EXECUTIVE SUMMARY

The Indian capital markets have seen a lot of economic swing since last decade

but still it has been flourishing with rapid transformations. Reforms are continuing

and are bringing a lot of change in structure, process and governance of capital

market. This is helping Indian capital market to gain an image of mature market

place in the capital markets of the world. The working mechanism are now more

flexible and transparent. The stock exchanges has been corporatized too. Other

than this new instruments like index future, index options, derivatives etc. has

been introduced.

Out of the major players showing their presence in the financial markets,

Reliance Money is the one. Reliance Money is promoted by Reliance Capital;

one of India's leading and fastest growing private sector financial services

companies, ranking among the top 3 private sector financial services and

banking companies, in terms of net worth. During past few years, it has picked up

a considerable market share in the sector of financial services.

It is a one-stop-shop, providing end-to-end financial solutions (including mobile

and web-based services).  It has the largest non-banking distribution channel

with over 10,000 outlets and 20,000 touchpoints spread across 5,165 cities/

towns; catering to the diverse needs of over 3 million existing customers.

During the internship, a research has been carried out on the on the topic “A

study of investor behaviour at Reliance Money”. The objectives of the research

were to create awareness about various products and services of the Reliance

Money and to know about the investor behaviour and their preferences towards

investment decisions and considerations. Other than this, the research included

the study of position of Reliance Money in the market and its comparative

position with other players.

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Descriptive research was used in the whole project. The data was collected

through meeting investors and potential investors in various areas of Chandigarh

and questionnaires were filled on the basis of their responses. The collected data

was analyzed using percentage method.

Various findings were derived which revealed perception and behaviour of

investors and potential investors toward financial market. Other than this, the

attitude of investors were also observed towards Reliance Money. Based upon

the findings, various suggestion were given with a view to improve the Position of

Reliance Money in the market.

As a result of research, it was concluded that Reliance Money has a good brand

image but it still has to work upon in various areas to excel in the financial sector.

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Chapter 1 – INDUSTRY PROFILE

1.1 General introduction about financial sector

The financial sector 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 US$ 28 billion Indian financial sector has grown at around 15 per cent and

has displayed stability for the last several years, even when other markets in the

Asian region were facing a crisis. 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.

Financial institutions have combated the reduction in interest rates and pressure

on their margins by constantly innovating and targeting attractive consumer

segments. Banks and trade financiers have also played an important role in

promoting foreign trade of the country.

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1.2 Capital Market

The Indian capital markets have witnessed a transformation over the last decade.

India is now placed among the mature markets of the world. Key progressive

initiatives in recent years include:

• The depository and share dematerialisation systems that have enhanced the

efficiency of the transaction cycle

• Replacing the flexible, but often exploited, forward trading mechanism with

rolling settlement, to bring about transparency

• The infotech-driven National Stock Exchange (NSE) with a national presence

(for the benefit of investors across locations) and other initiatives to enhance the

quality of financial disclosures.

• Corporatization of stock exchanges.

• The Securities and Exchange Board of India (SEBI) has effectively been

functioning as an independent regulator with statutory powers.

• Indian capital markets have rewarded Foreign Institutional Investors (FIIs) with

attractive valuations and increasing returns.

• The Mumbai Stock Exchange continues to be the premier exchange in the

country with an increase in market capitalisation from US$ 40 billion in 1990-

1991 to US$ 203 billion in 1999-2000. The stock exchange has about 6,000

listed companies and an average daily volume of about a billion dollars

• Many new instruments have been introduced in the markets, including index

futures, index options, derivatives and options and futures in select stocks.

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1.4 Origin and Development of the industry

The Bombay Stock Exchange (BSE) is known as the oldest exchange in Asia. It

traces its history to the 1850s, when stockbrokers would gather under banyan

trees in front of Mumbai’s Town Hall. The location of these meetings changed

many times, as the number of brokers constantly increased. The group

eventually moved to Dalal Street in 1874 and in 1875 became an official

organization known as ‘The Native Share & Stock Brokers Association’. In 1956,

the BSE became the first stock exchange to be recognized by the Indian

Government under the Securities Contracts Regulation Act.

The Bombay Stock Exchange developed the BSE Sensex in 1986, giving the

BSE a means to measure overall performance of the exchange. In 2000 the BSE

used this index to open its derivatives market, trading Sensex futures contracts.

The development of Sensex options along with equity derivatives followed in

2001 and 2002, expanding the BSE’s trading platform.

Historically an open-cry floor trading exchange, the Bombay Stock Exchange

switched to an electronic trading system in 1995. It took the exchange only fifty

days to make this transition.

Capital market reforms in India and the launch of the Securities and Exchange

Board of India (SEBI) accelerated the integration of the second Indian stock

exchange called the National Stock Exchange (NSE) in 1992. After a few years

of operations, the NSE has become the largest stock exchange in India.

Three segments of the NSE trading platform were established one after another.

The Wholesale Debt Market (WDM) commenced operations in June 1994 and

the Capital Market (CM) segment was opened at the end of 1994. Finally, the

Futures and Options segment began operating in 2000. Today the NSE takes the

14th position in the top 40 futures exchanges in the world.

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In 1996, the National Stock Exchange of India launched S&P CNX Nifty and CNX

Junior Indices that make up 100 most liquid stocks in India. CNX Nifty is a

diversified index of 50 stocks from 25 different economy sectors. The Indices are

owned and managed by India Index Services and Products Ltd (IISL) that has a

consulting and licensing agreement with Standard & Poor’s.

In 1998, the National Stock Exchange of India launched its web-site and was the

first exchange in India that started trading stock on the Internet in 2000. The NSE

has also proved its leadership in the Indian financial market by gaining many

awards such as ‘Best IT Usage Award’ by Computer Society in India (in 1996

and 1997) and CHIP Web Award by CHIP magazine (1999).

The National Stock Exchange of India was promoted by leading Financial

institutions at the behest of the Government of India, and was incorporated in

November 1992 as a tax-paying company. In April 1993, it was recognized as a

stock exchange under the Securities Contracts (Regulation) Act, 1956. NSE

commenced operations in the Wholesale Debt Market (WDM) segment in June

1994. The Capital Market (Equities) segment of the NSE commenced operations

in November 1994, while operations in the Derivatives segment commenced in

June 2000.

Since the early 1950s till the early 1990s, Indian policy makers had been

nourishing the goal of Socialist pattern of society. They had been following the

development planning strategy of the former Soviet Russia in a mixed economic

framework. From July 1991, in the face of an unprecedented foreign exchange

crisis, Indian economy started experiencing an IMF-World Bank dictated regime

of liberalisation.

One aspect of this is financial liberalisation. There is a move towards privatisation

of nationalised banks – these banks are selling their shares in the stock market.

Transnational banks are encouraged to operate in the Indian banking sector.

Attempts are made to attract foreign direct investment in different sectors. There

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is an increasing entry of foreign portfolio capital due to stock market

liberalisation. People are encouraged to invest in stocks through income tax

benefits and abolition of capital gains tax. There is a move to develop a national

pension fund which will be invested in different stocks to get returns out of which

pension will be provided to retired people. It is expected that boosting up of stock

market will accelerate the process of capital accumulation and growth.

Stock market development has been an important part of financial liberalisation

in the less developed countries (LDCs). In the pro-liberalisation circle, stock

market is assigned to play an important role in the capitalist development of

LDCs.

There are many studies supporting the positive link between stock market

development and growth. Let us mention some of the recent studies. One

important study was undertaken by Levine and Zervos (1998). Their cross-

country study found that the Development of banks and stock markets has a

positive effect on growth. In another study Levine (2003) argued that although

theory provides ambiguous relationship between stock market liquidity and

economic growth, the cross-country data for 49 countries over the period 1976-

93 suggest a strong and positive relationship (see also Levine, 2001). Henry

(2000) studied a sample of 11 LDCs and observed that stock market

liberalisations lead to private investment boom. Recently, Bekaert et al (2005)

analysed data of a large number of countries and observed that the stock market

liberalisation ‘leads to an approximate 1 % increase in annual real per capita

GDP growth’.

There are some economists who are sceptical. Long time back Keynes (1936)

compared the stock market with casino and commented: ‘when the capital

development of a country becomes the by-product of the activities of a casino,

the job is likely to be ill-done’.

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Referring to the study of World Bank (1993) , Singh (1997) pointed out that stock

markets have played little role in the post-war industrialisation of Japan, Korea

and Taiwan. He argued that the recent move towards stock market liberalisation

is ‘unlikely to help in achieving quicker industrialisation and faster long-term

economic growth’ in most of the LDCs.

In this perspective this study examines the nature of relationship between stock

market and growth through capital accumulation in India.

1.4 Growth and Present Status of the industry

The ever-growing and fast-maturing 'India Market' is a lucrative business

destination for developed countries. With 7-8% of GDP growth, huge analytical,

young and English speaking work force the 'pull' for opportunities are luring. The

bandwidth of 'India Market' is enviably wide and very deep.

'Markets in India' are well protected by legal guidelines and efficient

administrators. With a liberal and proactive government at the center the road

ahead for 'Markets of India' is very rosy. 'Market India' has witnessed exponential

growth over past one and half decade. Foreseeing sure and substantial returns

on investments (ROI) companies are pro- actively listing on the stock market

indexes. Government agencies once much hated for red tape and bribes has

shed its image. Professionalism is their new mantra. Public Enterprises like IOC,

ONGC, BHEL, NTPC, SAIL, MTNL, BPCL, HPCL and GAIL, SBI, LIC, Hindustan

Antibiotics Limited, Air India etc. to name a few, are giving Private Indian

companies a good run for their money. Private giants like Reliance Industries

Limited, Infosys, Tata, Birla Corporation, Jet Airways, Ranbaxy, Biocon, Bajaj

Auto, ICICI are breaking their own records every financial years.

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Indian Equity Market at present is a lucrative field for the investors and investing

in Indian stocks are profitable for not only the long and medium-term investors,

but also the position traders, short-term swing traders and also very short term

intra-day traders. In terms of market capitalization, there are over 2500

companies in the BSE chart list with the Reliance Industries Limited at the top.

There are about 22 stock exchanges in India which regulates the market trends

of different stocks. Generally the bigger companies are listed with the NSE and

the BSE, but there is the OTCEI or the Over the Counter Exchange of India,

which lists the medium and small sized companies. There is the SEBI or the

Securities and Exchange Board of India which supervises the functioning of the

stock markets in India.

Thus, the growing financial capital markets of India being encouraged by

domestic and foreign investments is becoming a profitable business more with

each day. If all the economic parameters are unchanged Indian Equity Market

will be conducive for the growth of private equities and this will lead to an overall

improvement in the Indian economy.

Indian Stock Market including both NSE-National Stock Exchange and the BSE-

Bombay Stock Exchange have certainly taken a tremendous beating in the past

few weeks. We are sure most of us here knew that the correction in the trading

curve was round the corner which would be healthy, and the markets would

bounce back with the help of mutual fund investments & buying of Indian stocks

again. However the anticipation went wrong, and the US recession story along

with global and Indian commodity prices have added fuel to the global equity

market turmoil on a whole.

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1.5 Future of the industry

The stock market is booming in spite of the low agriculture output. The monsoon

is good in an overall sense but still the question remains who takes the credit?

The answer is the karma of the people. I appreciate the Indian politicians and the

industrialists who being pawns of destiny are doing things positive and

productive. India, as a country is running a very good period and the position of

planets in the transit are giving wonderful results.

Less than one percent of population own stocks and less than 1000 individuals

control the market, the majority being the FIIs, the promoters of the company.

The credit should go to media for making stock market headlines.

In any case if you are long terms players then step-in and buy now and forget for

another 10 years. You will make a killing in the Indian markets.

Most of the tech companies and the main index will do well but slightly in the

lower side of expectations.

1.6 Structure, Processes and Governance of the industry

Under this, various processes involved in the industry will be discussed. Other

than this, the bodies governing the industry will also be brief upon and and an

endeavour will be made to understand the whole structure of the industry.

1.6.1 Dematerialized Trading

Indian investor community has undergone see changes in the past few years.

