summer internship final

8/4/2019 Summer Internship Final

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BHARTI VIDYAPEETH UNIVERSITY, PUNE

INSTITUTE OF MANAGEMENT AND ENTREPRENUERSHIP DEVELOPMENT, PAUD

ROAD, ERANDWANEPUNE-38

A

SUMMER INTERNSHIP REPORT ON

“PREFERENCE OF ADVISOR’S TOWARDS MUTUAL

FUNDS”

SUBMITTED IN PARTIAL FULLFILMENT OF

INSTITUTEOF MANAGEMENT AND ENTREPRENEOURSHIP

DEVELOPMENT, PUNE

FOR THE AWARD OF DEGREE OF MASTER OF BUSINESS

ADMINISTRATION

BY

Ankita Mandal

ROLL NO. 28

2009-2011

GUIDED BY



PROF. PRABHAT KUMAR

BHARTI VIDYAPEETH UNIVERSITY, PUNE

INSTITUTE OF MANAGEMENT AND ENTREPRENUERSHIP DEVELOPMENT, PAUD

ROAD, ERANDWANE

PUNE-38

CERTIFICATE OF COMPLETION

This is to certify that Mr. A NKITA MANDAL is a bonafide student of MBA

program of the university in this institute for the year 2009-2011 . A s a

part of the University curriculum, the student has completed the project report

titled

PREFERENCE OF ADVISORS TOWARDS MUTUAL FUNDS The project report is

prepared by the student under the guidance of

Prof. PRABHAT KUMAR

(Teacher Guide) Program Co-ordinator

Director

Date:

Place:



DECLARATION

I Apurva Omar, hereby declare that the work titled “ADVISOR’S

PERCEPTION ABOUT MUTUAL FUNDS” is my original work study

carried out after completing my 2nd Semester of M.B.A. under the guidance of

Prof. PRABHAT KUMAR and submitted in partial fulfillment for the

requirement of award of Master of Business Administration degree of Bharti

Vidyapeeth University from Institute of Management and

Entrepreneurship Development , Erandwane, Kothrud Pune.

Yours sincerely

(Ankita Mandal)

Place :

Date :



PREFACE

THE CORPORATE PROGRAM of MBA course is a well structured and

integrated programme. The course of management gives a practical knowledge

in our study course. Industries give us much information about the different

product and services we use in our day to day life.

It is highly said that “practice makes a man perfect” the summer project training

which is a part of M.B.A to get a practical understanding and training of the

business management. Thus the industrial training which is a part of M.B.Acourse helps the student to get the knowledge about the actual environment of

an organization.

Karvy Stock Broking ltd. is one of such company dealing in Share market

Derivatives, Commodities, Mutual fund IPO distribution with almost branches

in overall India.

It involved the study of Marketing activities of the organization. I have under

taken industrial training in Karvy Stock Broking ltd. at Kanpur crossing from19-may-2010 to 6-july-2010 as a part of my MBA course curriculum and I thus,

present a project report on it at the best of my ability knowledge and work done.

ACKNOWLEDGEMENT



The making of any project requires contribution from many people, right from

inception till its completion. In my case also, there had been a few people who

have made this happen. It was not only learning but also an enriching

experience.

I feel indebted and place my special thanks to Mr. PRASHANT SHRIVASTAV

(Area Manager) KARVY Stock Broking Limited Kanpur for his active guidance

and support from time to time during the training and project and in the final

understanding of the investment behavior of investors towards mutual funds.

I feel immense pleasure in expressing my sincere and deep sense of gratitude

and high obligation to Mr. SHARAD SHUKLA (Regional Department Head),

Mr. Fateh Bahadur Singh (D.P. Head), Ms. Ruchi Dubey (Registrar

Department Head ), Mr. Satpaal Singh (Mutual Fund Department Head), for

their valuable guidance and constant encouragement right from the selection of

project work to final preparation of the project report and in the final

understanding of the investment behavior of investors towards mutual funds.

I would like to thank my faculty guide Prof. PRABHAT KUMAR for

explaining the concepts of Marketing Research and Financial Concepts to me,

for being a source of inspiration and for the valuable suggestions provided

throughout.

Finally,I would also like to thank Dr. NITIN NAYAK – Director of Institute of

management and Enterpreneurship Development (Bharti Vidyapeeth

University) and all Faculty Members and colleagues of the institute deserve the

praise for their role in shaping this summer training project. I am grateful to my

family for their moral support and understanding .

Ankita Mandal

EXECUTIVE SUMMARY



India’s economy is highly developing. The development is taken place due to

the growth in the financial system. This financial system provides the

background to various investors regarding varied options to invest. Thus,

development of the economy depends on how these investors invest for the well

being in long run.

As financial markets become more sophisticated and complex, investors need a

financial intermediary who provides the required knowledge and professional

expertise on successful investing. Mutual Funds represent perhaps the most

appropriate investment opportunity for investors. No wonder the concept of

Mutual Fund was initially developed in the U.S. market, but the entry of the

concept in the Indian Financial Market was in the year 1964 with theformulation of the UTI, at the initiative of the RBI and Govt. of India.

For most people, money is a delicate matter and when it comes to investing they

are wary. Simply because there are many investment options out there, each out

promising the other. An important question facing many investors is whether to

invest in Banks, National Savings, Post office, Non-banking finance companies,

Fixed deposits, Shares etc. or to invest distinctively in Mutual Funds.

I have observed that approximately 40% of the people are unaware of Trading

but most of them are interested to know about trading and ready to attend

seminar arranged by KARVY. They are also interested to work with KARVY if

sufficient information is provided to them about Trading and KARVY.

People from service class prefers safety of income plus the regular income as

well as tax benefits while on the other hand Professional and Businessman focus

on high return with some risk.

For growth and development of the Stock Market Industry, the misconception

regarding Share Market should be removed & the awareness for the same

should be made.

