C Profile

COMPANY PROFILE
Bajaj Capital is one of Indias leading Financial Services companies offering Free Advice on Investments, Insurance, Tax Saving, Retirement Planning, Financial Planning, Childrens Future Planning and other services. We also have a wide range of products and services for Corporates, High Net worth Individuals, and NRIs all under one roof. At Bajaj Capital, we believe in dreaming big. Dreams inspire us to excel. They ignite hope and kindle in us the passion to stretch our limits. We also believe that nothing can or should stop us from realising our dreams and financial constraints should be the last thing to stop anyone.
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www.final-yearprojects.co.cc | www.troubleshoot4free.com/fyp/
BAJAJ CAPITAL LTD. C.I.M.T
Four decades of excellence For over four decades, we have been helping people realise their aspirations by helping them make their wealth grow, and plan their financial lives. Today, we are a one of the largest financial planning and investment advisory companies in India, with a strong presence all over the country. We take pride in serving our customers both individual and institutional and are known for our strong professionalism and work ethics. Wide range of services We offer a comprehensive range of services including financial planning and investment advice, and the entire gamut of financial instruments and investment products of almost all major companies, both public and private. In addition, we also provide investment assistance by helping you complete all the formalities, and help you keep regular track of your investments. These services and products are delivered through our network of 134 Bajaj Capital Investment Centres located all over the country. We are also a SEBI-approved Category I Merchant Banker. We raise resources for over 1,000 top institutions and corporate houses every year, and
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offer specialised services to Non-Resident Indian (NRIs) and High Networth Clients.
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What you can expect from us Sound, research-based advice Unbiased, independent and need-based advice Prompt, courteous service Honest, ethical dealings
Accessibility
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Milestones
The History of Bajaj Capital Bajaj Capital has contributed to the growth of the Indian Capital Market at every step. In 1965, we were the first to innovate the Companies Fixed Deposit. Today, we are playing an active role in the growth of the Indian Mutual Fund industry. We are also working closely with private insurance companies to deepen India's insurance market. Here is a brief gist of our journey throug the years. 1964 Bajaj Capital sets up its first Investment Centre in New Delhi to guide individual investors on where, when and how to invest.
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India's first Mutual Fund, Unit Trust of India (UTI) is incorporated in the same year. 1965 Bajaj Capital is incorporated as a Company. In the same year, the company introduces an innovative financial instrument the Company Fixed Deposit. EIL Ltd. (Oberoi Hotels, then known as Associated Hotels of India Ltd.) becomes the first company to raise resources through Company Fixed Deposits. 1966 Bajaj Capital expands its product range to include all UTI schemes and Government saving schemes in addition to Company Fixed Deposits. 1969 Bajaj Capital manages its first Equity issue (through an associate company) of Grauer & Wells India Ltd.; right from drafting the prospectus to marketing the issue. 1975 Bajaj Capital starts offering 'need-based' investment advice to investors, which would later be known as 'Financial Planning' in the investment world.
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1981 SAIL becomes the first government company to accept deposits, followed by IOC, BHEL, BPCL, HPCL and others; thus opening the floodgates for growth of retail investment market in India. Bajaj Capital plays an active role in all the schemes as 'Principal Brokers' 1986
Public Sector Undertakings (PSUs) begin making public issues of bonds MTNL, NHPC, IRFC offer a series of Bond Issues. Bajaj Capital is among the top ranks of resource mobilisers. 1987 SBI leads the launch of Public Sector Mutual Funds in India. Bajaj Capital plays a significant role in fund mobilisation for all these players. 1991 SBI issues India Development Bonds for NRIs. Bajaj Capital becomes the top
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mobiliser with collections of over US $20 million. 1993 The first private sector Mutual Fund Kothari Pioneer is launched, followed by Birla and Alliance in the following years. Bajaj Capital plays an active role and is ranked among the top mobilisers for all these schemes. 1995 IDBI and ICICI begin issuing their series of Bonds for retail investors. Bajaj Capital is the co-manager in all these offerings and consistently ranks among the top five mobilisers on an all-India basis. 1997 Private sector players lead the revival of Mutual Funds in India through Openended Debt schemes. Bajaj Capital consolidates its position as India's largest retail distributor of Mutual Funds. 1999 Bajaj Capital begins marketing Life and General Insurance products of LIC and GIC (through associate firms) in anticipation of opening up of the Insurance Sector. Bajaj Capital achieves the milestone of becoming the top 'Pension
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Scheme' seller in India and launches marketing of GIC's Health Insurance schemes. 2000 Bajaj Capital implements its vision of being a 'One-stop Financial Supermarket.' The Company offers all kinds of financial products, including the entire range of investment and insurance products through its Investment Centre. Bajaj Capital offers 'full-service merchant banking' including structuring, management and marketing of Capital issues. Bajaj Capital reinvents 'Financial Planning' in its international sense and upgrades its entire team of Investment Experts into Financial Planners. 2002 The company focuses on creating investor awareness for Financial Planning
and need-based investing. To achieve this goal, the company introduced the International College of Financial Planning. The graduates of this institute become Certified Financial Planners (CFPs), a coveted professional qualification.