India now has a very large investor population and ever increasing volumes of

trades. However, this continuous growth in activities has also increased problems

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associated with stock trading. Most of these problems arise due to the intrinsic

nature of paper based trading and settlement, like theft or loss of share

certificates. This system requires handling of huge volumes of paper leading to

increased costs and inefficiencies. Risk exposure of the investor due to this

trading in paper.

Some of these risks are:

1. Delay in transfer of shares.

2. Possibility of forgery on various documents leading to bad deliveries,

legal disputes etc.

3. Possibility of theft of share certificates in the market.

4. Multiplication or loss of share certificates in transit.

5. Prevalence of fake certificates in the market.

The physical form of holding and trading in securities also acts as a bottleneck

for broking community in capital market operations.

The introduction of NSE and BOLT has increased the reach of capital market

manifolds. The increase in number of investors participating in the capital market

has increased the possibility of being hit by a bad delivery. The cost and time

spent by the brokers for rectification of these bad deliveries tends to be higher

with the geographical spread of the clients. The increase in trade volumes lead to

exponential rise in the back office operations thus limiting the growth potential of

the broking members. The inconvenience faced by investors (in areas that are far

flung and away from the main metros) in settlement of trade also limits the

opportunity for such investors, especially in participating in auction trading. This

has made the investors as well as broker wary of Indian capital market. In this

scenario, dematerialized trading is certainly a welcome move.

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1.6.2 What is Dematerialization?

Dematerialization or “Demat” is a process whereby your securities like shares,

debentures etc, are converted into electronic data and stored in computers by a

Depository. Securities registered in your name are surrendered to depository

participant (DP) and these are sent to the respective companies who will cancel

them after “Dematerialization” and credit your depository account with the DP.

The securities on Dematerialization appear as balances in your depository

account. These balances are transferable like physical shares. If at a later date,

you wish to have these “Demat” securities converted back into paper certificates;

the Depository helps you to do this.

Dematerialization is the process of converting the securities held in physical form

(certificates) to an equivalent number of securities in electronic form and crediting

the same to the investor’s Demat account. Dematerialized securities do not have

any certificate numbers or distinctive numbers and are dealt only in quantity i.e.;

the securities are fungible.

Dematerialization of your holdings is not mandatory. You can hold your secure

Demat form or in physical form. You can also keep part of your holdings (in the

same script) in Demat form & part in physical form. However, securities specified

by SEBI can be delivered only in Demat form in the stock exchanges connected

to NSDL and / or CDSL.

The Process

1. Surrendering of certificate to Depository Participants for

dematerialization.

2. NSDL is informed by the DP through electronic connectivity.

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3. Original share certificates are submitted to the registrar by the DP.

4. The request for dematerialization from NSDL to the register.

5. The registrar credits an equivalent number of shares in the account

and informs NSDL.

6. The NSDL updates its own account and the depository participants are

informed.

7. The depository agent credit it in the account of the investor and the

same is informed to the investor.

1.6.3 Rematerialisation

Sometimes the investor may like to convert his electronic holdings back into

physical share certificate. The process undertaken for this purpose is called

rematerialisation. The investor has to make a request to the depository

participant for rematerialisation. The depository participant puts forward the

request to NSDL after verifying whether the investor in having necessary security

balances. NSDL in turn will intimate the registrar who prints the certificate and

dispatch the same to the investor. The certificate has a new range of certificate

numbers and new folio number.

The Process

1. Investor requests the DP for rematerialisation.

2. The depository participant informs it to the NSDL.

3. NSDL intimates the Registrar.

4. The Registrar of the company prints certificates with new number and

informs NSDL.

5. NSDL adjusts its account and passes on the details to the DP.

6. The certificates are dispatched to the investor.

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1.6.4 What is Depository?

Depository functions like a securities bank, where the dematerialized physical

securities are traded and held in custody. This facilitates faster, risk free and low

cost settlement. Depository is much like a bank and performs many activities that

are similar to a bank. Following table compares the two.

Bank Depository

Holds funds in accounts Holds securities in account

Transfers funds between accounts Transfers securities between accounts

Transfers without handling money Transfers without handling securities

Safekeeping of money Safekeeping of securities

1.6.5 NSDL and CDSL

At present there are two depositories in India, National Securities Depository

Limited (NSDL) and Central Depository Services Limited (CDSL). NSDL is the

first Indian depository; it was inaugurated in November 1996. NSDL was set up

with an initial capital of US$28mn, promoted by Industrial Development Bank of

India (IDBI), Unit Trust of India (UTI) and National Stock Exchange of India Ltd.

(NSEIL). Later, State Bank of India (SBI) also became a shareholder.

The other depository is Central Depository Services Limited (CDSL). It is still in

the process of linking with the stock exchanges. It has registered around 20 DPs

and has signed up with 40 companies. It had received a certificate of

commencement of business from SEBI on February 8, 1999.

These depositories have appointed different Depository Participants (DP) for

them. An investor can open an account with any of the depositories DP. But

transfers arising out of trades on the stock exchanges can take place only

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amongst account-holders with NSDL’s DPs. This is because only NSDL is linked

to the stock exchanges (nine of them including the main ones-National Stock

Exchange and Bombay Stock Exchange).

In order to facilitate transfers between investors having accounts in the two

existing depositories in the country the Securities and Exchange Board of India

has asked all stock exchanges to link up with the depositories. SEBI has also

directed the companies’ registrar and transfer agents to effect change of

registered ownership in its books within two hours of receiving a transfer request

from the depositories. Once connected to both the depositories the stock

exchanges have also to ensure that inter-depository transfers take place

smoothly. It also involves the two depositories connecting with each other. The

NSDL and CDSL have signed an agreement for inter-depository connectivity.

1.6.5 What is a DP?

A depository is like a bank where securities are held in electronic(dematerialized)

form. In India, there are two Depositories – National securities Depositories

Limited (NSDL) and Central Depository Services Limited (CSDL).

Under the Depositories Act, investors can avail of the services of the

Depositories through Depository Participants (DP) such as ICICI bank. DP’s are

like bank branches wherein shares in physical form need to be deposited for

converting the same to electronic (Demat) form.

NSDL carries out its activities through various functionaries called business

partners who include Depository Participants (DPs), issuing corporate and their

Registrars and Transfer Agents, Clearing corporations/Clearing Houses etc.

NSDL is electronically linked to each of these business partners via a satellite

link through Very Small Aperture Terminals (VSATs). The entire integrated

system (including the VSAT linkups and the software at NSDL and each

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business partner’s end) has been named as the “NEST” [National Electronic

Settlement & Transfer] system.

The investor interacts with the depository through a depository participant of

NSDL. A DP can be a bank, financial institution, a custodian or a broker.

Just as one opens a bank account in order to avail of the services of a bank, an

investor opens a depository account with a depository participant in order to avail

of depository facilities.

1.6.6 How to open a bank account with a DP

Opening a depository account is as simple as opening a bank account. You can

open a depository account with any DP convenient to you.

To open an account you have to:

1. Fill up the account opening form, which is available with the DP.

2. Sign the DP-client agreement, which defines the rights and duties of the

DP and the person wishing to open the account.

3. Receive your client account number (client ID).

4. This client ID along with your DP ID gives you a unique identification in

the Depository system

There is no restriction on the number of depository accounts a person can open.

However, if your existing physical shares are in joint names, you have to open

the account in the same order of names before you submit your share certificates

for demat. A sole holder of the share certificates cannot add more names as joint

holders at the time of dematerializing his share certificates.

However, if the investor wants to transfer the ownership from his individual name

to a joint name, he should first open an account as the sole holder (account A)

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and dematerialize the share certificates. He should then open another depository

account (account B) in which he is the first holder and the other person is the

second holder and make an off market transfer of the shares from the account A

to account B. The investor will incur a charge on this transaction. Alternatively,

the certificates can be transferred to the joint ownership and then sent for

Dematerialization.

Right now, as per the Companies Act, there is no nomination facility for shares

(whether in the physical or in the electronic form). The nomination facility for

shares can be availed of only when the relevant provisions in the Companies Act

are amended. NSDL captures the details of the nominee when the account is

opened so as to offer the facility as soon as the relevant amendments are

effected in the Law.

A client can choose to open more than one account with same DP. In addition to

this, he has a choice of opening accounts with more than one DP. However a

broker can open just one Clearing Member account per card/ stock exchange for

clearing purpose, but he can still open multiple beneficiary accounts Beneficiary

is the personal account wherein brokers can keep their personal holdings.

A broker has only one Clearing Member-pool-account. One Clearing Member

pool account is opened per card/ stock exchange to settle trades in the

dematerialized form. The Clearing Corporation/ House just deals with one

designated account for pay-in and payout and the broker's clients know to which

account they have to deliver and receive securities from.

A clearing member cannot hold his personal holdings in his clearing member

account. A broker may deal in the depository system as a clearing member only

through a special account, known as the Clearing Member account. This account

can be used only for clearing purposes and not for holding his own securities in

it. As this is a transitory account, the securities held in this account are not

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eligible for corporate actions. Therefore, the broker will have to open a separate

beneficiary owner account to hold his investments.

There is no compulsion for the client to open his account with the same DP as

that of his broker. Even if he has an account with another DP, he can carry out

normal business with his broker. There is no loss in operational efficiency. But it

is possible that opening account with his broker's DP may work out to his

advantage, as some DPs may offer special charge structure if the broker and his

clients are dealing through him.

 

1.6.7 Trading

Trading in dematerialized securities is quite similar to trading in physical

securities. The major difference is that at the time of settlement, instead of

delivery/ receipt of securities in the physical form, it is done through account

transfer.

An investor cannot trade in dematerialized securities through his DP. Trading at

the stock exchanges can be done only through a registered trading member

(broker) of the stock exchange irrespective of whether the securities are held in

physical or dematerialized form. DPs role will only be to facilitate settlement of

trade in the dematerialized form, by transferring securities from and to the

account of the investor, for selling and buying respectively.

Trading in dematerialized securities is presently available at NSE, BSE, CSE,

DSE,LSE, MSE, ISE & OTCEI. These exchanges have a segment exclusive for

trading in dematerialized securities and a segment where trades could be settled

either in the physical or in the dematerialized form as per the choice of the

delivering client. In unified (erstwhile - physical) segment securities can be

delivered either in the physical form or in the dematerialized form at the choice of

the delivering party.

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However, securities that have to be mandatorily settled in demat form (both by

institutional investors & all category of investors) cannot be settled in physical

form. Also for securities that have to be mandatorily settled in demat form by all

categories of investors the concept of market lot is eliminated i.e. the tradable lot

is one share from the date they become compulsory.

1.6.8 Settlement

The settlement of trades in the stock exchanges is undertaken by the clearing

corporation (CC)/ clearing house (CH) of the corresponding stock exchanges.

While the settlement of dematerialized securities is effected through depository,

the funds settlement is effected through the clearing banks. The clearing

members directly with the CC/ CH settle the physical securities.

Exclusive Demat segment follows rolling settlement (T+5) cycle and the unified

(erstwhile - physical) segment follows account period settlement cycle. In case of

rolling settlement cycle, the account period is reduced to one day.

In case of settlement of trades done in exclusive Demat segments, the pay-in

and pay out of funds and securities are effected on the same day afternoon

and evening (same day) thus reducing the blockage of funds and limiting

exposure to the clearing corporation.

Settlement of funds is effected through the clearing banks and depository

plays no role in this.

Settlement of securities is effected through NSDL depository system.

Clearing and settlement of the regular market trades is affected through the

clearing members of the clearinghouses of respective stock exchanges. All

trading members of stock exchanges are clearing members of clearing

houses. In addition, for settlement of institutional trades, custodians are also

allowed to act as clearing members.

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Clearing members of clearinghouse, dealing in dematerialized securities are

expected to open a clearing account with any DP for the purpose of settling

trades in dematerialized securities. As, in the mixed (unified) segment, there

is a possibility for all clearing members to receive dematerialized securities,

they are expected to open clearing accounts.

If there is any short delivery at the time of pay-in of securities, these short

positions are auctioned in the Demat segment as done in the Unified

(erstwhile-physical) segment.