CONTENTS OF THE REPORT



S.NO. TOPICS PAGE NO.

1. OBJECTIVES OF SUMMER

INTERNSHIP

10

2. SCOPE OF THE WORK 10

3. COMPANY PROFILE 11

a.) HISTORY OF KARVY 12

b.) TYPE OF ORGANISATION 15

c.) PROMOTORS OF THE

COMPANY

d.) SECVICES OF KARVY 17

e.) ORGANIZATION STRUCTURE

OF KARVY

• NATIONAL LEVEL

ORGANIZATION STRUCTURE

• BRANCH LEVEL

ORGANIZATIONAL STRUCTURE

22

23

24

4. WORKING ENVIRONMENT

a.) Marketing Strategy

b.) H R Policy Of Karvy

c.) Quality Policy of Karvy

29

29

31

31



d.) SWOT Analysis 33

5. PRINCIPLES OF PRACTICE OF

MANAGEMENT

a.) Introduction Of Mutual Funds

b.) Development Of Mutual Funds

c.) Types Of mutual Funds

d.) Structure Of Indian Mutual

34

6. RESEARCH OBJECTIVES 48

7. RESEARCH METHODOLOGY 50

8. DATA ANALYSIS AND

INTERPRETATION

53

9. FINDINGS 58

10. CONCLUSTIONS 59

11. RECOMMENDATION 60

12. BIBLIOGRAPHY 61

13. QUESTIONNAIRE 62

14. GLOSSARY 65



1. OBJECTIVE S OF THE SUMMER INTERNSHIP

1. To study the investment pattern of the investors.

2. To know the factors considered by investors for making

investments in Mutual Funds.

3. To know investors attitude towards Mutual Funds.

4. To know their expectation and level of satisfaction from the

mutual funds.

5. To know their future plans towards mutual funds.

2. SCOPE OF THE WORK



Today KARVY is well known as a premier financial services enterprise,

offering a broad spectrum of customized services to its clients, both corporate

and retail. Services that KARVY constantly upgrade and improve are because

of company’s skill in leveraging technology. Being one of the most techno-

savvy organizations around helps company to deliver even more cost effectivefinancial solutions in the shortest possible time.

What bears ample testimony to Karvy’s success is the faith reposed in company

by valued investors and customers, all across the country. Indeed, with Karvy’s

wide network touching every corner of the country, even the most remote

investor can easily access Karvy’s services and benefit from company’s expert

advice.

3. COMPANY PROFILE OF KARVY

US The Karvy group was formed in 1983 at Hyderabad, India. 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 corporate, 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 in 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 Karvy.

3(a). HISTORY OF 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 leveragedwith 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

people



.In January 1998, Karvy became first Depository Participant in Andhra Pradesh.

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

made it an Integrated Financial Services Company.

Today, company has 230 branch offices in 164 cities all over the India. Thecompany 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.



B a c k g r o u n d

K a r v y, th e le



3(b). KARVY - TYPE OF ORGANISATION

Member - National Stock Exchange (NSE), The Bombay Stock Exchange

(BSE), and The Hyderabad Stock Exchange (HSE).

Karvy Stock Broking Limited, one of the cornerstones of the

Karvy edifice, flows freely towards attaining diverse goals of the customer

through varied services. Creating a plethora of opportunities for the customer byopening up investment vistas backed by research-based advisory services. Here,

growth knows no limits and success recognizes no boundaries. Helping the

customer create waves in his portfolio and empowering the investor completely

is the ultimate goal.

It is an undisputed fact that the stock market is unpredictable and yet enjoys a

high success rate as a wealth management and wealth accumulation option. The

difference between unpredictability and a safety anchor in the market is provided by in-depth knowledge of market functioning and changing trends,

planning with foresight and choosing one & rescue’s options with care. This is

what we provide in our Stock Broking services.

We offer services that are beyond just a medium for buying

and selling stocks and shares. Instead we provide services which are multi

dimensional and multi-focused in their scope. There are several advantages in

utilizing our Stock Broking services, which are the reasons why it is one of the

best in the country.



Mission Statement of ‘Karvy’

An organization exists to accomplish something or achieve something. Themission statement indicates what an organization wants to achieve. The mission

statement may be changed periodically to take advantage of new opportunities

or respond to new market conditions.

Karvy’s mission statement is “To Bring Industry, Finance and People together.”

Vision statement of ‘ Karvy ’

Company’s vision is crystal clear and mind frame very directed. “To bepioneering financial services company. And continue to grow at a healthypace, year after year, decade after decade.” Company’s foray into IT-enabled

services and internet business has provided an opportunity to explore newfrontiers and business solutions. To build a corporate that sets benchmarks for others to follow.



3(d). SERVICES OF “KARVY STOCK BROKING LIMITED”

1. STOCK BROKING SERVICES :

It is an undisputed fact that the stock market is unpredictable and yet enjoys ahigh success rate as a wealth management and wealth accumulation option. Thedifference between unpredictability and a safety anchor in the market is

provided by in-depth knowledge of market functioning and changing trends, planning with foresight and choosing one's options with care. This is what we provide in our Stock Broking services.

We offer services that are beyond just a medium for buying and selling stocksand shares. Instead we provide services which are multi dimensional and multi-focused in their scope. There are several advantages in utilizing our Stock Broking services, which are the reasons why it is one of the best in the country.

We offer trading on a vast platform; National Stock Exchange, Bombay Stock Exchange and Hyderabad Stock Exchange. More importantly, we make tradingsafe to the maximum possible extent, by accounting for several risk factors and

planning accordingly. We are assisted in this task by our in-depth research,constant feedback and sound advisory facilities. Our highly skilled researchteam, comprising of technical analysts as well as fundamental specialists, secureresult-oriented information on market trends, market analysis and market

predictions. This crucial information is given as a constant feedback to our customers, through the following daily reports which are delivered to themthrice a day;

• The Pre-session Report, where market scenario for the day is predicted

• The Mid-session Report, timed to arrive during lunch break , where themarket forecast for the rest of the day is given and

• The Post-session Report, the final report for the day, where the marketand the report itself is reviewed.

