully introduced a regime where interest rates are

more in line with market forces.

Indias financial services sector will enjoy generally strong growth during coming

years, driven by rising personal incomes, corporate restructuring, financial

sector liberalization and the growth of a more consumer-oriented, credit-oriented

culture. This should lead to increasing demand for financial products, including

consumer loans (especially for cars and homes), as well as for insurance and

pension products.

According to data from Bloomberg, India's market cap as a percentage of world

market cap was 2.8 per cent as on December 31, 2009.

In 2009, there were 21 IPOs that raised US$ 4.18 billion as compared to 36

IPOs in 2008 that raised US$ 3.62 billion.

Further, according to ICICI Securities, Indian companies are likely to raise up toUS$ 42.43 billion from the primary market over the next three years. According

to Madhabi Puri-Buch, Managing Director and CEO, ICICI Securities' nearly

US$ 20 billion will be raised from the initial public offer (IPO) market this fiscal

(2010-11), of which around US$ 8.49 billion would be from the public sector and

an equal amount from private companies.

Moreover, on the back of an increase in the participation of agriculture and other

commodities, the 23 commodity exchanges posted 50 per cent year-on-year

growth in turnover in the April-February period of 2009-10, to touch US$ 1.53

8


9/63

trillion, according to the commodity markets regulator, Forward Markets

Commission (FMC).

The average assets under management of the mutual fund industry stood at

US$ 170.46 billion for the month of May 2010, as compared to US$ 135.58

billion in May 2009, according to the data released by Association of Mutual

Funds in India (AMFI).

FINANCIAL MARKETS

A Financial Market can be defined as the market in which financial assets are

created or transferred. As against a real transaction that involves exchange of

money for real goods or services, a financial transaction involves creation or

transfer of a financial asset. Financial Assets or Financial Instruments

represents a claim to the payment of a sum of money sometime in the future

and /or periodic payment in the form of interest or dividend.

Money Market- The money market ifs a wholesale debt market for

low-risk, highly-liquid, short-term instrument. Funds are available in thismarket for periods ranging from a single day up to a year. This market is

dominated mostly by government, banks and financial institutions.

Capital Market - The capital market is designed to finance the long-

term investments. The transactions taking place in this market will be for

periods over a year.

Forex Market - The Forex market deals with the multicurrencyrequirements, which are met by the exchange of currencies. Depending

on the exchange rate that is applicable, the transfer of funds takes place

in this market. This is one of the most developed and integrated market

across the globe.

Credit Market- Credit market is a place where banks, FIs and NBFCs

purvey short, medium and long-term loans to corporate and individuals.

9


10/63

Constituents of a Financial System

FINANCIAL INTERMEDIATION

Having designed the instrument, the issuer should then ensure that these

financial assets reach the ultimate investor in order to garner the requisiteamount. When the borrower of funds approaches the financial market to raise

funds, mere issue of securities will not suffice. Adequate information of the

issue, issuer and the security should be passed on to take place. There should

be a proper channel within the financial system to ensure such transfer. To serve

this purpose,

Financial intermediaries came into existence. Financial intermediation in

the organized sector is conducted by a widerange of institutions functioning

under the overall surveillance of the Reserve Bank of India. In the initial stages,

the role of the intermediary was mostly related to ensure transfer of funds from

the lender to the borrower. This service was offered by banks, FIs, brokers, and

dealers. However, as the financial system widened along with the

developments taking place in the financial markets, the scope of its operations

also widened. Some of the important intermediaries operating ink the financial

markets include; investment bankers, underwriters, stock exchanges, registrars,

depositories, custodians, portfolio managers, mutual funds, financial advertisers

10


11/63

financial consultants, primary dealers, satellite dealers, self regulatory

organizations, etc. Though the markets are different, there may be a few

intermediaries offering their services in move than one market e.g. underwriter.

However, the services offered by them vary from one market to another.

INTODUCTION TO MUTUAL FUNDS

INTRODUCTION:

Mutual funds are for everyone. Around the world, millions of investor invests in

mutual funds because of their safety, ease of investing and the many

advantages they offer. It is very necessary before investing that you know some

basics of investing which are given below.It is best option for those investors

who dont have time to manage their fund.

Investments and you:

Investment is never an easy process. However, a sound understanding of some

basic concepts make the process of investment decision-making much easier

and the experience much more enjoyable. The following step can help you get

started on your path to becoming a successful investor:

1. Identify your financial needs and goals:

The first step is to get a clear understanding of your own financial needs and

goals. Ask yourself the question When do I need money and for what purpose?

List down your financial goals and when they will materialize (daughters highereducation after 6 years, purchase of a house after 10 years), and how much

money you will need for the same. The answer will help you arrive at the time

frame for your investment short term, medium term or long term.

2. Understand your tolerance to risk:

Before making an investment decision, it is very necessary for an investor to

know his risk tolerance limits. Will he be comfortable with fluctuations in the

value of his investments? Or would he prefer to settle down for a lower return

11


12/63

without many ups and downs. By knowing risk tolerance limit of himself an

investor can decide his portfolio and also choose from a variety of financial

investment tools, one which suit his portfolio the most.

3. Estimate your required rate of return:

Your required rate of return depends on your financial goals and the time you

have to achieve them. Take an example that your retirement goal at 58 years is

Rs. 20 Lakhs and your monthly savings is Rs. 5000, your required rate of return

depending on your current age would be:

As you can see, the later you start, the higher will be your required rate of return,

hence as your investment horizon reduces, for the same level of saving you may

need to take higher risk. Alternatively, if you were not willing to take a higher

risk, you would have to save a higher amount every month- Rs 9800, almost

twice the original savings required to achieve your target accumulation.

These three steps give a very basic idea about how to invest, when an investoris seeking investment in different financial tools. Though there are different steps

of investment in each financial tool, these acts as blue print for them too.

MUTUAL FUNDS AND YOU:

What is a mutual fund?

A mutual fund is a type of financial intermediary that pools the funds of

investors who seek the same general investment objective and invests them

in a number of different types of financial claims (e.g. equity shares, bonds,

money market instrument). These pooled funds provide thousands of

investors with proportional ownership of diversified managed by professional

investment managers.

Where do mutual funds invest?

Broadly, mutual funds invest basically in three types of asset classes:

12


13/63

Stocks: Stocks represent ownership or equity in a company. These are also

called as shares.

Bonds: These represent debt from companies, financial institutions or

government agencies.