For trades executed on Wednesday (TD 1):

Final/ Net obligation statement download - Friday (T+2nd working day)

Settlement day (SD 1) i.e. pay in and pay out of funds and securities - next

Wednesday (T+5th working day)

Auction trade day (ATD 1) - next Thursday (T+6th working day)

Auction settlement day (ASD 1) - Monday (2nd working day from auction

trade day i.e. T+8th working day)

 Similarly, for trades executed on Thursday (TD 2):

Final/ Net obligation statement download - Monday (T+2nd working day)

Settlement day (SD 2) - next Thursday (T+5th working day)

Auction trade day (ATD 2) - next Friday (T+6th working day)

Auction settlement day (ASD 2) - Tuesday (2nd working day from auction

trade day i.e. T+8th working day)

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1.7 KEY PLAYERS IN THE INDUSTRY

There are huge number of players existing in the market. Some of the main

players have been briefed below

1.7.1 Religare

History of Religare Securities Ltd.Religare Securities Limited, a Ranbaxy

Promoter Group Company, was founded by late Dr. Parvinder Singh (CMD

Ranbaxy Laboratories Limited), with the vision of providing integrated financial

care driven by the relationship of trust & confidence.

It is a diversified financial services group with a pan-India presence and presence

in multiple international locations, Religare Enterprises Limited ("REL") offers a

comprehensive suite of customer-focused financial products and services

targeted at retail investors, high net worth individuals and corporate and

institutional clients.

REL, along with its joint venture partners, offers a range of products and services

in India, including asset management, life insurance, wealth management, equity

and commodity broking, investment banking, lending services, private equity and

venture capital.

REL, through its subsidiaries, has launched India's first holistic arts initiative -

with a gallery - as well as the first SEBI approved film fund, which is an initiative

towards innovation and spotting new opportunities for creation and maximization

of wealth for investors.

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Presently, the company is headed by Mr. Sunil Godhwani who is CEO and

managing director of the company. It has its registered and corporate office in

New Delhi and it operates from seven domestic regional offices, 43 sub-regional

offices, and has a presence in 498 cities and towns controlling 1,837 business

locations all over India with a workforce of over 9500 people.

Pursuant to expansion of REL's business, the company has grown from largely

an equity trading company into a diversified financial services company. With the

addition of RHH the REL group now operates out of multiple global locations,

other than India, (the UK, the USA, Brazil, South Africa, Dubai and Singapore).

Among the leading service provider in Capital Market In a span of less than five

years of its retail operations, RSL recorded a healthy growth rate both in

business volumes and profitability. In recent times, the market share has

increased from 3.46% in Q4 FY08 to 3.86% Q1 FY09. Major portion of earning

were contributed by broking related activities and for the first quarter of FY09, it

accounted for 40% of revenues. Quarterly Total Revenue recorded at Rs.

2,887.49 mn, EBIDTA at Rs. 1,184.17 mn and Profit after tax at Rs. 36.68 mn

1.7.2 Angel Broking

Angel Broking's tryst with excellence in customer relations began in 1987. Today,

Angel has emerged as one of the most respected Stock-Broking and wealth

management companies in India. With its unique retail-focused stock trading

business model, it is committed to providing ‘Real Value for Money’ to all its

clients.

Page | 22

Angel broking ltd. already has a good presence in India and offers world-class

financial planning and a wide range of wealth management products to mass

affluent and affluent customer segments. Angel Broking limited provides a

complete range of financial products and services that include equity broking

(internet based online trading as well as offline trading), financial planning,

insurance, investment products, equity research, demat account and more.

It is one of the leading and professionally managed stock broking firm involved in

quality services and research. The membership of the company with The Stock

Exchange Mumbai was originally in the name of Mukesh R. Gandhi, which was

eventually turned into a corporate membership in the name of Angel Broking

Limited. Angel Broking Limited is managed by Mr. Dinesh Thakkar, founder

chairman and managing director and he is well supported by Mr. Mukesh

Gandhi, a fifteen years veteran in the market.

The group is well supported by a professional and qualified research team and

efficient operations and back office team, which comprises of highly dedicated

and qualified individuals. It has an in-house, state of art research department.

Angel Broking Limited is primarily into retail stock broking, with a customer base

of retail investors, which has been increasing at a CAGR of 100% every year.

The company has huge network sub-brokers in Mumbai and other places outside

Mumbai, registered with SEBI, who act as Chanel partners for the company. The

company presently has total staff strength of around 150 employees who are

spread accordingly across the head office and all the branches.

It has also empowered its physical presence throughout India through various

strategies which it has been adopting efficiently and effectively over a period of

time, like opening up of branches at various places, tie-ups with various agencies

and sales agents, buy-outs of smaller regional outfits and appointment of sub-

brokers and franchisees. Moreover, Angel has been tapping and including high

net worth and self-employed individuals it its vast array of clients.

Page | 23

Angel has always strived in the direction of delivering ultimate client satisfaction

and developing stronger bonds with its customers and chose partners. Angel has

a vision to introduce new and innovative products and services regularly.

Moreover, Angel has been one among the pioneers to introduce the latest

technological innovations and integrate it efficiently within its business.

1.7.3 Karvy

Karvy Consultants Limited was established in 1982 at Hydrabad. It was

established by a group of Hydrabad-based practicing Chartered Accountants. At

initial stage it was very small in size. It was started with a capital of Rs. 1,50,000.

In starting it was only offering auditing and taxation services. Later, it acts into the

Registrar and Share transfer activities and subsequently into financial services

and other services like Financial Product Distribution, Investment Advisory

Services, Demat Services, Corporate Finance, Insurance etc.

All along, Karvy’s strong work ethics and professional background leveraged with

Information Technology enabled it to deliver quality to the individual. A decade of

commitment, professional integrity and vision helped. Karvy achieving a

leadership position in its field when it handled largest number of corporate and

retail that 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 evolved as a veritable link between industry, finance and

Page | 24

people. An ISO 9002 Company, Karvy’s commitment to quality and retail reach

has made it an Integrated Financial Services Company.

Karvy ranks among the top player in almost all the fields it operates. Karvy

Computershare Limited is India’s largest Registrar and Transfer Agent with a

client base of nearly 500 blue chip corporates, managing over 2 crore accounts.

Karvy Stock Brokers Limited, member of National Stock Exchange of India and

the Bombay Stock Exchange, ranks among the top 5 stock brokers in India. With

over 6,00,000 active accounts, it ranks among the top 5 Depositary Participant in

India, registered with NSDL and CDSL. Karvy Comtrade, Member of NCDEX and

MCX ranks among the top 3 commodity brokers in the country. Karvy Insurance

Brokers is registered as a Broker with IRDA and ranks among the top 5

insurance agent in the country. Registered with AMFI as a corporate Agent,

Karvy is also among the top Mutual Fund mobilizer with over Rs. 5,000 crores

under management. Karvy Realty Services, which started in 2006, has quickly

established itself as a broker who adds value, in the realty sector. Karvy Global

offers niche off shoring services to clients the US.

Karvy has 575 offices over 375 locations across India and overseas at Dubai

and New York. Over 9,000 highly qualified people staff The company adds 5 new

offices every month to the company’s ever growing national network in every

nook and corner of the country. The company service over 16 million individual

investors, 180 corporate and handle corporate disbursements that exceed

Rs.2500 Crores.

Page | 25

1.7.4 Motilal Oswal

Motilal Oswal Securities Ltd. (MOSL) was founded in 1987 as a small sub-

broking unit, with just two people running the show. Focus on customer-first-

attitude, ethical and transparent business practices, respect for professionalism,

research-based value investing and implementation of cutting-edge technology

has enabled us to blossom into an almost 2000 member team.

Today it is a well diversified financial services firm offering a range of financial

products and services such as Wealth Management, Broking & Distribution,

Commodity Broking, Portfolio Management Services, Institutional Equities,

Private Equity, Investment Banking Services and Principal Strategies. 

It has a diversified client base that includes retail customers (including High Net

worth Individuals), mutual funds, foreign institutional investors, financial

institutions and corporate clients. We are headquartered in Mumbai and as

of June 30th, 2009, had a network spread over 555 cities and towns comprising

1,308 Business Locations operated by our Business Partners and us. As at June

30th, 2009, we had 5,57,373 registered customers.

Motilal Oswal Securities Ltd. enters 'Limca Book of Records' for creating India's

largest dealing room in Mumbai. It was 'Rated No.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

1.7.5 Kotak Securities

Page | 26

Kotak Securities Limited, a 100% subsidiary of Kotak Mahindra Bank, is the stock

broking and distribution arm of the Kotak Mahindra Group. Kotak Mahindra is one

of India's leading financial institutions, offering complete financial solutions that

encompass every sphere of life. From commercial banking, to stock broking, to

mutual funds, to life insurance, to investment banking, the group caters to the

financial needs of individuals and corporate. Kotak also offers stock broking

through the branch and Internet, Investments in IPO, Mutual funds and Portfolio

management service.

Kotak Mahindra is one of India's leading financial conglomerates, offering

complete financial solutions that encompass every sphere of life. The group has

a net worth of over Rs. 5,609 crore, employs around 17,100 people in its various

businesses and has a distribution network of branches, franchisees,

representative offices and satellite offices across 344 cities and towns in India

and offices in New York, London, Dubai, Mauritius and Singapore. The Group

services around 3.6 million customer accounts. Kotak Securities has 195

branches servicing more than 2, 20,000 customers and coverage of 231 Cities.

Kotaksecurities.com, the online division of Kotak Securities Limited offers

Internet Broking services and also online IPO and Mutual Fund Investments.

1.7.6 India Infoline

Page | 27

India Infoline Ltd is listed on both the leading stock exchanges in India, viz. the

Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE). The

India Infoline group, comprising the holding company, India Infoline Ltd and its

subsidiaries, straddles the entire financial services space with offerings ranging

from Equity research, Equities and derivatives trading, Commodities trading,

Portfolio Management Services, Mutual Funds, Life Insurance, Fixed deposits

and other small savings instruments to loan products and Investment banking.

India Infoline also owns and manages the websites.

India Infoline Limited is listed on both the leading stock exchanges in India, viz.

the Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE) and

is also a member of both the exchanges. It is engaged in the businesses of

Equities broking, Wealth Advisory Services and Portfolio Management Services.

It offers broking services in the Cash and Derivatives segments of the NSE as

well as the Cash segment of the BSE. It is registered with NSDL as well as CDSL

as a depository participant, providing a one-stop solution for clients trading in the

equities market. It has recently launched its Investment banking and Institutional

Broking business

Page | 28

Chapter 2 - COMPANY PROFILE

2.1 Introduction

Reliance Money is promoted by Reliance Capital; one of India's leading and

fastest growing private sector financial services companies, ranking among the

top 3 private sector financial services and banking companies, in terms of net

worth. Reliance Money is a part of the Reliance Anil Dhirubhai Ambani Group.

It is a one-stop-shop, providing end-to-end financial solutions (including mobile

and web-based services).  It has the largest non-banking distribution channel

with over 10,000 outlets and 20,000 touchpoints spread across 5,165 cities/

towns; catering to the diverse needs of over 3 million existing customers.

Reliance Money is a comprehensive electronic transaction platform offering a

wide range of asset classes. Reliance Money endeavors to change the way

investors transact in financial markets and avails financial services. It provides

customers with access to Equity, Equity and Commodity Derivatives, Offshore

Investments, Portfolio Management Services, Wealth Management Services,

Investment Banking, Mutual Funds, IPOs, Life and General Insurance products

and Gold Coins. Customers can also avail Loans, Credit Card, Money Transfer

and Money Changing services. Reliance Capital Ltd. has also interests in asset

management, life and general insurance, private equity and proprietary

investments, stock broking and other financial services.

In addition to the home-grown portfolio of products and services that Reliance

Money has to offer, Reliance Money also distributes a variety of third party

financial products. It also assists millions of investors in creating customized

individual portfolios based on their diverse investment needs and risk profiles

Page | 29

Reliance Money is the largest broker and distributor of financial products in India

with the largest distribution network and almost over 3,174 employees. Money

has increased its market share among private financial companies to nearly

Convenient & effective – Anytime & anywhere financial transaction

2.2 Vision

To build a global enterprise for all our stakeholders, and

A great future for our country,

To give millions of young Indians the power to shape their destiny,

The means to realize their full potential…

2.3 Mission

To create and nurture a world-class, high performance environment aimed at

delighting our customers by providing endless financial products in all part of the

country.