1. Depository Participants Services :

The onset of the technology revolution in financial services Industry saw theemergence of Karvy as an electronic custodian registered with National



Securities Depository Ltd (NSDL) and Central Securities Depository Ltd

(CSDL) in 1998. Karvy set standards enabling further comfort to the investor

by promoting paperless trading across the country and emerged as the top 3

Depository Participants in the country in terms of customer serviced.

Offering a wide trading platform with a dual membership at both NSDL and

CDSL, we are a powerful medium for trading and settlement of dematerialized

shares. We have established live DPMs, Internet access to accounts and an

easier transaction process in order to offer more convenience to individual and

corporate investors. A team of professional and the latest technological

expertise allocated exclusively to our demat division including technological

enhancements like SPEED-e, make our response time quick and our delivery

impeccable. A wide national network makes our efficiencies accessible to all.

3.Financial Products Distribution services :

The paradigm shift from pure selling to knowledge based selling drives the

business today. With our wide portfolio offerings, we occupy all segments in

the retail financial services industry.

A 1600 team of highly qualified and dedicated professionals drawn from the best of academic and professional backgrounds are committed to maintaining

high levels of client service delivery. This has propelled us to a position among

the top distributors for equity and debt issues with an estimated market share of

15% in terms of applications mobilized, besides being established as the leading

procurer in all public issues.

To further tap the immense growth potential in the capital markets we

enhanced the scope of our retail brand, Karvy – the Finapolis , thereby

providing planning and advisory services to the mass affluent. Here weunderstand the customer needs and lifestyle in the context of present earnings

and provide adequate advisory services that will necessarily help in creating

wealth. Judicious planning that is customized to meet the future needs of the

customer deliver a service that is exemplary.

The market-savvy and the ignorant investors, both find this service very

satisfactory. The edge that we have over competition is our portfolio of offerings and our professional expertise. The investment planning for each



customer is done with an unbiased attitude so that the service is truly

customized.

Our monthly magazine, Finapolis, provides up-dated market information on

market trends, investment options, opinions etc. Thus empowering the investor to base every financial move on rational thought and prudent analysis and

embark on the path to wealth creation.

2. Advisory Services :

Under our retail brand ‘Karvy – the Finapolis', we deliver advisory

services to a cross-section of customers. The service is backed by a team of

dedicated and expert professionals with varied experience and background in

handling investment portfolios. They are continually engaged in designing

the right investment portfolio for each customer according to individual

needs and budget considerations with a comprehensive support system that

focuses on trading customers' portfolios and providing valuable inputs,

monitoring and managing the portfolio through varied technological

initiatives. This is made possible by the expertise we have gained in the

business over the years. Another venture towards being investor-friendly is

the circulation of a monthly magazine called ‘Karvy - the Finapolis'.Covering the latest of market news, trends, investment schemes and

research-based opinions from experts in various financial fields.

5. Private Client Group services :

This specialized division was set up to cater to the high net worth individuals

and institutional clients keeping in mind that they require a different kind of

financial planning and management that will augment not just existing finances

but their life-style as well. Here we follow a hard-nosed business approach withthe soft touch of dedicated customer care and personalized attention.



For this purpose we offer a comprehensive and personalized service that

encompasses planning and protection of finances, planning of business needs

and retirement needs and a host of other services, all provided on a one-to-one

basis.

Our research reports have been widely appreciated by this segment. The

delivery and support modules have been fine tuned by giving our clients access

to online portfolio information, constant updates on their portfolios as well as

value-added advice on portfolio churning, sector switches etc. The investment

recommendations given by our research team in the cash market has enjoyed a

high success rate.

6. Currency Derivatives :

Karvy Forex & Currency Private Limited (KFCL) is another business enterprise

of the prestigious Karvy group. Having laid a strong foundation in Indian

financial services, it is indeed a pleasure for the Karvy group to venture into the

currency derivatives segment. This enables us to provide extended services to

our esteemed customers, thereby making the group a single window for all

financial-services.

KFCL offers advisory and brokerage services for the Indian currency derivative

markets. We provide online trading platforms to our clients that enable them to

trade whenever they choose while receiving instant professional support.

Income Tax enabled services:

Karvy has been started this service since March, 2004. Karvy is work as TINFacilitation Centre it provides following IT enabled services.

a. Distribution of PAN Card. b. Distribution of TAN Card.c. Services related to e-TDS.

Karvy work as an intermediary between NSDL and IT payers. Karvy provides

various form for different IT enabled services and guide people to fill thatforms. It also solves



queries of the tax payers. It also distributes PAN and TAN card to the tax payers.

3(e) . ORGANIZATION STRUCTURE OF KARVY

Karvy Fortune a business opportunity for individuals in similar business fromKarvy, it gives the opportunity to associate with “Karvy Family” as Franchisee,

Remisser, or as an Independent Financial Advisors.

Karvy ranks among 5 stock brokers and Depositary Participants in India,

with the enormous net work of over 500+ branches in 375 locations across India

and overseas at Dubai, executes 150,000+ trades in NSE/BSE per day. Karvy

has a top notch research team, advisory team, technology support team to serve

it’s customers in 24/7 manner.



Associate with Karvy Fortune, a correlate opportunity from India’s

foremost financial services provider, Karvy Stock Broking Ltd. It offers

complete Karvy’s spectrum of financial products. Karvy fortune gives the

opportunity to associate with “Karvy Family” as Franchisee, Remisser or as an

Independent Financial Advisors please enroll your details.

Remisser of Karvy stock Broking Ltd.

Karvy is an established stock broking firm with a strong customer base all over

India, Karvy would like to reach out to more investors across the country,

building a good distribution channel through Business Partner/Associates.