Money Market Instruments: These include short term debt instrument

such as treasury bills, certificates of deposits and inter bank money.

HISTORY OF MUTUAL FUNDS IN INDIA:

In India the setting up of Unit Trust of India (UTI) in 1963 marked the advent ofmutual fund industry. Unit Trust of India was set up by an Act of Parliament. The

purpose of establishing of Unit Trust of India was to give a fillip to the equity

market. In the wake of Indo-China war of 1962, there was shortage of savings

going into industrial investment for economic development. There was a need to

mobilize adequate amount of risk capital for industrial enterprise. The household

savings were sought to be channelized into primary and secondary market

through units. However, in the initial years, the emphasis in UTI was on incomeproduct. Master Share launched in 1986 ushered in the equity-oriented schemes

in India. Unit Trust of India launched a variety of innovative products suited to

meet diverse needs of investors, virtually the complete life cycle of investors.

EVOLUTION OF MUTUAL FUND IN INDIA:

The mutual fund industry in India started in 1963 with the formation of Unit Trust

of India, at the initiative of the Government of India and Reserve Bank the. The

history of mutual funds in India can be broadly divided into four distinct phases.

FIRST PHASE: 1964-1987

13


14/63

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was

set up by the Reserve Bank of India and functioned under the Regulatory and

administrative control of the Reserve Bank of India. In 1978 UTI was de-linked

from the RBI and the Industrial Development Bank of India (IDBI) took over theregulatory and administrative control in place of RBI. The first scheme launched

by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6, 700 crores of

assets under management.

SECOND PHASE: 1987-1993 (ENTRY OF PUBLIC SECTOR

FUNDS)

1987 marked the entry of non- UTI, public sector mutual funds set up by public

sector banks and Life Insurance Corporation of India (LIC) and General

Insurance Corporation of India (GIC). SBI Mutual Fund was the first non- UTI

Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec

87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov

89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LICestablished its mutual fund in June 1989 while GIC had set up its mutual fund in

December 1990.

At the end of 1993, the mutual fund industry had assets under management of

Rs.47, 004 crores.

THIRD PHASE: 1993-2003 (ENTRY OF PRIVATE SECTOR

FUNDS)

With the entry of private sector funds in 1993, a new era started in the Indian

mutual fund industry, giving the Indian investors a wider choice of fund families.

Also, 1993 was the year in which the first Mutual Fund Regulations came into

being, under which all mutual funds, except UTI were to be registered andgoverned. The erstwhile Kothari Pioneer (now merged with Franklin Templeton)

was the first private sector mutual fund registered in July 1993. The 1993 SEBI

14


15/63

(Mutual Fund) Regulations were substituted by a more comprehensive and

revised Mutual Fund Regulations in 1996. The industry now functions under the

SEBI (Mutual Fund) Regulations 1996

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more

comprehensive and revised Mutual Fund Regulations in 1996. The industry now

functions under the SEBI (Mutual Fund) Regulations 1996

FOURTH PHASE: SINCE 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI

was bifurcated into two separate entities. One is the Specified Undertaking ofthe Unit Trust of India with assets under management of Rs.29, 835 crores as at

the end of January 2003, representing broadly, the assets of US 64 scheme,

assured return and certain other schemes. The Specified Undertaking of Unit

Trust of India, functioning under an administrator and under the rules framed by

Government of India and does not come under the purview of the Mutual Fund

Regulations.

The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC.

It is registered with SEBI and functions under the Mutual Fund Regulations. With

the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,

000 crores of assets under management and with the setting up of a UTI Mutual

Fund, conforming to the SEBI Mutual Fund Regulations, and with recent

mergers taking place among different private sector funds, the mutual fund

industry has entered its current phase of consolidation and growth. As at the end

of September, 2004, there were 29 funds, which manage assets of Rs.153108

crores under 421 schemes.

15


16/63

The graph indicates the growth of assets over the years

FUNDS FOR ALL REASONS AND ALL SEASONS

TYPES OF MUTUAL FUNDS

Mutual Funds have specific investment objectives such as growth of capital,

safety of principal current income or tax exempt income, one can select one fund

or any number of different funds to help one meets ones specific goals. In

general mutual fund fall under 3 general categories: -

Equity fund invest in shares of common stocks.

16


17/63

Fixed income funds invest in government or corporate securities which

offer fixed rate of returns.

Balanced fund invest in a combination of both stocks and bonds.

AGGRESSIVE GROWTH FUNDS

These funds seek to provide maximum growth of capital with secondary

emphasis on dividend or interest income. They invest in common stocks with a

high potential for rapid growth and capital appreciation.

Aggressive growth funds are suitable for those investors who can afford toassume the risk of potential loss in value of their investment in the hope of

achieving substantial and rapid gains. They are not suitable for investors who

must conserve their principal or who must maximize their current income.

GROWTH FUNDS

Like aggressive growth funds, growth fund generally invests in stocks for growth

rather than income. They are considered more conservative in their approach

because they usually invest in established companies to achieve long-term

growth. Growth fund provides low current income but the investor principal is

more stable then it would be in an aggressive growth fund. While the growth

potential may be less over the short term, many growth funds have superior

long-term performance records.

These funds are suitable for growth oriented investors but not investors who are

unable to assume risk or who are dependent on maximizing current income from

there investments.

GROWTH AND INCOME FUNDS

Growth and income funds seek long-term growth of capital as well as current

income. The investments strategies use to reach these goals vary among funds.

Growth and income funds have low to moderate stability of principal and

moderate potential for current income and growth. They are suitable for

17


18/63

investors who can assume some risk to achieve growth of capital but want to

maintain a moderate level of current income.

FIXED INCOME FUNDS

The goal of fixed income fund is to provide high current income consistent with

the level of capital. Growth of capital is of secondary importance.

Fixed income funds offer a higher level of current income than money market

funds, but a lower stability of principal. Fixed income funds are suitable for

investors who want to maximize current income and who can assume a degree

of capital risk in order to do so.

EQUITY FUNDS

Funds that invest in stocks represent the largest category of mutual fund.

Generally the investment objective of this class of fund is long-term capital

growth with some income. There are however many type of equity funds.

BALANCED FUNDS

The Balanced funds aims to provide both growth and income. These funds

invest in both shares and fixed income securities in the proportion indicated in

their offer documents. It is an idea for investors who are looking for the

combinations of income and moderate growth.