2.4 Success sutras of Reliance Money

The success story of the company is driven by 8 success sutras adopted by it

namely:

1. Trust

2. Integrity

3. Dedication

4. Commitment

5. Enterprise

6. Hard work and Team play

7. Learning and Innovation,

8. Empathy and Humility.

These are the values that bind success with Reliance Money

Page | 30

2.5 Achievements

2.5.1 List of recent achievements

In two successive joint surveys by The Economic Times’ Brand Equity and

ACNielsen, Reliance was recognized as India’s Most Trusted Mutual

Fund.

The company also walked away with seven other scheme prizes – five of

them being outright winners – in the Gulf 2007 Lipper Awards. These

included the Fund House of the Year by Lipper GCC as well as ICRA

Online and the Most Improved Fund House by Asia Asset Management.

It also received the NDTV Business Leadership Award 2007 in the mutual

fund category and runners’ up recognition as the Best Fund House in the

Outlook Money-NDTV Profit Awards.

In addition, the company received the coveted CNBC Web18 Genius of

the Web distinction for the Best Mutual Fund Website in the country.

RCAM was awarded the India Onshore Fund House 2008 instituted by the

Asian Investor magazine.

The company also won the India Equities award in the 5-yearPerformance

category.

2.5.2 Other achievements

• Reliance Money generated revenues of Rs. 35 billion (US$ 767 million) for the

year March 31, 2009 as against Rs. 24 billion of the corresponding previous

period, an increase of 48%. It also achieved a net profit of Rs. 368 million (US$ 8

million) for the same period, as against a net profit of Rs. 1 million for the

corresponding previous period

Page | 31

• Reliance Money is the one of the leading brokerage and distributor of financial

products in India with more than 3 million customers

• Reliance Money has tied up with global partners like Reuters, Vasco, Valcambi,

Webaroo, optionsXpress Holdings, Goldride Securities, World Gold Council,

Wincor Nixdorf and DBS Vickers to facilitate better access to wider world class

choices to its customers

• It is amongst the leading Mutual fund distributors of the country distributing

products of 20 AMCs. It is the the largest private sector partner for Western

Union Money Transfer in India

• To further improve its position in the money changing and money transfer

business, Reliance Money has acquired a significant share holding in Wall Street

Finance Ltd, a leading provider of money changing and money transfer services

in the Country

• Reliance Money has tied up with Kuoni India and plans to retail its forex

products/services through the national network of over 70 Kuoni outlets

• Reliance Money has tied up with India Post and World Gold Council to sell gold

coins through the post office network across the country

• Reliance Money has obtained Category I Merchant Banking License from the

Securities and Exchange Board of India. This new license allows Reliance

Money to provide a wide range of investment banking services such as Issue

Management, Underwriting, Private Equity Advisory/ Syndication and Corporate

Finance services in India

• Reliance Money is taking its first steps into the Commodities Exchange

business and is in the process of acquiring a 15 per cent stake in Hong Kong

Page | 32

Mercantile Exchange (HKMEx). With this holding, Reliance Money becomes the

second-largest shareholder in the commodity exchange and will have a board

membership. Reliance Money is the first Indian firm to acquire a stake in an

international exchange

• It has also obtained approval from the Ministry of Consumer Affairs for acquiring

10% stake in the National Multi-Commodity Exchange of India Ltd. (NMCE).

Page | 33

Basic structure of Reliance ADA group

Chart 2.1

Page | 34

Organizational Structure

Chart 2.2

Page | 35

CEO

Head of sales

Nationalhead

National head

Zonal head

zonal head

Regional head

Regional head

Area Head

Area head

Cluster head

Cluster head

Center manager

Center manager

Assistant centre

manager

Assistant centre

manager

Team leader

Team leader

BDE BDE BDE BDE

Working At Branch level

Reliance Money Chandigarh (Branch office)

Chart 2.3

2.6 Staff at Branch Level

At Reliance Money Chandigarh, the following hierarchy exists:-

Three Centre managers.

Eight to ten Business Development Executives under each Centre

manager.

Business associates under each Centre Manager their number depending

upon the area allotted to each CM.

Remisars under each centre manager.

Team leader and PFC”s under him for life insurance.

Page | 36

One Customer Support Executive and One Senior Finance executive.

2.6.1 Centre Manager

The Centre manager is the Heart of the office who acts as a connection between

Head office (Mumbai), National head, Zonal head, Regional head, Area head,

Cluster head, The Clients, Remisars, Business associates and the Business

development executives.

The Centre manager is responsible for the following functions;

1. Organizing all the BDE’s, Business Associates and Remisars under one

banner.

2. Making sure that the BDE’s, Business Associates and Remisars are

carrying out their functions well i.e. expanding the business in form of

selling the Share trading A/c’s , mutual funds, selling general along with

life insurance policies .

3. Planning strategies for increasing the business (i.e. installation of

canopies at the right place, appropriate advertising in different business

Expo’s or corporate meets. Etc.)

4. Interviewing and Selecting Business development executive for the

organization.

5. Identifying the potential agents in the market and making them the

business associate or remisar of Reliance Money for good business

prospects.

6. Assisting the new BDE’s or remisars in handling the clients.

7. Training the new BDE’s and the remisars about the product and how to

approach the clients.

8. Reporting the regional head on the daily basis about the daily business

performed.

Page | 37

2.7 Product Offering

Reliance Money currently deals in the following financial products:

2.7.1 Trading Portal

Online trading refers to buying and selling of the shares/stocks/contracts/bonds

with the use of internet. In this shares are not issued in physical form rather they

are transferred in the dematerialized form in the Demat account directly

.

Demat account

There are many broking houses doing business in India and they charge a

brokerage on every transaction made online or offline. (Buying and Selling are

treated as separate transaction). Reliance Money’s advantage over others is that

it’s charging the lowest brokerage in the market which is just 1 paisa on every

executive trade irrespective of the volume traded. Reliance Money, the

brokerage and distribution arm of Reliance ADA Group, aims to tap investors in

the smaller towns and cities through a flat fee structure.

The new wonder is Reliance Money's pre-paid card for stock market brokerage.

Reliance Money, the financial services division of Anil Dhirubhai Ambani Group-

promoted Reliance Capital, is bringing to the market pre-paid cards in

denominations of Rs500, Rs1,000, Rs. 2500, Rs. 5,000 and Rs.10,000.  

Target low level of retail penetration in India - less than 3 per cent of household

financing savings makes it into equity markets.

Page | 38

Reliance Money Demat Account Holders can trade in

Equities

Equity investment generally refers to the buying and holding of shares of stock

on a stock market by individuals and funds in anticipation of income from

dividends and capital gain as the value of the stock rises. It also sometimes

refers to the acquisition of equity (ownership) participation in a private (unlisted)

company or a startup (a company being created or newly created).

Commodities

A single platform to trade on both the major commodity exchanges i.e. NCDEX

and MCX. In addition In-house research desk shall provide research reports on

all major commodities which shall enable in getting views for trading and diversify

client’s holdings. Trade Execution assistance is also provided to clients.

Offshore Investments

Offshore investment is the keeping of money in a jurisdiction other than one's

country of residence. Offshore jurisdictions are a commonly accepted solution to

reducing excessive tax burdens levied in most countries to both large and small

scale investors alike. The advantage to this is that such operations are both legal

and less costly than the solutions offered in the investor's country - or "onshore".

Offshore solutions are accessible to anyone who can meet the minimum

investment amount or pay the obligatory fees required to open such an entity.

Another reason why 'offshore' investment is superior to 'onshore' investment is

because it is less regulated, and the behavior of the offshore investment

provider, whether he be a banker, fund manager, trustee or stock-broker, is freer

than it could be in a more regulated environment. Reliance Money has already

tied-up with CMC Capital Plc UK to offer offshore Investment products to Indian

consumers as per guidelines.

Page | 39

How reliance money scored over others?

1. Two way authentication: Reliance offers its customers with a token (an

electronic gadget) that generates a password, which are a third level of security

in addition to the customer log in and a password provided. The password

generated by the token is valid only for a period of 20 seconds. If the web page

expires, for the fresh login, a new password generated by the token has to be

keyed in by the customer.

2. Lowest brokerage: Reliance offers the lowest brokerage of 1 paisa which

is very less with respect to the other DPs in the market.

3. User friendly software: The portal offered is very easy to understand and

use.

4. Better research and news: Reliance offers news from the DOW JONES

and REUTERS.

Seeking to bring share trading closer to consumers just like ATMs, Reliance

Capital's stock brokerage arm Reliance Money launched Internet trading services

through web-enabled retail kiosk.

Page | 40

Reliance Money Provide the kiosks (similar to ATM’s) Facilities, to their customer

through which the customers can trade on available kiosks at the particular

Branch of Reliance Money. The company are going to open these kiosks in the

market as the ATM’s of the Banks

Reliance Money share trading account

Reliance Money unlike other brokering houses has introduced a new prepaid

system of brokerage for the share trading in which it provides the lowest form of

brokerage charged from an investor.

Trading Plans Offered By Reliance Money

Target

Investor

Access Fee

(Rs.)

Validity (whichever is earlier) Turnover Limit

Time

Validityor

Turnover

Validity

Non-delivery

Turnover

Delivery

Turnover

Small 500 12 months or Rs. 1 lac Rs. 2 Lac

Large 1000 2 months or Rs. 1 cr Rs. 90 lac Rs. 10 Lac

Large 2500 6 months or Rs. 2 Cr Rs. 2.7 Cr Rs. 30 Lac

Large 5000 12 months or Rs. 7 Cr Rs. 6.3 Cr Rs. 70 lac

Large 100000 12 months or Rs. 20 Cr Rs. 18 Cr Rs. 2 Cr

Table 2.1

Following are also the main features of this share trading account provided by

Reliance money:-

1. Flexibility to access reliance money services in multiple ways through

Internet, Transaction kiosks, Call and transact or seek assistance through

Business partners.

Page | 41

2. This is a safeguarded account as reliance money provides an electronic

token that flashes a unique security number in every thirty two seconds.This

number works as a third level password (including the login ID and Password)

keeping the account sage from any unauthorized access.

3. Flexibility to transact in Equity, Equity and commodity Derivatives, Offshore

investments, mutual funds, IPO’s, Life insurance and General Insurance either

through online or through channel partners.

4. With the help of this A/c investors can access to their banking, trading and

Demat accounts without the hassle of writing cheques. Reliance money had tied

up with UTI, HDFC and IDBI bank to link this share trading account for the

investors.

These were some of the features of ‘Reliance money’ share trading account.

A customer can do the share trading through trading kiosks installed by Reliance

Money, through net, through business associates of R-Money.

2.7.2 Mutual funds

Page | 42

A mutual fund represents a vehicle for collective investment. When you

participate in a scheme of a mutual fund, you become a part-owner of the

investments held under that scheme. The most important characteristic of a

mutual fund is that the contributors and the beneficiaries of the fund are the same

class of people, namely the investors. The term “MUTUAL” means that investors

contribute to the pool, and also benefit from the pool. 

The money held in the trust is divided into shares of equal value called “UNITS”. 

Investors become “unit-holders” and are allocated units based on the amount of

their investment. The income earned through these investments and the capital

appreciation realized is shared by its unit holders in proportion to the number of

units owned by them. 

Investments in securities are spread across a wide cross-section of industries

and sectors and thus the risk is reduced. Diversification reduces the risk because

all stocks may not move in the same direction in the same proportion at the same

time. Mutual fund issues units to the investors in accordance with quantum of

money invested by them. Investors of mutual funds are known as unit holders.

Thus a mutual fund is the most suitable investment for the common man as it

offers an opportunity to invest in a diversified, professionally managed basket of

securities at a relatively low cost.  

Page | 43

2.7.2.1 Equity/Growth Schemes

The aim of growth funds is to provide capital appreciation over the medium to

long- term. Such schemes normally invest a major part of their corpus in equities.