Who is Business Partner/Associate?

Karvy is looking for like-minded people who wish to serve the customers with

utmost reliability and fervor. As a Business Associate of Karvy, you will

actively promote and market our services and products and keep our customers

updated of the forthcoming new products and schemes. Karvy offers you to join

our family as Franchisee/Business partners, Remisser or as an Independent

Financial Advisor.



Executives

NATIONAL LEVEL ORGANIZATION CHART

CM & MD

(Hyderabad)

GM GM GM

(Marketing) (Finance)

(HRM)

Zonal Manager

(Lucknow)

Regional Manager

(Kanpur)

Branch Mgr. Branch Mgr.

Accountant Sr. Executives

[ National Level Organization Chart of Karvy]



Branch Manager Marketing

Executives-3

PeonExecutives

(SB-4)

Executive

(IT)

Clerk AccountantExecutive

(Demat)

PeonSr. Executive

(Investment)

BRANCH LEVEL ORGANIZATION STRUCTURE CHART



PROMOTERS OF THE KARVY

BOARD OF DIRECTORSKarvy Consultants Limited

Parthasarathy C

Yugandhar M

Ramakrishna M S

Prasad V Potluri

Robert Gibson

Sanjay Kumar Dhir

R Shyamsunder

[Table1: BODs of Karvy Consultants Limited]

Karvy Investor Services Limited

Parthasarathy C

Yugandhar M

Ramakrishna M S

[Table2: BODs of Karvy Investor Services Limited

Karvy Securities Limited

Parthasarathy C

Yugandhar M

Ramakrishna M S

Ajay Kumar K

William Samuel

Nicholas Tully



Karvy Stock Broking Limited

Parthasarathy C

Yugandhar M

Ramakrishna M S

Ajay Kumar K

Kutumba Rao V

William Samuel

Nicholas Tully

C Parthasarathy, Chairman & Managing Director

Mr. C Parthasarathy, a leader in the financial

services industry in India is responsible for building

KARVY as one of India's truly integrated Financial

Services Provider; he is a fellow member of the

Institute of Company Secretaries of India, a Fellow

Member of the Institute of Chartered Accountantsof India and a graduate in law.As Chairman and

Managing Director, he oversees the group's

operations and renders vision and business

direction.

M Yugandhar , Managing Director

Mr. M Yugandhar, Managing Director, founder

member of KARVY Consultants Limited, has

varied experience in the field of financial services

spanning over 20 years. He is a Fellow Member of

the Institute of Chartered Accountants of India and

was involved in the statutory and branch audit of

banks for 26 years.



M S Ramakrishna, Executive Director

Mr. M S Ramakrishna, Director, founder member of

KARVY Consultants Limited is the orchestrator of technology initiatives such as the call centre in the

service of the customer.

Achivements

• Among the top 5 stock brokers in India (4% of NSE volumes)

• India's No. 1 Registrar & Securities Transfer Agents

• Among the top 3 Depository Participants

• Largest Network of Branches & Business Associates

• ISO 9002 certified operations by DNV

• Among top 10 Investment bankers

• Largest Distributor of Financial Products

• Adjudged as one of the top 50 IT uses in India by MIS Asia

• Full Fledged IT driven operations

About Kanpur Branch:

Kanpur branch comes under Lucknow branch which is a regional office of Karvy for Uttar Pradesh region. It was established on Jan. 1999. In Uttar Pradesh there are four Branch Offices of Karvy:

LucknowKanpur JhansiAllahabad

In Kanpur Karvy has started Demat Services on 21 June 2000.DP ID of Karvy is IN300394.



In Kanpur Karvy has started IT enabled services on Mar. 2004.

1. WORKING ENVIRONMENT OF KARVY

4(a). MARKETING STRATEGY OF KARVY



Market Positioning:

Market positioning statements of Karvy are “At Karvy we give you single window service” and “We also ensure your comfort”.

So, Karvy focus on the consumers who prefer almost all investmentactivities at same place by providing number of various financialservices. At Karvy a person can purchase or sell shares, debenturesetc. and at the same place also demat it. Karvy also provides other investment option to the same person at same place like Mutual Fund,Insurance, Fixed Deposit, and Bonds etc. and help the person indesigning his portfolio. By this way Karvy provides comfort to itscustomers.

Karvy is also positioned according to Ries and Trout . Karvy is promoted as a no. 1 investment product distributor and R & T agent of India.

Target Market:

Karvy uses demographic segmentation strategy and segment people based on

their occupation. Karvy uses selective specializationstrategy for market

targeting. Target person for the Karvy Stock Broking and Karvy Investment

Service are persons who can work as sub-broker for the companies. Companies

focus on Advisors of Insurance and post office, Tax consultants and CAs for making sub-broker.

Marketing channel System:

Karvy uses one level marketing channel for investment product distribution.

Sub-brokers work as intermediary between consumer and company. Company

has both forward and backward flow of activity through channel. Company

distributes stationery, brokerage, and information forward to its sub-broker. The

sub-brokers send filled forms, queries, amount of investment etc. back to the

company.

Training Channel Members:



The regional manager has authority to select lower level employee like peon,

marketing executives, accountant etc. by approval of zonal manager.

Training and Development:

Continuous training and upgrading technical, behavioral and managerial skills is

a way of life in Karvy. Karvy encourages employees to hone their skills

regularly to enable them to face the challenges of the changing requirements of

customers that fit market up and down.

Training needs analysis is done on a regular basis and systematic methodologies

are ensured that skills and capabilities of all employees are constantly upgraded

to enable them to perform in the challenging work environment.

4(c). QUALITY POLICY OF KARVY

To achieve and retain leadership, Karvy shall aim for complete customer

satisfaction, by combining its human and technological resources, to provide

superior quality financial services. In the process, Karvy will strive to

exceed Customer’s expectations.