MONEY MARKET FUNDS/ LIQUID FUNDS

For the cautious investors these funds provide a very high stability of principal

while seeking a moderate to high current income. They invest in highly liquid;

virtually risk free, short-term debt securities of agencies of the Indian

government, banks and corporation and treasury bills. Because of their short-

term investments, money market mutual funds are able to keep a virtually

constant unit price; only the yield fluctuates.

Money market funds are suitable for those investors who want high stability of

principal and current income with immediate liquidity.

18


19/63

SPECIALITY / SECTOR FUNDS

These funds invest in securities of a specific industry or sector of the economy

such as health care, technology, leisure, utilities or precious metals. The funds

enable investor to diversify holding among many companies within an industry, a

more conservative approach than investing directly in one particular company.

Sector funds offer a opportunity for sharp capital gains in cases where the funds

industry is in favor but also entail the risk of capital losses when the industry is

out of favor. While sectors funds restrict holdings to a particular industry, other

specialty funds such as index funds gives investors a broadly diversified portfolio

and attempt to mirror the performance of various market averages.

OPEN ENDED SCHEMES

Open-ended schemes do not have a fixed maturity period. Investors can buy or

sell units at NAV- related prices from and to the mutual fund on any business

day. These schemes have unlimited capitalization, open-ended schemes do not

have a fixed maturity, there is no cap on the amount you can buy from the fund

and the unit capital keep growing. These funds are not generally listed on any

exchange.

Open-ended schemes are preferred for their liquidity. Such funds can issue and

redeem units any time during the life of schemes. Hence unit capital of open-

ended funds can fluctuate on a daily basis. The advantages of open ended

schemes are: -

1. Any time exit option

2. Any time enter option.

CLOSE ENDED SCHEMES

Close-ended schemes have fixed maturity periods. Investors can buy into these

funds during the period when these funds are open in the initial issue. After that

such scheme cannot issue new units except in case of bonus or right issue.

However after the initial issue you can buy or sell units of the schemes on the

19


20/63

stock exchange where they are listed. The market price of the unit could vary

from the NAV of the schemes due to demand and supply factor

HOW LONG TO KEEP INVESTMENT TO GET MAXIMUM

RETURNS

Technically open-ended funds you can withdraw your investments even within a

week, but to get desired returns positive time frame is required are:

WHAT RETURNS CAN I EXPECT IF I KEEP MY MONEY FOR

SUGGESTED TIME FRAMES

Funds Returns

Sector funds 22% to 25% p.a

Balance funds 15% to 18% p.a

MIPs Pension Plans 12% to 15% p.a

Income Funds 10% to 12% p.a

Liquid Funds 7% to 9% p.a

The above-mentioned returns in the table are indicative and not assured. All

investments in MUTUAL FUNDS are securities and are subject to market risk

and the NAVs of the schemes may go up and down depending upon the factors

and forces affecting the security market including the fluctuations in the internalrates. The past performance of the MUTUAL FUNDS is not indicative of future

performance.

THE RISK RETURNS GRAPHS FOR VARIOUS FUNDS

The above Graph shows the Risk and Returns generated by different Funds.

Liquid Funds are less Risky and also generate less Returns where as Sector

20


21/63

Funds are more Risky but generate more Returns by the example of above two

Funds it is clear that Risk and Returns are directly proportional to each other.

Other Funds like Equity Funds, Balanced Funds and Income Funds are also

gives the same percentage of Returns as the Risk involved.

REGULATORY ASPECTS

SCHEMES OF MUTUAL FNDS

The Asset management company shall launch no schemes unless the

trustees approve such scheme and a copy of the offer has been filed with

the Board.

Every mutual fund shall along with the offer documents of each scheme

pay filing fees.

The offer document shall contain disclosures which are adequate in order

to enable the investors to make informed investment decision including

the disclosure non maximum investments proposed to be made by the

scheme in the listed securities of the group companies of the sponsor. A

close-ended scheme shall be fully redeemed at the end of the maturityperiod. Unless a majority of the unit holders otherwise decide for its

rollover by passing a resolution.

The mutual fund and asset management company shall be liable to

refund the application money to the applicants:-

If the mutual fund fails to receive the minimum subscription amount

referred to in clause (i) of sub- regulation.

If the moneys received from the applicants for units are in excess of

subscription as referred to in clause (ii) of sub-regulation.

21


22/63

THE ASSET MANAGEMENT COMPANY SHALL ISSUE TO THE

APPLICANT WHOSE:

Application has been accepted, unit certificates or a statement of

accounts

Specifying the number of units allotted to the applicant as soon as

possible

But not later than six weeks from the date of closure of the initial

Subscription list and or from the date of receipt of the request from the

unit

Holders in any open ended scheme.

RULES REGARDING ADVERTISEMENT

The offer document and advertisement materials shall not be misleading or

contain any statement or opinion, which are incorrect or false.

INVESTMENT OBJECTIVES AND VALUATION POLICIES

The price at which the units may be subscribed or sold the price at which such

unit may at any time be repurchased by the mutual fund shall be made available

to the investors.

GENERAL OBLIGATION

Every asset management company for each scheme shall keep and

maintain proper book of accounts, records and document, for each

scheme so as to explain its transaction and to disclose at any point of

time the financial position of each scheme and in particular give a true

and fair view of the state of affairs of the fund and intimate to the board

22


23/63

the place where such books of accounts, records and documents are

maintained.

The financial year for all the scheme shall end as of March 31 of each

year. Every mutual fund or the asset management company shall prepare

in respect of each financial year an annual report and annual statement of

accounts of the schemes and the fund as specified in Eleventh Schedule.

Every mutual fund shall have the annual statement of accounts audited

by an auditor who is not in any way associated with the auditor of the

asset management comp

PROCEDURE FOR ACTION IN CASE OF DEFAULT

On and from the date of the suspension of the certificate or the approval, as the

case may be, the mutual fund, trustees or asset management company, during

the period of suspension and shall be subject to the direction of the Board with

regard to any records, documents, or securities that may be in its custody orcontrol relating to its activities as mutual funds, trustees or the asset

management company.

RESTRICTIONS ON INVESTMENTS

A mutual fund scheme shall not invest more than 15% of its NAV in debt

instrument issued by a single issuer, which are rated not below

investment grade by a credit rating agency authorize to carry out such

activity under the act. Such investment limit may be extended to 20% of

the NAV of the scheme with the prior approval of the Board of Trustees

and the Board of Asset Management Company.

