Executive Summary:-: 1.1 About The Company
Executive Summary:-: 1.1 About The Company
Executive Summary:-: 1.1 About The Company
The project titled “AWARNESS OF MUTUAL FUND AND ITS SCOPE” being carried out
for INDIA BULLS SECURITIES LTD.
India bulls operates in various financial products and services like Consultancy, Stock Broking,
Mutual Funds, Insurance, Registrar and Transfer Agent, Research, Mapin etc.
The evaluation of financing planning has been increased through decades, which is best seen in
customer rise. Now a day’s 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 people’s
awareness of various instruments available for Tax planning and Personal Financial Advising
facility provided by the INDIA BULLS SECURITIES 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.
“Indiabulls Financial Services Ltd is listed on the National Stock Exchange, Bombay Stock
Exchange and Luxembourg Stock Exchange. The market capitalization of Indiabulls is around
USD 6,300 million (31st December, 2007). Consolidated net worth of the group is around USD
905 million (31st December, 2007). Indiabulls and its group companies have attracted more
than USD 800 million of equity capital in Foreign Direct Investment (FDI) since March 2000.
Some of the large shareholders of Indiabulls are the largest financial institutions of the world
such as Fidelity Funds, Goldman Sachs, Merrill Lynch, Morgan Stanley and Farallon Capital.
Business of the company has grown in leaps and bounds since its inception. Revenue of the
company grew at a CAGR of 159% from FY03 to FY07. During the same period, profits of the
company grew at a CAGR of 184%.2
Indiabulls became the first company to bring FDI in Indian Real Estate through a JV with
Farallon Capital Management LLC, a respected US based investment firm. Indiabulls has
demonstrated deep understanding and commitment to Indian Real Estate market by winning
competitive bids for landmark properties in Mumbai and Delhi.”
1
Indiabulls Securities Ltd (http://www.indiabulls.com)
2
http://www.indiabulls.com/home/aboutindiabulls.htm
The growth story of Indiabulls Company from its inception (year 2000) to the demerge of
Indiabulls Securities Limited from Indiabulls Financial Services Ltd. (year 2007) is mentioned in
an easily understandable way:
2000-01 Indiabulls Financial Services Ltd. established India’s one of the first trading
platforms with the development of an in house team.
2001-03 Indiabulls expands its service offerings to include Equity, F&O, Wholesale Debt,
Mutual fund, IPO distribution and Equity Research.
Indiabulls came out with its initial public offer (IPO) in September 2004.
2004-05 Indiabulls started its consumer finance business.
Indiabulls entered the Indian Real Estate market and became the first
company to bring FDI in Indian Real Estate.
Indiabulls won bids for landmark properties in Mumbai.
Indiabulls has acquired over 115 acres of land in Sonepat for residential
home site development.
Merrill Lynch and Goldman sac, one of the renowned investment banks in
2005-06
the world have increased their shareholding in Indiabulls.
Indiabulls is a market leader in securities brokerage industry, with around
31% share in online trading.
Farallon Capital and its affiliates, the world’s largest hedge fund committed
Rs. 2000 million for Indiabulls subsidiaries
Steel Tycoon Mr. LN Mittal promoted LNM India Internet venture Ltd.
acquired 8.2% stake.
Indiabulls entered in a 50/50 joint venture with DLF, Kenneth Builders &
Developers (KBD). KBD has acquired 35.8 acres of land from Delhi
Development Authority through a competitive bidding process for Rs 450
crore to develop residential apartments.
Indiabulls Financial Services Ltd. is included in the prestigious Morgan
Stanley Capital International Index (MSCI).
2006-07
Farallon Capital has agreed to invest Rs. 6,440 million in Indiabulls
Financial Services Ltd.
Indiabulls ventured into commodity brokerage business.
Indiabulls has received an “in principle approval” from Government of
India for development of multi product SEZ in the state of Maharashtra.
Dev Property Development plc. has subscribed to new shares and has also
acquired a minority shareholding from the Company.
Indiabulls Financial Services Ltd. Board resolves to Amalgamate and
demerge Indiabulls Securities Limited.
Source: Indiabulls Securities Ltd.
Vice President
Relationship Manager
The bottom of pyramid constitute for the sales and promotions of the company. The main work
of the Senior Relationship Managers (SRMs) and Relationship Managers (RMs) are to attract
the new investors, retain the existing investors and provide them necessary guidance and
services that includes recommendations/tips, account information, check pick-up/courier, trading
for the investors (offline trading) etc.
2.1 Product of Indiabulls Securities Ltd.
The different types of services offered by Indiabulls are:
Depository Services
Commodities
Insurance Products
Mutual Funds
The company offers demat and trading account that can be linked with maximum three bank
accounts for a single investor. The company has tie-ups with the following banks for its
operations:
HDFC Bank
ICICI Bank
Standard Chartered Bank
Citi Bank
HSBC Bank
Kotak Bank
Punjab National Bank
State Bank of India
Axis Bank
ABN-AMRO Bank
Centurion Bank
Yes Bank Ltd.
A/C Opening Charges: Rs 900/-
Annual Maintenance Charges: NIL
Minimum Balance in Trading A/C: NIL
Trading Channels: Both Online and Offline Trading available.