Quality Objectives of Karvy

Build in-house processes that will ensure transparent and harmoniousrelationships with its clients and investors to provide high quality of services.

Establish a partner relationship with its investor service agents andvendors that will help in keeping up its commitments to the customers.

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

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

Continue to uphold the values of honesty & integrity and strive toestablish unparalleled standards in business ethics.

Use state-of-the art information technology in developing new andinnovative financial products and services to meet the changing needs of investors and clients.



Strive to be a reliable source of value-added financial products andservices and constantly guide the individuals and institutions in makinga judicious choice of same.

Strive to keep all stake-holders (shareholders, clients, investors,employees, suppliers and regulatory authorities) proud and satisfied.

4(d). SWOT ANALYSIS OF KARVY

Strengths:

Employees are highly empowered.Strong Communication Network.Good co-operation between employees.

Number 1 Registrar and Transfer agent in India. Number 1 dealer of Investment Products in India.

Weaknesses:

High Employee Turnover.

Opportunity :



Growth rate of mutual fund industry is 40 to 50% during last year and itexpected that this rate will be maintained in future also.Marketing at rural and semi-urban areas.

Threats:

Increasing number of local players.Past image of Mutual Fund.

1. PRINCIPLES AND PRACTICE OFMANAGEMENT

5(a). INTRODUCTION

CONCEPT OF MUTUAL FUNDS



Mutual Fund Cycle[Source: amfiindia.com]

From above cycle, it can be observed clearly that how the money from theinvestors flow and they get returns out of it. With a very small amount of fund,investors pool their money with fund managers.

After studying the market, the fund manager invests money of the investors invarious securities like shares, bonds, debentures, government securities etc. toachieve goal of the investors.

With ups and downs in the market returns are generated and they are passed onto the investors in form of dividend or capital gain or lost. The above cycle isvery clear and also very effective.

The fund manager while investing on behalf of investors takes intoconsideration various factors like time, risk; amount etc. so that he/she canmake proper investment decision.

5(b). DEVELOPMENT OF MUTUAL FUNDS IN INDIA

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

Trust of India, at the initiative of the Government of India and Reserve Bank

the. The history of mutual funds in India can be broadly divided into four

distinct phases

FirstPhase-1964-87



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

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

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

linked from the RBI and the Industrial Development Bank of India (IDBI) took

over the regulatory and administrative control in place of RBI. The first schemelaunched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700

crores of assets under management.

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

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

Fund established in June 1987 followed by Canbank Mutual Fund (Dec 87),

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

89),

Second Phase – 1987-1993 (Entry of Public Sector Funds)

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

sector India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its

mutual fund in June 1989 while GIC had set up its mutual fund in December

1990.

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

Rs.47,004 crores.

Third Phase – 1993-2003 (Entry of Private Sector Funds)

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

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

families. Also, 1993 was the year in which the first Mutual Fund Regulations

came into being, under which all mutual funds, except UTI were to be

registered and governed. The erstwhile Kothari Pioneer (now merged with

Franklin Templeton) was the first private sector mutual fund registered in July

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

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

functions under the SEBI (Mutual Fund) Regulations 1996.

The number of mutual fund houses went on increasing, with many foreign

mutual funds setting up funds in India and also the industry has witnessed

several mergers and acquisitions. As at the end of January 2003, there were 33

mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of Indiawith Rs.44,541 crores of assets under management was way ahead of other



mutual funds.

Fourth Phase – since February 2003

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

was bifurcated into two separate entities. One is the Specified Undertaking of

the Unit Trust of India with assets under management of Rs.29,835 crores as at

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

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

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

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

Regulations.

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

LIC. It is registered with SEBI and functions under the Mutual FundRegulations.

With the bifurcation of the erstwhile UTI which had in March 2000 more than

Rs.76,000 crores of assets under management and with the setting up of a UTI

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

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

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

the end of September, 2004, there were 29 funds, which manage assets of

Rs.153108 crores under 421 schemes.

The graph indicates the growth of assets over the years.

[ Growth in Assets Under Management][Source: www.amfiindia.com]



5(c). Types of Mutual Fund



Mutual funds are financial intermediaries

Financial

Market

Mutual

Funds

Earnings aAppreciatiInvestments

Professiona l fundManagement

Managem ent Fee

Small

P o o l i n

g S a v i n g s



Mutual Funds – Organisation

There are many entities involved and the diagram below illustrates the organizationalset up of a mutual fund:

[Fig. 6: Assets Under Management By Fund Type][Source: www.amfiindia.com]

[Fig. 7 Assets Under Management By AMC][Source: www.amfiindia.com]



REGULATORY BODIES

Financial System is basically responsible for the major up and downs in the economy.So, there are some regulatory bodies on it which ensures effectiveness in themanagement of fund of the investors and transparency in the transactions.

Ministry of Finance

SEBI RBI Dept. of IT

Stock Brokers Commercial PANR & T Agent Banks TAN

Mutual Fund NBF Co. e-TDS

[Fig.8: Regulatory bodies]

PRODUCT DETAILS

Mutual funds serve as a link between the saving people and the capital market in thatthey mobilize saving from investors and bring them to borrowers in the capitalmarkets. In short, it is a common pool of money into which investors place their

contribution that is to be invested in accordance with a stated objective.



A mutual fund uses the money collected from the investors to buy those assets, whichare specially permitted by its stated investment objective. When an investor subscribesto a mutual fund, he/she buys a part of asset or the pool of funds that are outstandingat that time.

A mutual fund is constituted as an investment company and an investor buys into thefund, means he buys the share of the fund and is known as a unit holder. Since eachunit holder is a part of owner of a mutual fund, it is necessary to establish the value of his part. Since the unit held by an investor evidences the ownership of the fund’sassets, the value of the total asset of the fund when divided by the total number of units issued by the mutual fund gives us the value of one unit. This is called as NetAsset Value (NAV).