Such funds have comparatively high risks. These schemes provide different

options to the investors like dividend option, capital appreciation, etc. and the

investors may choose an option depending on their preferences. The investors

must indicate the option in the application form. The mutual funds also allow the

investors to change the options at a later date. Growth schemes are good for

investors having a long-term outlook seeking appreciation over a period of time.

Some of the Equity/Growth schemes made available by Reliance Money are:

Reliance Growth Fund

Reliance Vision Fund

Reliance NRI Equity Fund

Reliance Equity Opportunities Fund

Reliance Index Fund

Reliance Tax Saver Fund

Reliance Equity Fund

2.7.2.2 Debt/Income Schemes

The aim of income funds is to provide regular and steady income to investors.

Such schemes generally invest in fixed income securities such as bonds,

corporate debentures, Government securities and money market instruments.

Such funds are less risky compared to equity schemes. These funds are not

affected because of fluctuations in equity markets. However, opportunities of

capital appreciation are also limited in such funds. The NAVs of such funds are

affected because of change in interest rates in the country. If the interest rates

fall, NAVs of such funds are likely to increase in the short run and vice versa.

However, long term investors may not bother about these fluctuations.

Page | 44

Some of the Debt/Income schemes made available by Reliance Money are:

Reliance Income Fund

Reliance Medium Term Fund

Reliance Short Term Fund

Reliance Liquid  Fund

Reliance Monthly Income Plan

Reliance Gilt Securities Fund

Reliance Floating Rate Fund

Reliance NRI Income Fund

2.7.2.3 Sector Specific Schemes

These are the funds/schemes which invest in the securities of only those sectors

or industries as specified in the offer documents. e.g. Pharmaceuticals, Software,

Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in

these funds are dependent on the performance of the respective

sectors/industries. While these funds may give higher returns, they are more

risky compared to diversified funds. Investors need to keep a watch on the

performance of those sectors/industries and must exit at an appropriate time.

They may also seek advice of an expert.

Some of the sector specific schemes made available by Reliance Money are:

Reliance Banking Fund

Reliance Pharma Fund

Reliance Media and Entertainment Fund

Reliance Diversified Power Sector Fund

Page | 45

2.7.3 Porfolio management services

Types of portfolio management sevices offered are:

2.7.3.1 Growth Fund

A Moderate fund with growth approach and investments predominantly in large-

cap stocks. The objective is to ensure liquidity and lower impact cost leading to

the construction of a relatively more stable portfolio. The portfolio management

process will also focus on using cash as an investment tool and derivatives for

protection of portfolio.

Investment Objective – Generate capital appreciation in medium to long term

through investments in equities and equity related instruments comprising of

predominantly large cap companies. This scheme will be benchmarked to the

Nifty 50 stocks.

Parameters Driving Investment Decision – The portfolio strives at all times to

achieve an overall 70% allocation to large cap companies. Again the portfolio will

limit the exposure to any sector to be less than 25% of the portfolio size and to

any scrip to be less than 10%.

2.7.3.2 Value Fund

A highly flexible investment option, which offers a diversified investment portfolio

across both large-cap and mid-cap stocks. This option follows a moderately

aggressive approach to portfolio construction. The portfolio management process

will also focus on using cash as an investment tool and derivatives for protection

of portfolio.

Page | 46

Investment Objective – The objective of this scheme is wealth creation by

delivering superior returns over long term (18 months) through investments in

value & growth stocks. This will be benchmarked with BSE 200.

Reliance Money has launched portfolio management services (PMS), where

managers will create a basket of stocks for each client, based on individual

needs, for amounts as low as Rs5 lakh.

Such services are popular in India but almost all the offerings of large finance

companies target high networth individuals (HNIs) with the ability to invest Rs1

crore and above.

Reliance Money, which helps clients invest in equities, derivatives and

commodities, typically offers such services for amounts between Rs5 lakh and

Rs75 lakh; Rs5 lakh is the smallest amount the industry’s regulator mandates for

PMS. Reliance Money would not take a fee unless the portfolio earns a return

higher than 8%. If the client earns a return of 8-20%, the fee charged will be 10%

of the absolute returns and if the client earns more than 20%, the fee will be

20%.

The company offer a large-cap investment portfolio (where the stocks invested in

will be those of large-cap companies), blue chip portfolio (blue chip companies)

and an infrastructure portfolio (companies in the infrastructure sector)

2.7.4 Gold Coins

Reliance money has Introduced “Pure Swiss Gold Coins”, a welcome addition to

Reliance Money’s large offering of Financial Investments. Gold not only acts as a

secure investment, but is an efficient store of value offering high security &

credibility. An instrument of long term investment, Gold acts as a hedge against

Page | 47

inflation besides providing high liquidity. Most Indians share an emotional bond

with Gold nearly Bordering with God.

But in a highly disorganized Gold market, the purity aspect and thereby the value

for one’s Money during the purchase of Gold has always been a question mark.

For the customer, the lack of access to a branded, affordable, reliable Gold coin

has always been a matter of concern.

Reliance aims to bridge this gap by giving 99.99% pure, 24 carat, Swiss Gold

coins through its distribution network. Available in 0.5g, 1g, 5gm and 8gm

denominations, these 24 carat, 99.99% pure, internationally certified Gold coins

cater to a large segment of the society in both the retail and the corporate world.

Available in tamper proof packaging, the overall look and feel of these coins is far

superior & they possess a great finish. These Gold coins are Ideal for customers

or corporates to be used as a gifting idea, for retail/agent contests, as employee

rewards etc. Retail customers buy these coins just for the pleasure of owning it or

as an investment idea.

2.7.5 LIFE INSURANCE

"Insurance is a contract between two parties whereby one party called insurer

undertakes in exchange for a fixed sum called premiums, to pay the other party

called insured a fixed amount of money on the happening of a certain event."

Life Insurance policies have been categorized in the following manner:

1. Solution for individuals

2. solution for groups

Page | 48

Under the head of solution for individual there are four bifurcations

PROTECTION PLANS

1. Term Plan 7. Special Endowment Plan

2. Simple Term Plan 8. Connect To Life Plan

3. Special Term Plan 9. Whole Life Plan

4. Credit Guardian Plan 10. Wealth + Health Plan

5. Special Credit Guardian Plan 11. Cash Flow Plan

6. Endowment Plan 12. Special Cash Flow Plan

RETIREMENT PLANS

1

. Total Investment Plan II – Pension 4. Wealth + Health Plan

2. Super Golden Years Plan 5. Automatic Investment Plan

3. Super Golden Years Plan- Plus 6. Money Guarantee Plan

SAVING AND INVESTMENT PLAN

1. Super Invest Assure Plus Plan 9. Endowment Plan

2. Super Invest Assure Plan 10. Special Endowment Plan

3. Total Investment Plan I – insurance 11. Whole Life Plan

4. Wealth + Health Plan 12. Super Golden Years Plan - Value

5. Super Automatic Investment Plan 13. Super Golden Years Plan - Plus

6. Money Guarantee Plan 14. Connect To Life Plan

7. Cash Flow Plan 15. Imaan Investment Plan

8. Super Market Return Plan 16. Saving Linked Insurance Plan

Page | 49

CHILD PLANS

1. Child Plan 3. Wealth + Health plan

2. Secure Child Plan 4. Super InvestAssure Plan

Under the Head of Solution for Groups, there are three bifurcations:

EMPLOYER LIABILTY

SOLUTION

1. Group Superannuation

2. Group Gratuity

3. Group Leave Encashment Plan

EMPLOYEE VOLUNTARY BENEFITS 1. Group Saving Linked insurance

EMPLOYEE PROTECTION SOLUTION1. Group Credit Shield Plan

2. Group Term Assurance Plan

3. Group Term Insurance Plan – EDLI

Other than above mentioned plans, Reliance has tie-up with many insurance

companies like ING Vysya, Kotak , ICICI prudential, HDFC standard life

insurance etc.

Reliance Money also offers life insurance policies of all the above mentioned

companies other than its own life insurance products.

Page | 50

2.7.6. GENERAL INSURANCE

It has also been categorized in the following manner:

2.7.6.1 For individuals

HEALTH INSURANCE1. Health Wise Policy

2. Individual Mediclaim Insurance Policy

MOTOR INSURANCE

1. Two Wheeler Insurance Policy.

2. Private Car Insurance Policy

HOME INSURANCE

1. Home Protect Policy

2. Householder’s Package Policy

TRAVEL INSURANCE

1. Travel Care Insurance Policy For Individuals And

Families

2. Travel Care Insurance Policy For Students

3. Travel Care Insurance Policy- Asia

4. Pravasi Bhartiya Bima Yojana Insurance Policy

ACCIDENT COVER

INSURANCE

1.Individual Personal Accident Policy

2.7.6.2 For Corporates

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FIRE

INSURANCE

1. Standard Fire And Special Perils Policy

2. Consequential Loss Policy

3. Industrial All Risks Policy

ENGINEERING

INSURANCE

1. Erection All Risks/ Stormage-cum-Erection

insurance Policy

2. Contractor’s All Risks insurance Policy

3. Contractor’s Plant and Machinery Policy

4. Machinery Loss Of Profits Insurance Policy

5. Boiler and Pressure Plant Insurance Policy

6. Electronic Equipment Insurance Policy

7. Machinery Insurance Policy

MARINE

INSURANCE

1.Marine Cargo Insurance Policy

LIABILITY

INSURANCE

1. Directors and Official Liability Policy

2. Workmen’s Compensation Insurance Policy

3. Professional Indemnity Insurance Policy

4. Product Liability Insurance Policy

5. Public Liabilty Insurance Policy

6. Public Liability(Act) Insurance Policy

PACKAGES

INSURANCE

1. Office Package Policy

2. Commercial Care Insurance Policy

3. Industry Care Insurance Policy

4. Shopkeeper’s Package Policy

2.7.6.3 Other miscellaneous plans

1. Money Insurance Policy

2. Burgulary and House Breaking Insurance Policy

3. Fidelty Guarantee Insurance Policy

Page | 52

The above mentioned products belong to reliance general

insurance but reliance money is also engaged in selling general

insurance policies of other companies like Chola mandalan, IFFCO TOKYO etc.

2.7.7 Consumer finance

2.7.7.1 Personal loans

Easy and hassle-free personal loans at attractive interest rates are offered up to

INR 17, 00,000 and which can be repaid in flexible EMIs. One can also avail a

personal loan on the basis of his/her repayment track record of an existing loan.

2.7.7.2 Home loans

Reliance also offers offer housing finance to fulfill myriad requirements. These

home loans have been customized to meet individual needs and desires.

Attractive interest rates with best-in-class features and benefits make the

experience even more pleasant. The simple EMIs as per the tenor you choose,

makes paying back your loan an absolute breeze. Whether one is a salaried

professional, self-employed professional or a self-employed non-professional,

housing loans are designed to meet your unique requirements.

2.7.7.3 Car loans

With flexible monthly repayment option, one can repay the auto finance up to 7

years for finanace taken for both new car loans and used car loans. It

alsoconsider the ‘on-road value’ of the vehicle for funding, i.e. it covers not just

the insurance but also the road tax.

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2.7.7.4 SME and Business loans

1. Business Line of Credit

2. Commercial Loans.

3. Expansion of business

4. Working capital loans

2.7.8 Money Transfer and Money Changing

Reliance Money has given new brand identity for Travelmate Services and is

dealing in Money Changing Services and Full-Fledged MoneyTransfer Business

India is the largest recipient of global remittance of around $ 27 billion which is

more than 10 percent of the total global remittance inflow of $ 240 billion. This is

continuously rising due to labor migration

Currently Reliance Money Express operates through a network of 3400 outlets

spread over 800 cities and towns across India and handling close to 100,000

transactions per month with a daily average inward remittance of USD 1.4

million.

2.7.9 Fixed Deposits

Reliance Money is also involved in availing its customers facility of fixed deposits.