Brokerage Charges:
Intra-day: 5 paisa
On Delivery: 50 paisa
Note: The charges mentioned above are negotiable.
Additional installation (optional): Power IndiabullsTM software
Indiabulls.com has developed an online share trading system that is truly user-friendly, operates
on a real-time basis and guarantees the highest degree of Internet security. The trading system is
supplemented by a rich reservoir of information and analyses on a range of personal finance
products and investing options. The site also provides stock charts with technical analyses. The
one-time charges for installing the software and creating the user id is Rs 750/-.
Access to Indiabulls Equity Analysis – Being a trader with Indiabulls Securities Ltd.,
the investor will have access to the equity analysis of the company. The e-mails including
the research reports prepared by Research and Development Team of Indiabulls will be
sent to the investor’s email address.
Dedicated Support and Services – The investors enjoy priority access to Relationship
Managers who are dedicated to support the trading and investing needs of the investors.
In the Habsiguda branch, only online trading is done. In other five branches available in
Hyderabad, trading via both the methods i.e. online and offline are done.
2.3 Comparative Analysis of Brokerage Firms:
The following table shows the comparative analysis of the various broking firms based on our
observations :
(*DT= Fee includes demat and trading account, D=Fee includes only demat account, T=Fee
includes only trading account, AMC=Annual Maintenance Charges (incurs each year),
XXX=Data not available and needs to be collected.)
The Minimum Balance in the trading account for India Infoline and Sharekhan are Rs
2000 and Rs 5000 respectively. However, it is NIL for the other brokerage firms.
Table 1
1. Threat of Entry:
The threat of new entrants presents the possibility that new firms (entry of foreign players) will
enter the industry and diminish industry returns by passing along value to buyers in the form of
lower prices and raising the cost of competition. New forms of trading including T+2 settlement
system, dematerialization etc are strengthening the brokerage market and attracting foreign
companies to enter the Indian industry.
2. Threat of Substitutes:
The second factor affecting industry competition is the availability of substitutes. The relative
price of substitutes and the buyer propensity to substitute have effects on the industry. Brokerage
firms increasingly face substitutes in the form of real estate, moneymarket funds, and insurance.
Substitute products take on added importance as their availability increase. Various alternative
forms of investment including fixed deposits with banks and post offices etc; act as substitutes to
broking products and services. The main substitute for brokerage industry is mutual fund
industry.
3. Supplier Power:
Factors relating to the bargaining power of suppliers include the threat of forward integration and
the concentration of suppliers in the industry. There is a growing dependence of corporate on
broking houses with the rising number of IPO’s coming to the market.
4. Buyer power:
The fourth competitive force is the bargaining power of buyers. If significant buyer power exists,
industry returns can accrue to buyers in the form of lower prices. Buyer power is determined by
switching costs, the relative volume of purchases, the standardization of the product, elasticity of
demand, brand identity, and quality of service. Investors often lack the knowledge and expertise
in the financial sector that calls them to approach the broking houses. The broking services
provided by the various companies are homogeneous with very low product differentiation. This
allows customers to enjoy a greater bargaining power.
5. Rivalry:
Rivalries naturally develop between companies competing in the same market. Competitors use
means such as advertising, more attractive customer service and price competition to enhance
their standing and market share in a specific industry. Lots of brokerage companies are moving
towards consolidation with the smaller ones becoming either franchisees for the larger brokers or
closing operations. Various foreign banks like ABN Amro and others are planning to enter the
Indian retail brokerage industry. There is an increasing demand for online trading due to
consumer’s growing preference for internet as compared to approaching the brokers.
2.5 Marketing of Indiabulls Products
1. Acquiring Contacts –
The first and the foremost thing in sales is to acquire the contacts.The contacts can be acquired
from the following sources –
• Company Personnel – The contacts given by company personnel can be of extreme help. The
leads provided by Sr. Relationship Manager are very useful because they have very good
experience in the industry and their contacts with people from other industry are also good. E.g.
a Sr. Relationship Manager having contacts with a bank official can help to provide some good
leads.
• Personal Network – The contacts can also be gathered from personal network. Contacts from
families, friends and known sources are much easy to contact and convince as compare to
contacts from any other sources.
• Other Sources - Contacts can also be gathered from various other sources. Contacts can be
gathered from internet, yellow pages etc.
We interacted with a lot of people , mostly IT professionals who were very aware of the Stock
market but very few were interested in opening an account with Indiabulls securities.
We were able to generate 20 good responses who were willingly interested in knowing about
Indiabulls and the various plans that’s indiabulls had. The following up with these clients is
still going on.
We analysed that the the clients in these segements were mainly the customers of ICICI direct
and were more or less satisfied with the services of ICICI. They were aware of the High
Brokerage charges levied by ICICI and still did not want to change brokers. Bringing these
clients to Indiabulls by pitching on the advantages of Indiabulls is the greatest challenge for
Indiabulls.
Another thing which we analyzed that the awareness of India bulls among this segment is pretty
low because of the lack of advertisement and promotion done by Indiabulls.Steps like
promotional campaigns must be done to increase the awareness.
The following flowshart shows the procedure for marketing of indiabulls products:
Start
Perspective Log
Positive Negative
Positive Making Calls
Response
possitive negative
Response
Saving the data
for the future
Stop
Telling him about the products