A mutual fund Scheme shall not invest more than 10% of its NAV in

unrated debt instrument issued by a single issuer and the total investment

in such instruments shall not exceed 25% of the NAV of the Board ofTrustees and the Board of Asset management.

23


24/63

No mutual funds under all its schemes should own more than 10% of any

companys paid up capital carrying voting rights.

Such transfers are done at the prevailing market price for quoted

instrument on spot basis.

The securities so transferred shall be in conformity with the investment

objectives of the scheme to which such transfer has been made.

A scheme may invest in another scheme under the same asset

management company or any other mutual fund without charging any

fees, provided that aggregated intercourse inter scheme investment made

by all schemes under the same management or in schemes under the

management of any other asset management company shall not exceed

5% of the net asset value of the mutual fund.

SOME FACTS FOR THE GROWTH OF MUTUAL FUNDS

IN INDIA

100% growth in the last 6 years.

Number of foreign AMCs is in the queue to enter the Indian markets like

Fidelity Investments, US based, with over US$1trillion assets under

management worldwide.

Our saving rate is over 23%, highest in the world. Only channelizing these

savings in mutual funds sector is required.

We have approximately 29 mutual funds which is much less than US

having more than 800. There is a big scope for expansion.

'B' and 'C' class cities are growing rapidly. Today most of the mutual

funds are concentrating on the 'A' class cities. Soon they will find scope

in the growing cities.

Mutual fund can penetrate rural like the Indian insurance industry with

simple and limited products.

SEBI allowing the MF's to launch commodity mutual funds.

INTRODUCTION TO THE ORGANISATION

24


25/63

KARVY STOCK BROKING LIMITED

KARVY is a premier integrated financial services provider and ranked

among the top five in the country in all its business segments. It services

over 16 million individual investors in various capacities and provides

investor services to over 300 corporate.

It is a member of all three:-

National Stock Exchange (NSE)

Bombay Stock Exchange (BSE)

Hyderabad Stock Exchange (HSE)

Karvy utilized its experience and superlative expertise to capitalize on its

strengths and better its service, innovate and provide new ones. It

diversified in the process and thus evolved as Indias premier integrated

financial service enterprise.

Karvy has been a customer centric company since its inception. It offers a

single platform servicing multiple financial instruments in its bid to offer

complete financial solutions to the varying needs of both corporate and

retail investors, where an extensive range of services are provided with

great volume-management capability.

KARVY covers the entire spectrum of financial services such as Stock

broking, Depository Participants, Distribution of financial products -

mutual funds,bonds, fixed deposit, equities, Insurance Broking,

Commodities Broking, Personal Finance Advisory Services, Merchant

Banking & Corporate Finance, placement of equity, IPOs, among others.

Karvy has a professional management team and ranks among the best in

technology, operations and research of various industrial segments.

25


26/63

BACKGROUND

The flagship company, Karvy Consultants Limited was found with the

vision and enterprise of a group of practicing Chartered Accountants on amodest scale in 1981 in Hyderabad, where it now has 13 branches.The

name KARVY is actually the Initials of their names.

K - Mr. Kutumb Rao

A- Mr Ajay Kumar

R- Mr. Ramaswamy

V-Mr. Venkat Naidu

Y-Mr. Yugandhar

It initiated with just one activity and later carved roads into fields of

registry and share accounting as well. From then there was no stopping

at all. A decade of commitment, professional integrity and vision helped

Karvy achieve a leadership position in its field. It is known to handle the

largest number of issues ever in the history of the Indian stock market in a

particular year. Thereafter, Karvy made inroads into a host of capital

market services, corporate and retail which proved to be a sound

business synergy. Today Karvy has access to millions of Indian

shareholders, besides companies, banks, financial institutions and

regulatory agencies. Over the past one and half decades, Karvy has

involved as a veritable link between industry, finance and people.

An ISO 9002 company, Karvys commitment to quality and retail reach

has made it an integrated financial services company. A SEBI category 1

registrar, so far Karvy has handled over 675 issues as Registrars to

public issues, processed over 52 million applications and is servicing over

16 million investors from various locations spread over 205 cities.

Karvys Mission

26


27/63

Our mission is to be a leading and preferred service provider to our

customers, and we aim to achieve this leadership position by building an

innovative, enterprising, and technology driven organization which will set

the highest standards of service and business ethics .

Vision of Karvy

To achieve & sustain market leadership, Karvy shall aim for complete

customer satisfaction, by combining its human and technological

resources, to provide world class quality services. In the process Karvyshall strive to meet and exceed customer's satisfaction and set industry

standards.

KARVY MILESTONES

Karvy has travelled a success route over the past 20 years and

positioned itself as an emerging financial service giant in which embeds

the confidence and support of enviable patrons across the financial world.

Patrons are also of diversified fields which includes over 16 million

individual investors in various capacities and 300 corporate comprising

the best out of the whole lot .Years of experience of holistic financial

services and expertise in this industry has helped it gain the status it

enjoys and cherishes today.

Continued.

Future Plans of Karvy:

To set up its own Asset Management Company

To set up its own Bank by 2012.

Karvy Group of Companies

27


28/63

As discussed earlier, KARVY offers a single platform servicing

multiple financial instruments in its bid to offer complete financial solutions

to the varying needs of both corporate and retail investors. The range of

products and services are provided by the following wings.

1) Karvy Consultants Limited

This is the flagship company of Karvy Group and it controls theorganizational affairs, channels of progress, work affairs and

pioneering business policies. This was the first business the KARVY

group ventured into, but now they have transferred it into a joint

venture with computer share limited of Australia, the worlds largest

registrar. This company services around 6 lakh customer accounts in

a spread of 250 cities/towns in India.

2) Karvy Stock Broking Limited

It is undisputable fact that the stock market is unpredictable and

volatile, but despite this KSBL enjoys a high success rate as a wealth

management option. Karvy Stock Broking Limited offers services that

28


29/63

are much beyond serving just as a medium for buying and selling

stocks and shares. Instead it provides multi dimensional and multi

focused services. It offers trading facilities for National Stock

Exchange, Bombay Stock Exchange and Hyderabad Stock Exchangeand tries to make trading safe to maximum possible extent. For this

they are assisted by their in depth research team for constant

feedback and sound advices.

The Finapolis is the monthly magazine that is published by this wing.