5(d).STRUCTURE OF INDIAN MUTUAL FUNDS

Mutual fund industry is highly regulated by the government keeping in view of the protection of investor’s interest as well as to maintain operationaltransparency.

In India SEBI Regulations Act, 1996, guides the formation and operation of Mutual Funds. A Mutual Fund comprises of 4 separate entities.

1. Sponsor 2. Board of Trusties3. Asset Management Company4. Custodian and Depositories5. Distributors

1. Sponsor:

“Sponsor” is defined under SEBI regulation as any person who, acting alone or in combination with another body corporate, establishes a mutual fund. The

sponsor gets the fund registered with SEBI. The sponsors form a trust andappoint a Board of Trustees.

The sponsor must contribute at least 40% of the net worth of the AMC.The sponsor must posses a sound financial track record over 5 years prior to registration.

2. Board of Trustees:

Mutual funds are managed by Board of Trustees. Trust is created by a documentcalled the Trust Deed that is executed by fund sponsor in favour of trustees.



The trustees appoint the AMC and custodian with the prior approval of SEBI.They also approve all the schemes floated by the AMC.

They have right to dismiss the AMC, with the approval of SEBI.Half of the trustees should be independent persons. Neither the AMC, nor its employees can act as trustee.A trustee can not be appointed as a trustee of two or more mutual fundsuntil and unless he is an independent person or has permission from theMutual Fund where he is trustee.Trustees can be removed only by prior approval of SEBI.

ASSETS UNDER MANAGEMENT:

The role of an AMC is to act as the investment manager of the Trust under the

Board supervision and direction of the Trustees.The AMC is required to be approved and registered with SEBI.

The AMC of a Mutual Fund must have a net worth of at least Rs. 10 croreat all time.The AMC can not act as a trustee of any other Mutual Fund.They will float schemes only after obtaining the prior approval of theTrustees and SEBI.The director of AMC should be a person of reputed of high standing and

at least have five years experience in relevant field.AMC can be terminated with 75% unit holders or majority of trustees.

4. Custodian and Depositories:

As per SEBI Regulations Mutual Funds shall have a custodian who is not anyway associated with the AMC. It carry outs the activity of safe keeping thesecurities or participating, in any clearing system. The custodian should beindependent from sponsors and AMC and should have a sound track record andadequate relevant experience.

As Indian capital markets are moving away from having physical certificates toownership of these securities in “dematerialized” form with Depository. MutualFund’s “dematerialized” securities are hold by depository participant.

5. Distributors:

For a fund to sell units across a wide retail base of individual investors, anestablished network of distribution agents is essential. AMCs usually appointDistributors or Brokers, who sell units on behalf of the fund. A broker usually



acts on behalf of several mutual funds simultaneously and may have severalsub-brokers under him for the purpose of distribution of units.

MUTUAL FUND – A GLOBALLY PROVENINVESTMENT

Worldwide, the mutual fund has a long and successful history. The popularity of mutual fund has increased manifold. In developed financial market, like USmutual funds have almost overtaken bank deposits and total assets of over US $3 trillion.

In India, Mutual Fund industry started with the setting up of UTI in 1964.Public sector banks and financial institution began to establish Mutual Funds in1987. The private sector and foreign institutions were allowed to set up MutualFund in 1993.

WHAT IS MUTUAL FUND?

A Mutual Fund is a trust that pools the savings of a number of investors whoshare a common financial goal. The money thus collected is then invested incapital market instruments such as shares, debentures and other securities. Theincome earned through these investments and the capital appreciation realized isshared by its unit holders in proportion to the number of units owned by them.

Thus a Mutual Fund is the most suitable investment for the common man as itoffers an opportunity to invest in a diversified, professionally managed basketof securities at a relatively low cost.

Critical View About Mutual Fund

Advantages:

1. Portfolio Diversification:



Each investor in a fund is a part owner of all the funds assets, thus enablinginvestor to hold a diversified investment portfolio even with a small amount of investment, which would otherwise require big capital.

2. Professional Management:

Mutual Funds provide the services of experienced and skilled professionals, backed by a dedicated investment research team that analyze the performanceand prospect of companies and selects suitable investments to achieve theobjectives of the scheme.

3. Diversification:

Mutual Fund invests in a number of companies across a broad cross-section of industries and sectors. This diversification reduces the risk because all stock cannot go through a downtrend at the same time and in the same proportion. Youachieve this diversification through a mutual fund with powerless money thatyou can do on your own.

4. Reduction of Transaction Cost:

The investors bear all the cost of investing such as brokerage or custody of securities. When going through the fund investor has the benefit of economiesof scale; the funds pay lesser cost because of larger volumes, a benefit passedon to its investors.

5. Liquidity:

By investing in Mutual Funds the investors can cash their investment by sellingtheir units to the fund if open-ended, or selling them in the stock market if thefund is close ended.

6. Convenience & Flexibility:

Mutual Funds Companies offer investor to transfer their holding from onescheme to other.

7. Tax Benefits:

The investors are totally exempt from paying any tax on the income theyreceive from the Mutual Funds.Investment up to 10000 in ELSS qualifies for tax rebate of 20%.



8. Regulatory oversight:Mutual funds are subject to many government regulations that protectinvestors from fraud.

9. Convenience:

You can usually buy mutual fund shares by mail, phone, or over the Internet.

Limitations:

1. No Control over Costs:

An investor in a mutual fund has no control over the overall cost of investing.He/she has to pay investment management fees as long as he/she remains withthe fund. Fees are payable even while the value of the investment may bedeclining.

2. No Tailor made Portfolios:

Investors who invest on their own can build their own portfolios of shares and bonds and other securities. Investing through fund means he/she delegates thisdecision to the fund managers.

3. Managing a Portfolio of Funds:

Availability of a large number of funds can actually mean too much choice for the investor. He/she may again need advice on how to select a fund to achievehis/her objectives, quite similar to the situation when he/she has to selectindividual shares or bonds to invest in.