Currently, it is making available fixed deposits for the following banks:

HDFC Deposits

HDFC Premium Deposits

ICICI Home Finance

Mahindra and Mahindra Finance

Page | 54

FINANCIAL PERFORMANCE

(Rs. Million)

PARTICULARS Q4 FY09 QYFY08 FY09 FY08

Broking Income 379 581 1,762 1,112

Distribution Income 153 583 879 1,062

Others 253 64 880 211

Total Income 785 1,227 3,520 2,385

Sub Brokerage 89 293 421 440

Personnel Costs 303 181 1,150 602

Other Expenses 450 602 1,369 1,342

Profit Before Tax (56) 131 581 1

Profit After Tax (106) 131 368 1

Table 2.2

2.8 Discussion of financial performance

Reliance Money generated revenues of Rs. 35 billion (US$ 767 million) for

the year ended March 31, 2009 as against Rs. 24 million of the

corresponding previous period, an increase of 48 %. This increase was

primarily due to the expansion of the distribution network and increase in

its customer base

Page | 55

The revenue mix is well balanced with broking contributing to 50% of the

total revenues and distribution of financial products & other services

(money transfer, currency changing & precious metal retailing) contribute

to the balance 50%

It achieved a net profit of Rs. 368 million (US$ 8 million) for the year

ended March 31,2008, as against a profit of Rs. 1 million of the

corresponding previous period

Reliance Money generated revenues of Rs.352 crore for the year ended

March 31, 2009, as against Rs.239 crore – an increase of 47 per cent

Scale of operations

PARTICULARSAs at Mar 31st,

2009

As at Mar 31,

2008

No. of outlets 10350 8512

Franchisees 10125 8279

Owned 225 233

No. of broking accounts 1010000 713636

Total No. of customers 3300000 2000000

Daily average stock exchange turnover (rs. Billion) 15 15

Table 2.3

Page | 56

.

2.9 Corporate Governance

Reliance Money has a vision of being a leading player in the Mutual Fund

business and has achieved significant success and visibility in the market.

However, an imperative part of growth and visibility is adherence to Good

Conduct in the marketplace. At Reliance Money, the implementation and

observance of ethical processes and policies has helped us in standing up to the

scrutiny of our domestic and international investors.

2.10 Management

The management at Reliance Money is committed to good Corporate

Governance, which includes transparency and timely dissemination of

information to its investors and unit holders. The Board of Directors of RCAM is a

professional body, including well-experienced and knowledgeable Independent

Members. Regular Audit Committee meetings are conducted to review the

operations and performance of the company.

2.11 Employees

Reliance Money has at present, a code of conduct for all its officers. It has a

clearly defined prohibition on insider trading policy and regulations. The

management believes in the principles of propriety and utmost care is taken

while handling public money, making proper and adequate disclosures. All

personnel at Reliance Money are made aware of their rights, obligations and

duties as part of the Dealing Policy laid down in terms of SEBI guidelines. They

are taken through a well-designed HR program, conducted to impart work ethics,

Page | 57

the Code of Conduct, information security, Internet and e-mail usage and a host

of other issues.

One of the core objectives is to identify issues considered sensitive by global

corporate standards, and implement policies/guidelines in conformity with the

best practices as an ongoing process. Reliance Capital Asset Management Ltd.

gives top priority to compliance in true letter and spirit, fully understanding its

fiduciary responsibilities.

2.12 Social Responsibilities

“Organizations, like individuals, depend for their survival, sustenance and growth

on the support and goodwill of the communities of which they are an integral part,

and must pay back this generosity in every way they can.”

This ethical standpoint, derived from the vision of the founder, lies at the heart of

the CSR philosophy of the Reliance Group.

While they strongly believe that their primary obligation or duty as corporate

entities is to their shareholders – they are just as mindful of the fact that this

imperative does not exist in isolation; it is part of a much larger compact which

they have with their entire body of stakeholders: From employees, customers

and vendors to business partners, eco-system, local communities, and society at

large.

They evaluate and assess each critical business decision or choice from the

point of view of diverse stakeholder interest, driven by the need to minimize risk

and to pro-actively address long-term social, economic and environmental costs

and concerns. For them, being socially responsible is not an occasional act of

charity or that one-time token financial contribution to the local school, hospital or

environmental NGO. It is an ongoing year-round commitment, which is integrated

into the very core of their business objectives and strategy.

Page | 58

Because they believe that there is no contradiction between doing well and doing

right. Indeed, “doing right is a necessary condition for doing well”.

Each of Reliance Capital’s different businesses vigorously implement their own

CSR initiatives. Indeed, their CSR efforts are counted when calculating the

business’s performance for the year. Some of the work done by them include:

1. Blood donation camps—in Mumbai, but also in other cities such as

Bangalore, Chennai, and Hyderabad.

2. Donating old computers to local schools in Navi Mumbai.

3. Celebrating Independence Day with the less privileged—street children

are taken to amusement parks, donations are given to NGOs working with

children or the aged or to the Missionaries of Charity. Again, this is done

across the country from Raipur to Jaipur, from Kolkata to Chandigarh.

4. Similar initiatives are undertaken on Diwali or on Christmas.

5. Bihar was stuck by calamitous flooding last year. Reliance Capital

employees working with their businesses generously donated clothes and

money for the relief effort.

6. Direct cash aid for paying the medical expenses of life-threatening

requirements for some under-privileged people is also done by one of the

businesses

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2.13 Top Management Profile

Sudip Bandyopadhyay, 45 is the Managing Director of Reliance Money. He has

been with Reliance Capital since May 2005 and spearheads its broking,

distribution, OTC (over-the-counter) and exchange business, under the brand,

Reliance Money. He has been responsible for making Reliance Money into

India's largest broking and distribution house in three years.

Sudip has been instrumental in taking Reliance Money international through

various innovative tie-ups and acquisitions. Sudip was also responsible for the

acquisition of AMP Sanmar that launched Reliance's foray in the Life Insurance

segment.

He has 22 years of experience in the financial sector. Prior to joining Reliance

Capital, Sudip was heading Treasury and Investment at ITC. A Charted

Accountant and Cost Accountant by profession, Sudip started his career as a

management trainee with Hindustan Unilever.

An avid reader, Sudip believes that books have played a key role in shaping his

life and making him the person he is today. He attributes his success to his

learnings from books such as Pather Panchali, Overload, Moneychangers, etc.,

read by him during various phases of his life

.

Page | 60

2.14 SWOT Analysis

Strengths

One of India’s leading and fastest growing private sector financial services

companies, and ranks among the top 3 private sector financial services and

banking companies, in terms of net worth.

It is India’s first insurance company to be awarded the ISO 9001:2000

certification across all functions, processes, products and locations pan-

India. The quality assurance provides an edge over other players.

Company issued 36.57 Lac policies during the year as compared to 14.60

Lac in the previous year thereby registering a growth of 150%.

RGIC has been able to give highest ROI of 11.27% in last five years. The

net worth has doubled to Rs.4.94 billion from last year’s Rs.2.59 billion.

Excellent outreach with a large distribution network. It has 200 branches

across 171 cities and over 20,000 intermediaries. The setup provides the

company is very strong and very effective distribution network, and

consequently a strong penetration in the market.

Expert’s and research team to make strategies and products for company

as well as clients base to resolve the problem.

Capture the 17% of the Private Sector Share & 7% share of the General

Insurance Industry

Page | 61

Reserves and Surplus has increased five times to Rs.4.998 billion from

Rs.1.04 billion previous year.

The Company has earned Rs.1034 crore of New Premium Business in

Financial Year 2008 which is 41% share of the Private Sector Industry &

33% of the Industry as whole.

Company is ranked number one in the New Premium Business in Financial

Year 2008. Other than this, it maintains a good database of it existing and

potential customer, has a brand image and low pricing strategy

Reliance Money unlike other brokering houses has introduced a new

prepaid system of brokerage for the share trading in which it provides the

lowest form of brokerage charged from an investor.

Weaknesses

Dependence on fellow subsidiaries for various supplies.

-Extra control or interference from fellow subsidiaries.

Sudden expansion in year 2007-08 by establishing more than 125 branches

has increased operations and administration expenses due to which losses

incurred.

Due to the emphasis on recruiting young people in the company, staff is

inexperienced.

Clientage is not so loyal as compared to the clientage of other competing

companies in the same industry

Page | 62

The phenomenon of job hopping is very common in the company. So, the

problem of loyalty towards the company on behalf of the employees is a

major problmem

Opportunities

IRDA has removed controls on pricing in General Insurance business with

effect from 1st January, 2008. IRDA had notified that except for Motor Third

Party risks, all other new insurances and renewals effective on or after 1st

January, 2008, insurers shall be free to quotes rates of premium in

accordance with file and use guidelines.

General insurance industry in India has grown at 15% CAGR in terms of

gross premium collection.

The company has moved to 3rd position amongst Private Sector Insurers in

Financial Year 2008 & is ranked 7th amongst the Industry with 14 General

Insurance players.

In india, there is still a lot more market to be tapped which is getting

supported by increasing spending and thereby saving of people.

The mindset of people have also started changing. Now, they consider

trading as a good source of earning.

The entire workforce consists of mostly youngsters, which means they can

be encouraged and motivated to do good work because they have a long

way to go and most of them are eager to climb the ladder.

Page | 63

Threats

New Entrants

-Future General India Life Insurance Company Limited -Sep. 2007

-IDBI Fortis Life Insurance Company Ltd. –Dec 2007

-Bharti Axa General Insurance Company Ltd. -June 2008

New joint ventures (JVs) by industry giants

- Max India forms JVC with Bupa Finance to foray into Health Insurance

-Shriram Group is to enter General Insurance Market

Stiff competition from existing players in the market

Page | 64

Chapter 3 – Research Design

3.1 Statement of the problem

To understand the perception and behaviuor of investors and potential investors

this study has been conducted. In addition, attitude of investors towards Reliance

Money has also been considered. So, research has been carried on the title

“A study on trading behavior of investors at Reliance Money”

3.2 Need of the study

The need of the study arises because of the reason that a trainee must

understand the company, its achievements and tasks, products and services and

also to collect information about its competitors.

But the major focus was on making a customer profile for Reliance Money and

study the position of Reliance Money in the market as well as among its

competitors. In addition, investors were to be made aware about various

products and services offered by Reliance Money and checking the satisfaction

level of present customers

3.3 Objectives of the study

To create awareness about the products offered by Reliance Money in

the Market

To know about the investment preference or style of investors

To know about the awareness of demat account

To collect the real time information about preference level of customers

using Demat account and their inclination towards various other brokerage

firms e.g. Reliance Money, ICICI, Religare, Angel , Unicon, Sharekhan

etc.

Page | 65

As an intern at Reliance Money, to know about response of investors

towards Reliance Money

To know about the awareness of Reliance Money as a brand and services

offered

To know about the availability of Reliance Money Franchisee

To know about the satisfaction level among customers of Reliance Money.

3.4 Research methodology

3.4.1 Sources of Data (Primary & Secondary)

In this project work primary and secondary data sources of data has been used.

Primary data

Primary data is collected through observation, or through direct communication

or doing experiments. Under this, Survey method has been used.

For this report primary data was collected by personal interview with investors

and potential investors in different areas of Chandigarh. The data was collected

over a period of 6 days from 21th July to 26th July 2008.

Secondary data:

Secondary data refers to existing primary data that was collected by someone

else or for a purpose other than the current one. It means already available

through books, journals , magazines ,newspaper, websites.

Data has been collected through various websites the list of which has been

given in the end of report

Page | 66

3.4.2 Research Method or type of study

The Research method used is descriptive research.

Descriptive research, also known as statistical research, describes data and

characteristics about the population or phenomenon being studied. Descriptive

research answers the questions who, what, where, when and how.

In the present Research I have collected data through Survey of 150

respondents

3.4.3 Sampling plan

3.4.3.1 Sample unit

The sampling units are various areas of Chandigarh which have been

approached to collect data from different people

3.4.3.2 Sampling method

Sampling method used in this research is simple random sampling which is

also known as probability sampling. Under this sampling design every item of

universe has an equal chance of inclusion in sample. It is say to a lottery method.

3.4.3.3 Sample size

The size of the sample was restricted to 150, as to just get a quick analysis

3.4.4 Contact Method

Personal interview is used as a method of contacting people.