It analyzes the latest stock market trends and takes a close look at the

various investment options and products available in the market. A

weekly report,

called Karvy Bazaar Baatein, keeps people informed on the

immediate trends in the stock market. In addition, the specific industry

reports give more comprehensive information on various industries. It

also offers special portfolio analysis packages that provide daily

technical advice on scrips for successful portfolio management. It

provides customized advisory services to help the client make rightfinancial moves which specifically suits their portfolios.

3) Karvy Computershare Limited

Karvy Computershare Limited

This wing of Karvy has traversed wide spaces to tie up with the

worlds largest transfer agent, the leading Australian company

Computershare Limited. This company services more than 75 million

shareholders across 7000 clients and makes its presence felt in over

12 countries across 5 continents. It has also entered into a 50-50 joint

venture with Karvy. After transferring completely to this new entity it

29


30/63

has tried to enrich the financial services industry as a whole. The

worldwide network of Computershare helps it to adapt to the

international standards in addition to leveraging the best technologies

from all over the world.

Karvy Comtrade Limited

Karvy Commodities focuses on taking commodities trading to new

dimensions of reliability and profitability. They have made

commodities trading, an essentially age-old practice, into a

sophisticated and scientific investment option. It helps in enabling

trade in all goods and products of agricultural and mineral origin that

include lucrative commodities like gold and silver and popular items

like oil, pulses and cotton through a well-systematized trading

platform.

4) Karvy Insurance Broking Limited :

Karvy Insurance Broking Pvt. Ltd., provides both life and non-life

insurance products to retail individuals, high

net-worth clients and corporates. With the opening up of the insurance

sector and entry of a large number of private players in the business, it

is in a position to provide tailor made policies for different segments of

customers.

30


31/63

Karvy Investor Services Limited:

This wing of Karvy is registered with SEBI as a category 1 merchant

banker and is also recognized as a leading merchant banker of the

country. It has built its reputation by capitalizing the opportunities asand when it comes, be it in corporate consolidations, mergers and

acquisitions or corporate restructuring. Involvement in raising

resources for corporate or government undertaking successfully over

the past two decades has given it a tremendous confidence boost.

5) Karvy Data Management Services Limited:

Karvy Data Management Services is the domestic BPO arm of the

Karvy Group and services corporate across various industry verticalsand business horizons. KDMSL is emerging as a leading service

provider in the areas of E-governance processing, insurance back

office processing, record keeping, back office for BFSI clientele and is

in pursuit to establish credentials in the areas of Telecom processing,

Data management requirements of large corporates.

KDMSL is striving to achieve leadership position by tapping the Indian

retail sector boom, through a combination of our extensive branch

network and proprietary IT backbone. Needless to say, KDMSL is run

31


32/63

as an independent outfit with seasoned professionals on board, who

have decades of expertise in the industry.

KDMSL is a fully owned subsidiary of Karvy Stock Broking Limited

(KSBL), incorporated in April 2008 and is head quartered at

Hyderabad.

6) Karvy Global Services :

Karvy Global Services is a knowledge services company. It provides

specialist resources to extend in house analyst teams in driving clear

business results. It serves investment banks, insurance providers,

brokerages, hedge funds, research agencies, and life settlement

providers across the United States, Middle East, and Europe. Their

areas of focus include equity and industry research, commodity

research, credit analytics, technology-based workflow solutions,

insurance policy and portfolio valuation, and other specialized

services.Incorporated in 2004, The Company is backed by over 25

years of experience through Indias largest financial services

company, the Karvy Group. It is located in New York and have primary

global delivery centre in Hyderabad, India.

32


33/63

7) Karvy Finance :

Karvy Financial Services Ltd. is a wholly owned subsidiary of Karvy

Stock Broking Ltd .It was established in the year 2009.KARVY Group,

a pioneer in financial services in India, has forayed into retail finance

space with its Non Banking Financial Corporation (NBFC) KarvyFinancial Services Ltd or Karvy Finance. Karvy Finance has a vision

to be the Category Champion for Retail Finance in India. Karvy

Finance aims to offer a complete bouquet of financial services

products to its customers with secured and unsecured lending

products (such as loans against securities, loans against property and

personal/business loans).

10) Karvy Realty India Limited:

Karvy Realty (India) Limited (KRIL) is promoted by the Karvy Group,

Indias largest financial services group. The group carries forward its

legacy of trust and excellence in investor and customer services

delivered with passion and the highest level of quality that align with

global standards.

Karvy Realty (India) Limited is engaged in the business of real estateand property services offering:

33


34/63

Buying/ selling/ renting of properties

Identifying valuable investments opportunities in the real estate

sector

Facilitating financial support for real estate and investments in

properties

Real estate portfolio advisory services.

11) Karvy Fortune:

From the year 2007.Karvy Stock Broking Limited started offering its

franchisee through Karvy Fortune, a separate vertical which would

handle all the matters related to franchisees. It provided opportunities

for the franchisees to join hands with the company that is ranked

among top five in the country in all its business segments. Karvy

Franchisees are provided with support of highly qualified and

dedicated professionals. Karvy provides the complete backing of its

research. Armed with these invaluable inputs, customers can take

right investment decisions. Karvy Stock Broking Limited has over 1000

franchisees all over India and around 10 in Rajasthan.

QUALITY POLICY:

To achieve and retain leadership, Karvy aims for complete customer

satisfaction, by combining its human and technological resources, to

provide superior quality financial services. In the process, Karvy

strives to exceed Customer's expectations.

34


35/63

As per the Quality Policy, Karvy will:

Build in-house processes that will ensure transparent and harmonious

relationships with its clients and investors to provide high quality of

services.

Establish a partner relationship with its investor service agents and

vendors that will help it in keeping up to its commitments to the

customers.

Provide high quality of work life for all its employees and equip them

with adequate knowledge & skills so as to respond to customer's

needs.

Continue to uphold the values of honesty & integrity and strive to

establish unparalleled standards in business ethics.

Use state-of-the art information technology in developing new and

innovative financial products and services to meet the changing needs

of investors and clients.

Strive to be a reliable source of value-added financial products,

services and constantly guide the individuals and institutions in

making a judicious choice of same.

Strive to keep all stake-holders (shareholders, clients, investors,

employees, suppliers and regulatory authorities) proud and satisfied.