4. Entry and Exit Cost:

When large bodies like a fund invest in shares, the concentrated buying or selling often result in adverse price movements i.e. at the time of buying, fundhas to pay high and vise-versa.

5. No Guarantees:

No investment is risk free. If the entire stock market declines in value, the valueof mutual fund shares will go down as well, no matter how balanced the

portfolio. Investors encounter fewer risks when they invest in mutual funds thanwhen they buy and sell stocks on their own. However, anyone who investsthrough a mutual fund runs the risk of losing money.



PROBLEM FORMULATION

Marketing Research being a logical process definitely follows our predetermined sequence or steps in order to obtain the desired results or outcomes. Though the entire process of Marketing Research is quite complexand requires a considerable degree of knowledge and skill, the step of theProblem Formulation is the most challenging and critical one for the researcher as well as the research. It is rightly said that a problem, well defined is half solved.

In today’s competitive world companies can not afford to reactive, instead thetrend is toward proactive. It is due to the increasing competition that thecompanies can not afford to undertake research until something goes wrong.This can curtail the future growth or even affect the very existence of theorganization seeing to the trend of being proactive in the future; companies areallocating more resources to the disciplines of research. In such case it becomesa duty of researcher to ensure that the organization gets an optimum return onthe resources it has invested. Thus, Problem Formulation assumes greatimportance in Marketing Research.

The Marketing Research project undertaken by me for the ‘Karvy Securities

Limited’ encompasses within its scope, the study of “The Mutual Fund and tofind out market potential of KARVY Investor Service Ltd. with specialreference to distribution of Mutual Fund in Jamnagar City. Companywants to increase it’s sub-brokers who can work as intermediary betweencompany and the investors.”

6. RESEARCH OBJECTIVES

Any activity done without an objective in a mind cannot turn fruitful. Anobjective provides a specific direction to an activity. Objectives may range fromvery general to very specific, but they should be clear enough to point out withreasonable accuracy what researcher wants to achieve through the study andhow it will be helpful to the decision maker in solving the problem.Theobjective of any research is basically divided into two categories :



Primary Objective:To find out market potential of Karvy Investor Service Ltd.

Secondary Objectives:

To assess an awareness of mutual funds in Jamnagar City.To find out level of awareness of mutual funds in Jamnagar City.To find out how many investment advisors are interested in dealing of mutual fund.To find out how many investment advisors are willing to work withKarvy.



1. RESEARCH METHODOLOGY

1. Research Design:

A research design is a pattern or an outline of a research project’s working. It isa statement of only the essential elements of a study, those that provide the

basic guidelines for the details of the project. It comprises a series of prior decision that taken together provide master plans for executing a research

projects.

A research design serves as a bridge between what has been established i.e., theresearch objectives and what is to be done, in conduct of the study to relish

those objectives. If there were no research design, the research would have onlyfoggy notions as about what is to be done.

I have used ‘Cross-Sectional Design’ of ‘Exploratory Type’. The research isof both qualitative as well as quantitative type.

2. Unit of Analysis:

Mutual Fund Advisors.

Characteristics of interest:

Advisor’s knowledge about Mutual FundAdvisor’s knowledge about KarvyAdvisor’s interest in getting knowledge of Mutual FundAdvisor’s willingness to deal in Mutual Fund with KarvyAdvisor’s preference in selecting tax saving instrument of investmentAdvisor’s preference in selecting dealer



3. Sources of Data:

a. Primary Source:

The primary data is collected using sampling method and by survey usingquestionnaire.

b. Secondary Source:

Secondary data includes information regarding present market scenario,Information regarding Mutual Funds and competitors are collected by Internet,Magazines and News papers and books.

4. Sample Planning:

Sample Size: 50 units

Sample Extent: Jamangar City

Sampling Design:

A Sample Design is a definite plan for obtaining a sample from a given population. It refers to the technique or method the researcher would adopt in

selecting items for the sample.

I have used both ‘Convenience Sampling Method’ and ‘Snow Ball SamplingMethod’.



5. Data Collection Method:

I have used ‘Survey Method’ to collect data. I have collected data usingquestionnaire.

Questionnaire Plan

I have used ‘ Structured Questionnaire’ for gathering the required data throughcontacting respondent personally.

Type of Information:

I have collected Fact, Awareness, Attitude, Future action plan and reason usingquestionnaire.

Type of Questions:

‘Close-ended questions’ of ‘Dichotomous’ and ‘Multiple Choice’ type areasked in the questionnaire for data collection.

6. Data Analysis & Interpretation:

Data Analysis is based on the data collected by way of Questionnaires. From thecollected data findings are extracted. The data is tabulated and frequency

distribution chart is prepared.

1. RESEARCH ANALYSIS AND INTERPRETATION



Rate reason for choosing particular dealer.

Mutual Fund Advisors'

Suggestion

Shares

Mutual Fund

Insurance

FD

Tax Bond

PPF

[Fig.12: Mutual Fund Advisors’ Suggestions]

Reasons of Choosing Above

Returns

Risk

Safety

Tax Benefite

Others

[fig.13: Reasons of Choosing Above]

[Fig.17: Differentiate advisors according to no of their clients}



[Fig. 18 Advisors gets invested IT payers in]

[Fig.20: Advisors who are interested in dealing of Mutual Funds]

[Fig.22: Advisor know about MF services provided by Karvy]

[Fig.23: Advisor who are interested to attend seminar on MF]

[Fig.24 Reason for not attending Seminar]

[Fig.25: Advisors who are interested to work with KARVY]

[Fig.26: Reasons for not interested in work with KARVY]



2. FINDINGS

The awareness level about Mutual Funds is quite low in the Jamnagar City among advisors.

Approximately 40% of advisers are aware of and interested in dealing of Mutual Funds. The reason for not interested in dealing of Mutual Fund isunawareness about Mutual Fund.