Page | 67

It is a market research technique for gathering information through face-to-face

contact with individuals. Personal interviews take place in a variety of settings-in

homes, at shopping malls, in a business office. This type of research is relatively

costly, because it requires a staff of interviewers, but it provides the best

opportunity to obtain information through probing for clearer explanations. It is

the best technique to use early on in the research process when the researcher

is not yet sure which questions need to be asked, because new and better

questions can come out of the dialogue

3.4.5 Data collection method

Research Instrument used in this research was Questionnaire.

A questionnaire is a formalized set of questions for eliciting information. It is one

of the most common instruments used for primary data collection.

The questionnaire can be administered in various ways. It can be administered

by means of a personal interviewer as well as by the telephone, Mail. Here, the

questionnaire was administered by a personal interview

3.4.6 Tools of analysis

For the proper analysis of data, Quantitative Technique such as percentage

method was used. In addition, Microsoft excel was also used for preparing charts

for deducing inferences.

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3.5 Limitation

Although full efforts have been made in the study but the following limitations

should be kept in the mind before making any conclusion:

Sample size was small in comparison of entire population (150)

The respondents may be biased or influenced by outside factors.

The time constraint was one of the major problems.

The respondents were limited and cannot be treated as the whole

population.

The accuracy of indications given by the respondents may not be consider

adequate.

The research has been conducted according to present market conditions

of recession, so the finding and inferences may not hold good for every

business cycle.

Page | 69

Chapter 4 - DATA ANALYSIS

4.1 Interest of respondents in investment

Table showing the number of persons interested in investment

Response Frequency Percentage

Yes 128 85

No 22 15

Table 4.1

Interpretation

The above table deals with interest of respondents in investment of funds. Out of

150 people taken into consideration for knowing in their interest investment, 128

said that they are interested in investment avenues while 22 of them did not

show any kind of interest in investment of funds available with them.

Page | 70

Yes85%

No15%

Chart 4.1

Inference

It can be deduced from here that majority of people are interested in investing

their money in various available schemes in market. However, some people are

still there who do not want to invest funds available with them. So awareness

needs to be spread among those who are not willing to invest their money. By

telling them various benefits which can be availed by making investment this can

be achieved. They should be introduced with products that suits their investment

needs

Page | 71

4.2 Percentage of annual income kept for investment

Table showing percentage of annual income kept for investment

Response Frequency Percentage

Upto 5% 20 16

Upto 10% 45 35

Upto 15% 33 26

Upto 20% 21 16

Above 20% 9 7

Table 4.2

Interpretation

This table tells about the amount of income people keep aside for investment

purposes. Out of 128 people who were interested in investment, majority of

people, that is, 45 respondents keep 10% of their income for investment and

people who invest upto 15% are also in good number. But there are very few

people who invest more than 20% of their income.

Page | 72

upto 5 %; 20

upto 10 %; 45upto 15 %; 33

upto 20 %; 21

above 20 %; 9

Chart 4.2

Inference

Therefore, it can be said that more than 1/3rdof respondents invest upto 10% of

their income and almost 1/4th of respondents employ upto 15% of their income in

investments. On this basis, around 60% of people invest 5% to 15% of their

income and this can be the target market for the players in the industry.

Page | 73

4.3 Classification of investors as per income category

Description of respondents as per income category

Response Frequency Percentage

Upper 22 17

Middle 94 74

Lower 12 12

Table 4.3

Interpretation

This table deals with the number of people belonging to different income

categories, i.e, upper, middle and lower. Out of 128 people who are interested in

investing activities, 94 of them belong to middle class. Majority of respondents

who are interested in investment belong to middle class.

Page | 74

Upper17%

Middle 73%

Lower9%

Chart 4.3

Inference

So, we can say that around 75% of the respondents who are interested in

investment belong to middle class as they consider investments important for

stable income and another criteria for targeting the potential investors can be the

income categorization and products can be developed according to specific

income category

Page | 75

4.4 Trends of dealing in securities

Table showing number of persons dealing in securities

Response Frequency Percentage

Yes 95 74

No 33 26

Table 4.4

Interpretation

Out of 128 people, who showed their interest in investment, 95 said that they are

dealing in securities while rest of them, that is, 33 respondents were not dealing

In any kind of securities.

Page | 76

.

Yes74%

No26%

Chart 4.4

Inference

Even though 128 respondents have shown interest in investment activities, not

all of them are dealing in securities either due to lesser funds available with them

for investment or due to lack of knowledge regarding financial markets. However,

74% of them are still engaged in selling and buying of securities,

Page | 77

4.5 Investment preferences of the investors

Table showing investment preferences of the respondents

Response Frequency Percentage

Bonds & Debentures 12 9

Shares & Warrants 58 45

Mutual fund 30 24

All of these 16 13

None of these 12 9

Table 4.5

Interpretation

When asked about investment preferences, most of the investors were interested

in shares & warrants anad mutual funds. 45% favoured shares & warrants and

24% favoured mutual funds.Some investors were also not interested in any of

these but were investing their funds in fied deposits of banks and post office

saving schemes.

Page | 78

Bonds & Debentures9%

Shares & Warrants45%

Mutual fund23%

all of these13%

none of these9%

Chart 4.5

Inference

This shows that although the mutual funds market is on the rise yet, the most

favored investment continues to be in the Share Market. So, with a more

transparent system, investment in the Stock Market can definitely be increased.

Page | 79

4.6. Awareness of demat account among investors

Table showing awareness regarding Demat Account

Response Frequency Percentage

Yes 123 82

No 27 18

Table 4.6

Interpretation

This table was formed on the basis of respondents who were aware of demat

account and those who were not aware of demat account. Out of 150

respondents, 123 replied yes as their answer when they were asked that wheter

they were aware of demat account or not. But there were atill 27 respondents

who did not even know what a demat account is all about.

Page | 80

Chart 4.6

Inference

So, it can be said that around 82% of people know about demat account but

there are still some people who do not know about all this and therefore are not

able to exploit the earnings opportunities available in financial markets.

Therefore, people should be educated about trading in securities so that they can

reap benefits out of it

4.7 Opinion of investors about demat account

Table showing number of people holding different opinion about demat account

Response Frequency Percentage

Easy to sell securities 22 24

Purchase in primarymarket 12 9

Helps in fast money & income growth 54 45

Helps in stable income 35 22

Table 4.7

Page | 81

Interpretation

When asked about the opinion people have about demat account, for most of

them, demat account was a mean of fast money & income growth and for some

of them stable income. Few people also think that demat account for easy selling

of securities and purchase in primary market.

Page | 82

Easy to sell securities

18%

Purchase in primary market10%

Helps in money & income growth

44%

Helps in stable income

28%

Chart 4.7

Inference

It is good to see that around 72% people know that trading through demat

account helps in earning money and income growth. This kind of thinking pattern

should be spread among people so that they can invest more and more. In

addition, it will also help in mobilizing funds for development of economy.

Page | 83

4.8 Trends regarding holding a demat account

Table showing number of respondents having demat account

Response Frequency Percentage

Yes 98 65

No 52 35

Table 4.8

Interpretation

This table shows that out of 150 people, 98 people had demat account and 52

people do not had demat account. Around 123 respondents are aware of demat

account but only 98 of them hold it.

Page | 84

Yes65%

No35%

Chart 4.8

Inference

This pie chart shows around 65% of respondents possess demat account and it

is a majority part. So we can say that most of the people are trading in stock

market. But there is need of advertisement so as to engage them stock trading

and for that demat account is to opened with them.

Page | 85

4.9 Market holding of different players in the industry

Table showing number of respondents having demat account in different

depository participants:

Response Frequency Percentage

Reliance money 32 32

ICICI 36 36

Religare 12 12

Others 18 18

Table 4.9

Interpretation

Out of 98 investors who had demat account, 36 people had their demnat account

in ICICI and 34 investors had the same in Reliance Money. Some investors took

name of religare and there was a mixed response about other depository

participants like Karvy, Sharekhan, Indiabulls etc.

Page | 86

Reliance Money33%

ICICI37%

Religare12%

Others18%

Chart 4.9

Inference

From this pie chart, we can see the main leaders in the market are ICICI and

Reliance Money. They have a stiff competition between them and together they

hold around 68% of market share. While the other competitors like religare,

sharekhan, Indiabulls, Karvy etc. are are still behind

Page | 87

4.10 Potential available for companies in the industry

Table showing preferred depository participant by those who know about demat

account but do not have one:

Response Frequency Percentage

Reliance money 12 50

ICICI 8 35

Religare 2 4

Others 3 11

Table 4.10

Interpretation

When asked from the respondents, who do not had demat account but know

about it, about the preferred depository participant, out of 25 investors, 12 said

that they would like to open their demat account in Reliance Money and 8

preferred ICICI for the same purpose. Some investors/ potential investors also

took name of religare, sharekhan, indiabulls etc.

Page | 88

Reliance Money43%

ICICI29%

Religare7%

Others21%

Chart 4.10

Inference

It shows that even though ICICI is the market leader but Reliance Money is

giving ICICI a good competition. More people want to open their demat account

in Reliance Money as compared to people who prefer ICICI for the same

purpose.

Page | 89

4.11 Frequency of trading by investors

Table showing how frequently investors trade:

Response Frequency Percentage

Daily 17 17

Weekly 27 28

Monthly 43 44

Yearly 11 11

Table 4.11

Interpretation

Out of the people who had demat account, 43 said that they usually trade once a

month and 28 said that they trade weekly. Investors were also there who trade

daily or yearly but those people were less in numbers. So almost 72% of

investors trade weekly or monthly.

Page | 90

Daily17%

Weekly28%Monthly

44%

Yearly11%

Chart 4.11

Inference

Inspite of the huge returns that the share market promises, we see that there is

still a dearth of active traders and investors. This is because of the non –

transparent structure of the Indian share market and the skepticism of the target

audience that is generated by the volatility of the stock market. It requires

efficient bureaucratic intervention on the part of the Government

Page | 91

4.12 Awareness among investors about Reliance Money

Table showing awareness of Reliance Money as a brand:

Response Frequency Percentage

Yes 126 84

No 24 16

Table 4.12

Interpretation

When people were asked about awareness of Reliance Money as a brand, 126

knew about Reliance money and 24 did not know. Around 84% said yes to this

question while 16% said no. majority of people know about Reliance Money as a

good brand.

Page | 92

Yes84%

No16%

Figure 4.12

Inference

This pie-chart shows that reliance money has a reasonable amount of brand

awareness in terms of a premier Retail stock broking company. This brand image

should be further leveraged by the company to increase its market share over its

competitors.

Page | 93

4.13 Awareness of facilities provided by Reliance Money

Table showing awareness regarding facilities provided by Reliance Money:

Response Frequency Percentage

Yes 62 41

No 88 59

Table 4.13

Interpretation

Out of 150 people, 62 people knew about reliance money facilities but a majority

of people, that is, 88 people did not know about facilities provided by Reliance

Money. Even though around 84% of people knew about Reliance Money as a

brand but only 41% of people knew about the facilities provided or services

offered by Reliance Money.

Page | 94

Yes41%

No59%

Chart 4.13

Inference

Although there is sufficiently high brand equity among the target audience yet, it

is to be noted that the customers are not aware of the facilities provided by the

company meaning thereby, that, the company should concentrate more towards

promotional tools and increase its focus on product awareness rather than brand

awareness.

Page | 95

4.15 Availability of Reliance Money franchisee

Table showing availability of Reliance Money franchisee for trading purposes:

Response Frequency Percentage

Easy 32 35

Difficult 66 65

Table 4.14

Interpretation

When people were asked about the amount of efforts spent in locating Reliance

Money franchisee for trading purpose, 32 said that it is easy to find Reliance

money Franchisee while 66 of them could not find that so easily. Majority of them

found it difficult to reach a franchisee for trading puposes.

Page | 96

Easy 33%

Difficult67%

Chart 4.14

Inference

From the above pie chart we can see that 67% of people found it difficult to

locate Reliance Money franchisee for trading and only rest of the investors, that

is, only a small part of 33% can locate the same easily. The difficulty in locating

the franchisee may harm Reliance Money as people will go for those depository

participants whose services are widely available in market.