Achievements:

Among the top 5 stock brokers in India (4% of NSEvolumes)

India's No. 1 Registrar & Securities Transfer Agents

Among the top 3 Depository Participants

Largest Network of Branches & Business Associates

Among top 10 Investment banker

Research Methodology

35


36/63

Research has its special significance in solving various operational and planning

problem of business and industry. Research methodology is a way to

systematically analyze the research problem.

Title of the Study:

A Study of Awareness of mutual fund and its scope

Duration of the Project:

The duration of the project was 45 days from 24th June 2010 to 10st

August.2011

OBJECTIVE OF STUDY

In view of the problem cited above, the study aims at analyzing the following

major issues:

To know the awareness of MUTUAL FUND among people.

To know the different Asset management companies involve in MUTUAL

FUND.

To know the different aspects of MUTUAL FUND according to different

age, profession etc.

To see the interest of people in investing in MUTUAL FUNDS.

To know the future of MUTUAL FUNDS in India. To know the different attitudes of people regarding risk, rate of return,

period of investment etc.

To study the diversification of mutual fund.

TYPES OF RESEARCH

The customer research was carried out in two phases:

36


37/63

a. An exploratory research was carried out to know what customer looks for in

financial company and whether customers are satisfied or not with there

products

b. The other was a diagnostic study to identify the factors responsible for

satisfactions or dissatisfaction of customer

This research is descriptive and qualitative type of research which was used to

collect useful data

Sample Size and method of selecting sample

Sample size

The sample size of my project is limited to 85only.

Sample design

Data has been presented with the help of diagrammatic and pie chart

etc.

Sampling procedure

The sample is selected in a random way, irrespective of them being investor

or not or availing the services or not. It was collected through mails and

personal visits to the known persons, by formal and informal talks and

through filling up the questionnaire prepared. The data has been analyzed by

using the measures of central tendencies like mean, median, mode. The

group has been selected and the analysis has been done on the basis

statistical tools available.

37


38/63

SCOPE OF STUDY

Research can be defined as a systemized effort to gain new knowledge. A

research is carried out by different methodologies which have their own prosand cons. Research methodology is a way to solve research in study and

solving research problems along with logic behind them are defined through

research methodology. Thus while talking about research methodologies we are

not only talking of research methods but also consider the logic behind the

methods. We are in context of our research studies and explain why it is being

used a particular method or technique and why the others are not used. So that

research result is capable of being evaluated either by researcher himself or by

others.

PROBLEM STATEMENT

Due to the falling Rate of Interest on Bank deposits, it is obvious that Investment

in Mutual Fund will grow in year to come. However lack of Awareness of Mutual

Fund is a hindering factor in expected growth of Mutual Fund Business.

Under noted problems are envisaged in this area:

o Difficult in convincing people for investment.

o Difficult to change mind of the investor according to age and Profession.

o Difficult to make an approach to investors.

o Difficult to take an appointment with professional people.

o Difficult to get the documents required for formalities from investorso Difficult to overcome an impassionate person who wants return in less time.

o Difficult to follow up the people whose names are being stored in a data.

o Difficult to remove the fear of risk from the minds of investors.

ASSUMPTIONS

38


39/63

1. It has been assumed that sample of hundred represents the whole

population

2. The information given by the customer is unbiased

LITERATURE SURVEY

The project is based on pure findings of facts

Development of Working Hypothesis: The hypothesis could be

developed by discussing with the consulting department heads and guides about

this exploratory research and reach to the conclusion that the data is to be

collected by personal interaction with the clients, asking them about their

investment planning and their need for financial advisory service from KARVY

Stock Broking Ltd.

First of all are they aware of tax and investment planning or not and then

analyzing the findings to reach to the objectives of research.

.

a. Sampling Methods: A sample is the representative of the populations

which will predict the behaviors of the whole universe

b. The sampling size put under 2 categories: Probability Sampling and Non

Probability Sampling.

c. COLLECTION OF DATA

This research is solely based on primary research done by means of

questionnaires targeted to respondents who primarily belong to the business

and service sector. The sample size is 100

We have executed the project after prior discussion with our guide and

structured in the following steps:

a. Preparation of a questionnaire

39


40/63

b. The focal point of the designing the questionnaire was to comprehend the

current investment scenario

c. This questionnaire was primarily aimed to respondents who belong to the

service and business class peopled. The questionnaires were discussed through personal interface with the

respondents

The initial issue expenses in respect of any scheme may not exceed 6% of the

funds raised under that scheme.

Every mutual fund shall buy and sell securities on the basis of deliveries andshall in all cases of purchases, take delivery of relative securities and in all

cases of sale, deliver the securities and shall in no case put itself in a

position whereby it has to make short sale or carry forward transaction or

engage in Badla finance.

Every mutual fund shall get the securities purchased or transferred in the

name of the mutual fund on account of the concerned scheme, wherever

investments are intended to be of long-term nature.

Pending deployment of funds of a scheme a mutual fund can invest the funds

of the scheme in short term deposits of scheduled commercial banks.

No mutual fund scheme shall make any investment in;

o Any unlisted security of an associate or group company of the sponsor

or

o Any security issued by way of private placement by an associate or

group company of the sponsor.

o The listed securities of group companies of the sponsor which is in

excess of 30% of the net assets (of all the schemes of a mutual fund)

o No mutual fund scheme shall invest more than 105 of its NAV in the

equity shares or equity related instrument of any company. Provided

40


41/63

that, the limit of 10 percent shall not be applicable for investments in

index fund or sector or industry specific schemes.

o A Mutual fund scheme shall not invest more than 5% of its NAV in the

equity shares or equity related investments in case of open-ended

schemes and 10 % of its NAV in case of close ended schemes.

ADVANTAGE OF MUTUAL FUND

The advantages of investing in a Mutual Fund are:

Diversification: The best mutual funds design their portfolios soindividual investments will react differently to the same economic

conditions. For example, economic conditions like a rise in interest rates

may cause certain securities in a diversified portfolio to decrease in value.

Other securities in the portfolio will respond to the same economic

conditions by increasing in value. When a portfolio is balanced in this

way, the value of the overall portfolio should gradually increase over time,

even if some securities lose value.

Professional Management : Most mutual funds pay topflight

professionals to manage their investments. These managers decide what

securities the fund will buy and sell.

Regulatory oversight: Mutual funds are subject to many government

regulations that protect investors from fraud.

Liquidity : It's easy to get your money out of a mutual fund. Write a

check, make a call, and you've got the cash.

Convenience: You can usually buy mutual fund shares by mail,

phone, or over the Internet.