Only 10% investment advisors are aware of MF services provided byKarvy, so we can say that awareness level about MF services of Karvy is

very low.

Most of advisers are interested to know about Mutual Funds andinterested to attend seminar on Mutual Funds arranged by Karvy.

Only 46% of advisers are interested to work with Karvy. Most of advisorsdon’t want to work with Karvy because they have no time for expandingtheir services.

Most of people invest in insurance to save tax followed by PPF.Insurance is widely used as tax-saving instrument.



10. CONCLUSTIONS

Mutual Fund Advisors give emphasis on mutual funds than other investment options.

Mutual Funds have given a new direction to the flow of personal savingand enable small and medium investors in remote rural and semi urbanareas to reap the benefits of the stock market investment. Indian MutualFunds are thus playing a very important developmental role in allocationof scares resources in the emerging economy.

Karvy is not able to provide sufficient services to the investors due to

unawareness among advisors regarding services.

The awareness level of investor is low in advisors are interested indealing in mutual fund.

Very less advisors are knowing about services provided by karvy.



11. RECOMMENDATIONS

There is high potential market for Mutual Fund Advisors in Jamnagar city, but this market needs to be explored as investors are still hesitated toinvest their money in Mutual Funds.

In Jamngar investors have inadequate knowledge about Mutual Funds, So proper Marketing of various schemes is required, company shouldarranges more and more seminars on Mutual Funds.

Awareness of MF services provided by Karvy is also very low socompany needs proper marketing of their all services by advertising,

distribution of pamphlet, arranging seminars etc.

Most of advisors are not interested in dealing of Mutual Funds becausethey don’t want to expand their services due to lack of time, so companyshould provide them knowledge about single window services by whichinvestor can get all financial services from one place.

Company should also provide knowledge about the growth rate and theexpected growth rate of Mutual Fund industry in India.

Most of people aware of life insurance, NSC and PPF for tax saving so,company should market various tax saving schemes of Mutual Funds andtheir benefits.

The interface among the investors and the Mutual Fund

Companies is the agents, so the agents should have

proper knowledge about Mutual Funds as well as market

so that they can help investors in their investment

decisions. The quality of agents performance andinvestors trust on them can be improved only if they are

permanent in nature



12. BIBLIOGRAPHY

1. www.mutualfundsindia.com

2. www.amfiindia.com

3. www.themanagementor.com

4. www.dewb-vc.com

5. www.karvy.com

6. www.indiacorporateadvisor.com

7. www.nsdl.co.in

8. www.incometaxdelhi.nic.in

9. www.incometaxindia.gov.in

10. David J. Luck & Ronald S. Rubin, “Marketing Research”,

Ed. – 7 (ISBN)

11. D.C.Anjaria & Dhaivat Anjaria, “AMFI Workbook”, Ed. – 2

(Association of Mutual Funds in India)

http://www.mutualfundsindia.com/

http://www.themanagementor.com/

http://www.dewb-vc.com/

http://www.karvy.com/

http://www.indiacorporateadvisor.com/

http://www.nsdl.co.in/

http://www.incometaxdelhi.nic.in/

http://www.incometaxindia.gov.in/

http://www.mutualfundsindia.com/

http://www.themanagementor.com/

http://www.dewb-vc.com/

http://www.karvy.com/

http://www.indiacorporateadvisor.com/

http://www.nsdl.co.in/

http://www.incometaxdelhi.nic.in/

http://www.incometaxindia.gov.in/



13. ANNEXURE

QUESTIONNAIRE

We assure you that all the information that will be collected from you will remainfully confidential and it is used for study purpose only.

1. As a financial investment adviser which investment options you suggest toyour customers?

Shares Mutual Fund

Insurance Fixed Deposit

Tax Bond PPF

Other

2. Please indicate reason for choosing above.

Returns Risk

Safety Tax Benefits

Timely Brokerage

Other

3. Approximately how many customers you have?

4. What is the brokerage Payment Period?

5. Expected Brokerage Payment Period

6. If a service person who pays Income Tax wants to

invest, generally which option do you suggest forinvestment?



Insurance

Pension Plan

PPF

Infrastructure BondELLS Scheme

Other _______________________________________

7. Are you interested to deal in MF?

Yes

No

If No Why?

8. Do you know about MF services provided by Karvy’s

Jamnagar Branch?

Yes

No

9. In future will you attend seminar arranged by Karvy to guide investors aboutMF?

Yes

No

If No Why?



10. Will you like to work with Karvy Securities Ltd fordealing in mutual fund?

Yes

No

If No Why?

11. Name :

Address :

Phone (O) (R)

Mobile :

Email :



14. GLOSSARY

Corporate advisory services

Merchant bankers offer customised solutions to solve the financial problems of their clients. Merchant bankers study the working capital practices that existwithin the company and suggest alternative policies. They also advise thecompany on rehabilitation and turnaround strategies, which would helpcompanies to recover from their current position. They also provide advice on

appropriate risk management strategies.

Loan syndication

Arrangement of loans for clients, by analysing their cash flow pattern, so thatthe terms of borrowing meet the client’s cash requirements and offer assistancein loan documentation procedures.

Portfolio

Total number of all holdings held by a company is called portfolio. The portfolio mix is aimed at spreading the risk over different sectors. It consists of all assets of company.

NAV

Net Asset Value is the current market worth of the mutual fund

shares. It is calculated daily by taking the funds total assetsecurities, cash and any accrued earning deducting liabilities,

and dividing the reminder by the number of shares

outstanding.



Depository

The principal function of a depository is to dematerialize securities and enabletheir transactions in book-entry form. A depository established under the

Depositories Act can provide any service connected with recording of allotmentof securities or transfer of ownership of securities in the record of a depository.

Capital gain

The profit made from selling shares, mutual funds etc.

IPO

Abbreviation for initial public offering. Generally associated with admission to

listing of the share capital on the stock exchange.

summer internship final

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