Page | 97

4.15 Satisfaction level experienced by customers of Reliance

Money

Table showing satisfaction level among investors trading through Reliance

Money demat account:

Response Frequency Percentage

Good 4 13

Average 9 28

Bad 19 59

Table 4.15

Interpretation

Talking about the satisfaction levels of customers of Reliance Money, out of 44

investors who had demat account in Reliance Money, 19 of them said that they

are not at all happy with the services provided by Reliance Money. Only 4

customers had a good satisfaction level and rest of them had an average

experience of dealing with Reliance Money.

Page | 98

Good 13%

Average28%

Bad59%

Figure 4.16

Inference

This pie-chart corroborate the fact that Strategic marketing, today, has still not

gone beyond meeting sales targets and generating profit volumes only. That is

why, around 59% of customers which comprises of more than half of the

customers having a very low level of satisfaction.

Page | 99

Chapter 5 – FINDINGS, SUGGESTIONS AND CONCLUSIONS

5.1 Findings

5.1.1 Visibility of the outlet

The visibility of the outlet has a problem because of the old tampered boards

displaying the banner of Reliance Money. So the prospective leads may be left

unnoticed.

5.1.2 Area Potentiality

Chandigarh is one the few areas which hold the high net worth (HNI)

individuals in a hub. So the area was a high potential area which can feed us with

sufficient volume of business. So the area was not at all a problem for the poor

performance. It implies that the problem was within the franchisee and it’s

activities.

5.1.3 Sales Activities

Being doing business in a high potential area, this franchisee can not

extract the available potential in that area. All because of the un availability of

Business Development Executives with the franchisee to contact the prospective

HNIs at their door step.

5.1.4 Customers’ dissatisfaction

Customer is not very much satisfied with the services because there is not a very

good system of follow up by the company. This is leading to dissatisfaction

among the clients or customers of Reliance Money

Page | 100

5.1.5 Bad word Of mouth

Past experiences of customers, which were not good enough, are leading to

unfavourable publicity of the company. This is a becoming a problem for

generation of new leads and therefore the company is losing business somehow.

5.1.6 Lack of awareness about services offered

There is lack of awareness amongst people about the services offered by

Reliance Money. People know Reliance Money as a brand but due to lesser

advertisement and promotional activities, they still do not know what this

company is all about.

5.1.7 Target Market

From the research it can be found out the major investors belong to middle

income group who keep around 5% - 15% of their income for investment

purposes. So it is very clear from that the target market or potential investors are

coming from middle income group

5.1.8 Preferred mode of investment

The preferred mode of investment has come out to be share trading and mutual

funds. Most people are engaged in share trading but still many others have also

shown interest in mutual funds too. So these are the two most preferred modest

of investment.

5.1.9 Position of Reliance Money in market

People are very much aware of Reliance Money as a brand but still at this point

of time market leader in the industry is ICICI direct. However, Reliance Money is

not vey behind as the new investors entering into the market want to open their

account with Realiance Moncey. So, it has a good business potential in the

future.

Page | 101

5.2 Suggestions

5.2.1 For visibility of franchisee

To enhance the visibility of that franchisee, I recommend them to replace that old

tampered sign board with a new one. As an initiative step from my side, I along

with the business associate reported the branch office for providing the new

banner for franchisees

5.2.2 For enhancing sales activities

The first and foremost resource needed for enhancing he sales activities is the

Human Power, that is, to recruit some business development executives to assist

the sales activities of particular franchisees. The recommendation should pass

through proper channel to the business associate.

5.2.3 For customers’ satisfaction

When I had a chance to meet the existing customers, I came to know that they

are not happy with the internet assistance provided by the Reliance money. They

are reporting that the speed was very bad when compared with the online

platform provided by ICICI direct. So Reliance money should take steps to

upgrade the speed of their trading platform with user friendly services too

5.2.4 Creating awareness regarding benefits of investments

The most vital problem spotted is of ignorance. Investors should be made aware

of the benefits. Nobody will invest until and unless he is fully convinced. Investors

should be made to realize that ignorance is no longer bliss and what they are

losing by not investing.

So the advisors should try to change their mindsets. The advisors should target

for more and more young investors. Young investors as well as persons at the

Page | 102

height of their career would like to go for advisors due to lack of expertise and

time.

5.2.5 Proper Follow up

After sales services and follow up calls are important for getting new references.

So trained tele-callers should be appointed for this purpose whose sole work

should be to make feedback calls.

Regular customer meets should be arranged to know the satisfaction level of the

customers.

5.2.6 Product Specialization

Reliance is having too many financial products right from Demat account to

General Insurance and not all the salespeople are familiar with each and every

product so the work force should be segregated each group dealing in a specific

product and the sales target should be given likewise.

5.2.7 Suggestion Boxes

There should be provision of complain suggestion boxes at each branch so that

the problems of customers can be dealt with. This can be an effective system for

showing hospitality towards customers

5.2.8 Customer Education

The customer should be educated about the stock market to overcome his fear of

uncertainty in these markets and must be assured of expert advice in case of

market fluctuations. The customer should also be educated about the benefits of

investment in stock markets over other investment schemes.

Page | 103

5.3 Conclusion

As students, many of us are completely ignorant of the work cultures of various

corporate organizations. SIP is an attempt to provide us a practical corporate

exposure where we work in certain corporate organizations as interns. Working

with Reliance Money is a nice opportunity by which I can explore my knowledge

A good brand is always welcomed. Everywhere, in general, people are more

conscious with the brand. So they go for the brand and are ready to spend some

extra bucks for the quality.

The Brand image of Reliance Money is good in market but according to customer

satisfaction reviews the company have to provide better services and proper

follow up

Reliance Demat Account is better than other Demat account . Reliance Money

have good return of investment too. It also provides a sense of security with the

use of special type of key

At last it can be on be concluded by that Reliance Money is still growing in the

financial sector and has a huge potential for the coming times.

.

But this project also includes prospective investors, who can invest in stock

market but presently does not invest in these markets. There are many reasons

for such investors not to invest in stock market. The main reasons for the

customer not to invest in stock markets are –

1. High risk

2. High uncertainty

3. Lack of knowledge

4. High rate of fluctuations

Page | 104

My Learnings

To get initial success in this field is very difficult. Although the business

generation becomes easier with time as we serve more people who then

get added up in the loyal clientage. Thus time and service are two most

factors in his field.

Also the corporate remains a very important segment which gets business

in bulk but retail cannot be ignored which makes your business ticking.

Apart from the assigned roles and responsibilities, the center manager

facilitated me with a training which covers the product details of Reliance

money, and how they are cheaper than other broking agencies, about

their corporate culture, organizational structure, sales methodology, tele-

calling, application handling, grievances handling with respect to

aggressive customers , etc.

Regarding customer handling, they provide me with a database for cold

call. As it is my first experience in tele calling, I got tense due to the harsh

responses. Later by realizing the responses from the prospective lead

calls boost my confidence in tele calling.

Page | 105

BIBLIOGRAPHY

Books Referred:

C R Kothari, “Research Methodology”,1st edition, New Age International

Publishers, ISBN: 978-81-224-1522-3

Malhotra, Naresh "Marketing Research and Applied Orientation" IV Ed., 2005, Pearson

Agarwal, J.D. "Security Analysis & Portfolio Management: A Review, Finance India, Vol. II No. 1, March 1989.

Websites:

www.reliancemoney.com

www.karvy.com

www.nseindia.com

www.bseindia.com

www.moneycontrol.com

www.religare.in

www.angelbroking.com

www.nsdl.co.in

Page | 106

ANNEXURE

Financial Details

PROFIT AND LOSS ACCOUNT

Name Mar-2008 Mar-2007

INCOME :

Sale of Electrical Energy 319.90 317.28

Other Income + 2.92 4.08

Stock Adjustment 0.00 0.00

Total Income 322.82 321.36

 

EXPENDITURE :

Cost of Fuel and Power Purchased 271.72 269.53

Generation & Distribution Expenses +

6.62 7.42

Employee Cost + 22.24 22.04

Administration expenses + 4.48 4.26

Miscellaneous Expenses + 6.73 5.31

Less: Preoperative Expenditure Capitalized

0.00 0.00

Profit before Interest, Depreciation & Tax

11.03 12.80

Interest & Financial Charges + 4.81 2.26

Profit before Depreciation & Tax 6.22 10.54

Depreciation 3.54 3.11

Profit Before Tax 2.68 7.43

Tax 1.63 2.17

Page | 107

Profit After Tax 1.05 5.26

 

Adjustment below net profit + 0.00 0.00

P & L Balance brought forward 4.31 0.02

Appropriations + -14.62 0.97

P & L Balance carried forward 19.98 4.31

 

Equity Dividend 0.42 0.53

Preference Dividend 0.00 0.00

Corporate Dividend Tax 0.07 0.09

Equity Dividend (%) 10.00 12.50

 

Earning Per Share (Rs.) 2.32 12.22

Book Value 192.98 192.46

 

Extraordinary Items + -0.06 1.34

Table 2.9

BALANCE SHEET

Name Mar-2008 Mar-2007

SOURCES OF FUNDS :

 

Share Capital + 4.23 4.23

Reserves & Surplus + 80.07 79.85

Total Shareholders’ Funds 84.30 84.08

 

Page | 108

Secured Loans + 40.34 28.90

Unsecured Loans + 16.51 5.76

Service Line & Security Deposits from Customers 2.63 2.32

Total Debt 59.48 36.98

 

Total Liabilities 143.78 121.06

 

APPLICATION OF FUNDS :

 

Gross Block + 125.22 93.49

Less: Accumulated Depreciation 27.44 24.52

Net Block 97.78 68.97

Capital Work in Progress 10.64 11.00

 

Investments + 5.17 4.05

 

Current Assets, Loans & Advances

Inventories + 8.18 8.60

Sundry Debtors + 85.05 86.36

Cash and Bank Balance 12.05 16.56

Loans and Advances + 9.22 9.51

Less: Current Liabilities & Provisions

Current Liabilities + 74.87 77.30

Provisions + 10.11 7.89

Page | 109

 

Net Current Assets 29.52 35.84

 

Miscellaneous Expenses not w/o + 0.67 1.20

 

Total Assets 143.78 121.06

 

Contingent Liabilities + 1.25 0.46

QUESTIONNAIRE

Name: __________________________________________________ Address:

__________________________________________________

Occupation:

_____________________________________________________________

Telephone: _________________________ Date:

________________________

Q.1: Are you interested in investment?

(a) Yes

(b) No

Q.2: What percentage of your annual income you can keep for investment?

(a) Upto 5%

(b) Upto 10%

(c) Upto 15%

(d) Upto 20%

Page | 110

(e) Above 25%

Q.3: In which category of income you will describe yourself?

(a) Lower income group

(b) Middle income group

(c) Higher income group

Q.4: Are you dealing or interested in dealing with any security?

(a) Yes

(b) No

Q.5: What type of investment style are you looking for?

(a) Bonds & debentures

(b) Shares & warrants

(c) Mutual funds

(d) All of these

(e) None of these

Q.6: Do you know about DEMAT a/c?

(a) Yes

(b) No

Q.7: In your point of view DEMAT A/C is for?

(a) Easy in selling securities

(b) Purchase in primary market

(c) Helps in earn income & also grow money

(d) Helps in earn a stable income

Q.8: Do you have a DEMAT a/c?

a) Yes

b) No

Page | 111

Q.9: If yes, then where?

(a) Reliance Money

(b) ICICI

(c) Religare

(d) Others (please specify)

Q.10: If No, then where do you want to open?

(a) Reliance Money

(b) ICICI

(c) Religare

(d) Others (please specify)

Q.11: How frequently you are going to use your DEMAT a/c?

(a) Daily

(b) Weekly

(c) Monthly

(d) Yearly

Q. 12: Awareness of Reliance Money as a brand?

a) Yes

b) No

Q.13: Awareness of Reliance Money facilities?

a) Yes

b) No

Q.14: Availability of Reliance franchisee for trading purpose

a) Easy

b) Difficult

Q.15: Satisfaction level among customer with Reliance Money?

a) Good

Page | 112

b) Average

c) Bad

Page | 113