Low cost : Mutual fund expenses are often no more than 1.5 percent of

your investment. Expenses for Index Funds are less than that, because

index funds are not actively managed. Instead, they automatically buy

stock in companies that are listed on a specific index.

Transparency: Mutual Fund schemes are said to be Transparent

because they show the clear allocation of Funds to Investors.

41


42/63

Flexibility: Mutual funds are flexible because they change time to time

and also if an Investor wants his money back before the maturity of the

Fund He/she can easily redeem it.

DRAWBACKS OF MUTUAL FUNDS

Mutual funds have their drawbacks and may not be for everyone:

No Guarantees :

No investment is risk free. If the entire stock market declines in value, the

value of mutual fund shares will go down as well, no matter how balanced

the portfolio. Investors encounter fewer risks when they invest in mutual

funds than when they buy and sell stocks on their own. However, anyone

who invests through a mutual fund runs the risk of losing money.

Fees and commissions :

All funds charge administrative fees to cover their day-to-day expenses.

Some funds also charge sales commissions or "loads" to compensate

brokers, financial consultants, or financial planners. Even if you don't use

a broker or other financial adviser, you will pay a sales commission if you

buy shares in a Load Fund.

Taxes:

During a typical year, most actively managed mutual funds sell anywhere

from 20 to 70 percent of the securities in their portfolios. If your fund

makes a profit on its sales, you will pay taxes on the income you receive,

even if you reinvest the money you made.

Management risk:

When you invest in a mutual fund, you depend on the fund's manager to

make the right decisions regarding the fund's portfolio. If the manager

42


43/63

does not perform as well as you had hoped, you might not make as much

money on your investment as you expected. Of course, if you invest in

Index Funds, you forego management risk, because these funds do not

employ managers.

ASSOCIATION OF MUTUAL FUNDS IN INDIA

With the increase in mutual fund players in India, a need for mutual fund

association in India was generated to function as a non-profit organization.

Association of Mutual Funds in India (AMFI) was incorporated on 22nd August

1995.

AMFI is an apex body of all Asset Management Companies (AMC), which has

been registered with SEBI. Till date all the AMCs are that have launched mutual

fund schemes are its members. It functions under the supervision and guidelines

of its Board of Directors.

Association of Mutual Funds India has brought down the Indian Mutual Fund

Industry to a professional and healthy market with ethical lines enhancing and

maintaining standards. It follows the principle of both protecting and promoting

the interests of mutual funds as well as their unit holder

The objectives of Association of Mutual Funds in India

The Association of Mutual Funds of India works with 30 registered AMCs of the

country. It has certain defined objectives, which juxtaposes the guidelines of its

Board of Directors. The objectives are as follows:

This mutual fund association of India maintains high professional and

ethical standards in all areas of operation of the industry. It also

recommends and promotes the top class business practices and code of

conduct which is followed by members and related people engaged in the

activities of mutual fund and asset management. The agencies that are

by any means connected or involved. In the field of capital markets and

financial services also involved in this code of conduct of the association.

43


44/63

AMFI interacts with SEBI and works according to SEBIs guidelines in the

mutual fund Industry.

Association of Mutual Fund in India do represent the Government of

India, the Reserve Bank of India and other related bodies on mattersrelating to the Mutual Fund Industry.

It develops a team of well qualified and trained Agent distributors. It

implements a program of training and certification for all intermediaries

and other engaged in the mutual fund industry.

AMFI undertakes all India awareness programmed for investors in order

to promote proper understanding of the concepts and working of mutual

funds.

At last but not the least association of mutual fund of India also

disseminate informations on Mutual Fund Industry and undertakes

studies and research either directly or in association with other bodies.

44


45/63

LIMITATIONS OF STUDY :

Every work has its own limitations. Limitations are extent to which the process

should not exceed. The following limitations for the project are:

1. Duration of project was not enough to make our conclusion on such a

vast subject. Time constraints has also become a major limitation

2. The sample size taken for drawing the conclusion was not sizeable

3. Investor ignorance was faced during discussions with respondents

Research has been done only at Rajasthan

Some of the persons were not so responsive.

Possibility of error in data collection.

Possibility of error in analysis of data due to small sample size.

45


46/63

4. FACTS AND FINDINGS

PROJECT FINDINGS:

There is great opportunity for Mutual Fund companies as there is a is a

rise in number of people who want to invest in share market but dont

have time and knowledge to do so, also these people want to take less

risk .

With booming market and falling interest rate of bank deposits, people

see mutual funds as an attractive financial tool which provide a high

return rate at lower risk as compared to equity market.

Young people these days are particularly more interested in mutual funds

because they see mutual fund as safe bet. Also these people have large

disposable incomes and risk taking capability too.

The bad part is people are still ignorant about mutual funds and different

schemes about mutual funds, hence it is very necessary to educate them

about mutual funds

Advertising can also play a major part as it has been seen that people

buy mutual fund looking at the brand name.

46


47/63

5. Analysis and Interpretation:

Q1. Do you invest regularly?

YES 89

NO 11

TOTAL 100

89%

11%

Chart Title

YES NO

It has been observed that approximately 90% of the correspondents invest in

some or the other financial instrument. Though the percentage of choice of

investment may vary due to different factors such as age, education, risk etc.

47


48/63

Q2. Do you invest using-

a. Scientific Tools b. By Intuition

Scientific Tools 47

By Intuition 53

Total 100

47%

53%

Chart Title

Scientific Tools By Intuition

It has been observed that there is no major difference between the percentage

of people who invest using scientific tools and those whose who believe in their

intuition but it is seen that the younger generation is more leaning towards usage

of scientific tools than their peers.

48


49/63

Q3. What are you preferred investment priorities?

a. Insurance

YES 77

NO 23

TOTAL 100

77%

23%

Chart Title

YES NO

A major chunk who have been interviewed it has been observed that almost

80% have some kind of insurance policy. It has also been observed that though

LIC is a public sector undertaking, people of all ages have more faith in it as

compared to other private sector companies.

49


50/63

b. Bank (Fixed deposit)

YES 49

NO 41

TOTAL 100

54%

46%

Chart Title

YES NO

There is no major difference between the number of people who prefer keeping

their money in fixed deposit and who dont opt for it. There is however a growing

concern about the falling interest rate in banks on fixed deposit.

50


51/63

51


52/63

c. Bonds & Debentures

YES 34

NO 66

TOTAL 100

34%

66%

Chart Title

YES NO

It has been observed that only 34% they have invested in Bonds and

Debentures AS compared to those who have not. This may be due to lessknowledge about it or the time of re-demption.

52


53/63

d. Equities & Share Market

YES 45

NO 55

TOTAL 100

45%

55%

Chart Title

YES NO

By the chart we observe that the percentage of people investing in equity and

share market is not much but there is a going interest among people especiallythe younger generation to invest so as to make quick bucks with the market

boom.

53


54/63

Q5. Are you aware about mutual funds?

YES 88

NO 12

TOTAL 100

YES

NO

Only 12% of correspondent said they dont know any thing about mutual fund

and 88% said they know about mutual funds but what we found that they have

just a primary or very negligible knowledge about mutual funds and not really

aware of the concept called MUTUAL FUND.

54


55/63

Q6. What is your perception about mutual funds?

SAFE 15%

RISKY 25%

OTHERS 60%

TOTAL 100%

7%

13%

30%

50%

Chart Title

SAFE RISKY OTHERS TOTAL

The percentage of person who say that mutual fund is safe is 5%, an those who

say it is risky is 25% but a major percentage of corresponds opt as other which

is about 60%. These are people who say that mutual funds are high risk and

high gain or even people who have no opinion.

55


56/63

Q9. How you choose a mutual fund?

BRAND NAME 35

HIGH NAV 26

HIGH RETURNS 15

ADVERTISING 12

OTHERS 12

TOTAL 100

35%

26%

15%

12%

12%

Chart Title

BRAND NAME HIGH NAV HIGH RETURNS ADVERTISING OTHERS

It has been observed that brand name does matter when people are choosing a

mutual fund as 35% said brand name. The next is NAV at about 26%. These two

factors play a major role during selection of mutual funds.

56


57/63

6. SWOT ANALYSIS OF KARVY

Strengths:

1. Brand Name

2. Employees are highly empowered.

3. Strong Communication Network.

4. Good co-operation between employees.

5. Number 1 Registrar and Transfer agent in India.

6. Number 1 dealer of Investment Products in India.7. Quality services provided to clients

8. All financial needs under one roof of

Weaknesses:

High Employee Turnover

Low advertisements

High Cost structure

Opportunity:

1. Growth rate of mutual fund industry is 40 to 50% during last year and it

expected that this rate will be maintained in future also.

2. Marketing at rural and semi-urban areas.

3. Potential Market for investors

4. Tapping those people who are not satisfied with their existing

business.

5. More aware people intending to invest in markets with right

companies

57


58/63

Threats:

1. Increasing number of local players.

2. Past image of Mutual Fund.

3. Growing competition in this sector

58


59/63

7. CONCLUSION:

After conducting the research work, and analyzing it carefully, it was seen

that there are many other broking firms besides Karvy which are giving

good competition to the company.. We came to certain conclusion after

the study which is as follows:

1] The plan of Karvy is good provided the cost is reduced according to

what is prevailing in the market. Few services like cheque punching

facility, loan against Mutual funds, Marginal funding is not provided by

everyone in the market

1) There is tough competition in the market and hence the company

needs to make flexible plan rather than a fixed policy to sustain in the

market and retain the existing clients.

2) It was also noticed that few people still know Karvy as registrar and

transfer agent and not aware of its Equity business. The company

needs to create awareness in the market for the same..

.

Response was very good from the customer regarding financial product

because in this time every one wants more return on less investment

I concluded by this that research that services and returns got more

importance than goodwill.

I also conclude that many financial services at one place is the another reason

of its popularity

59


60/63

8. Recommendations And Suggestion

India is passing through a tremendous growth phase with an average growth

rate of 7-8% per annum. With this growth phase there is growth in each and

every sector, hence there is rush to by shares and equities. It is also a very

good time for mutual fund companies but it is advisable for them and their

brokers that they dont just sell mutual funds but sell the right kind of scheme

which is comfortable to a person nature of taking risk and need,

There is a general ignorance and questions about, what are mutual funds?

What are different schemes of mutual funds? How to invest in a mutual? Andmany more. This thing should be handled by mutual fund companies and

their brokers to provide knowledge to their clients.

It has been seen that there is a major increase in the percentage of young

investors who have large amount of disposable income with them and want

to invest, these type of prospective clients should be tapped at an early

stage.

Small towns, villages are still untapped and can also acts as an business

area of very huge potential.

Now even co-operative society can invest up to 10% of their capital in mutual

funds which open the door to new and very important client base.

60


61/63

APPENDIX

1. Are you a regular investor?

a. Yes b. No

2. Do you invest using

a. Scientific Tools b. By Intuition

3. What are your preferred investment priorities?

Name of Investment

Insurance

Bank

Bonds & Debentures

Equities & Share Market

PPF (Public Provident Fund)

NSC (National Saving Schemes)

Post Office Saving Schemes

Real Estate

Gold

Others

4. What percentage of your income do you invest?

a. Below 10%

b. 10% - 30%

c. 30% - 50%

d. Above 50%

61


62/63

5. Are you aware about Mutual Funds?

a. Yes b. No

6. What is your perception about Mutual Funds?

a. Safe

b. Risky

c. Others

7. Have you invested in some Mutual Funds?

a. Yes b. No

8. Do you know different type of Mutual Fund scheme present in the

market?

a. Yes b. No

9. How do you select and choose Mutual Funds?

a. Brand Name b. High NAV

c. High Dividends d. Advertisement

e. Others

62


63/63

BIBLIOGRAPHY

Books:

1. Kotler Philip , Marketing Management (2009), (Thirteenth Edition)

2. Marketing Management, The McGraw.Hill Company Rajan Saxena (Third

Edition)

3. Berman, Berry and Joel r Evans (Oct- 1997) Retail Management: A strategic

approach 8th edition Englewood cliffs NJ printcehall

4. Country analysis 1997 A framework to identify and evaluate the national

business environment

5. KOTHARI C.R.: Research Methodology Management, 3rd Edition

MAGAZINE

A) OUTLOOK BUSINESS (FEB, 2009)

B) BUSINESS STANDARD (April-July 2009)

C) 4PS OF BUSINESS AND MARKETING (June 2009)

D) BUSINESS TODAY - Pick and Choos

WEB:

www.karvy.com
http://www.karvy.com/http://www.karvy.com/

Documents

Karvy Stock (Finance)