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2004 Bajaj Capital obtains the All India Insurance Broking Licence. Simultaneously, a series of wealth creation seminars are launched all over the country, making Bajaj Capital a household name. 2005 Bajaj Capital launches 360 Financial Planning, a software-based programme aimed at encouraging scientific and holistic investing. 2007 Bajaj Capital launches Stock Broking and Depository (Demat) Services. 2008 Bajaj Capital launches Just Trade, an online Platform for investing in Equities, Mutual Funds, IPO's
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MISSION, AIMS & OBJECTIVES

Bajaj Capital's Mission Statement The focus of our organisation is to be the most useful, reliable and efficient provider of Financial Services. It is our continuous endeavour to be a trustworthy advisor to our clients, helping them achieve their financial goals. Aims To serve our clients with utmost dedication and integrity so that we exceed their expectations and build enduring relationships. To offer unparalleled quality of service through complete knowledge of products, constant innovation in services and use of the latest technology. To always give honest and unbiased financial advice and earn our clients' everlasting trust. To serve the community by educating individuals on the merits of Financial Planning and in turn help shape a financially strong society. To create value for all stake holders by ensuring profitable growth. To build an amicable environment that accords respect to every individual and permits their personal growth. To utilise the power of teamwork to function as a family and build a seamless organisation.
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Why Invest Through Bajaj Capital
Wide range of products and services 41 years experience as Investment Advisors and Financial Planners More than eight lakh satisfied clients all over India Countrywide network of 134 branches Over 12,000 NRI clients across the globe Personalised wealth management advice 24 x 7 online accessibility through www.bajajcapital.com Strong team of qualified and experienced professionals including CAs, MBAs, MBEs, CFPs, CSs, Insurance experts, Legal experts and others SEBI-Approved Category I Merchant Bankers Group Co BCIBL is an IRDA-licensed Direct Insurance Broker
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Whos at Bajaj Capital Mr. K.K. Bajaj Chairman A visionary par excellence, a pioneer and a leader, Mr K.K. Bajaj has been instrumental in shaping Bajaj Capitals emergence as one of Indias largest Investment Advisory companies. He is a highly respected figure in the field of institutional and personal finance and Company FDs. His emphasis on honesty, ethics and values are the guiding principles of the organisation. Mr Bajaj is also a prolific writer and has written over 200 articles on diverse issues such as Personal Finance, Economic Affairs, and Health. Mr. Rajiv Deep Bajaj Vice Chairman & Managing Director A qualified Financial Planner, Mr Rajiv Deep Bajaj was the first to introduce the concept of Financial Planning in India. In fact, he is the Founding Chairman of the Association of Financial Planners (AFP). He is also amongst the first
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batch of 25 Certified Financial Planners (CFP tm) designation holders in India. A Post-graduate in Management and holder of an International Certificate for Financial Advisors from the Chartered Insurance Institute, London, Mr Rajiv Deep Bajaj has played a pivotal role in expanding Bajaj Capital's reach across the country. He has recently pursued an Executive MBA in International Wealth Management under an exchange program between University of Geneva, Switzerland and Carnegie Mellon University, Pittsburgh, USA. His youthful energy, dynamic leadership, vision and 16 years strategic management experience in Banking, Financial Advisory, Insurance Broking and Financial Planning have strengthened Bajaj Capital. The Media and Industry honchos have regularly acclaimed Mr. Rajiv Deep Bajaj for his strengths as a powerful orator and writer. His views on various
Investment Strategy and Financial Planning-related issues are regularly flashed in some of the leading media entities like The Economic Times, Business Today, Star TV, CNBC and Aaj Tak. His personal life goal is to spread Financial Education amongst the Indian masses in order to increase their knowledge base and shift their perspective from Saving to Investing.
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Mr. Sanjiv Bajaj Joint Managing Director Mr. Sanjiv Bajaj started his career in 1995 as managerial trainee, worked on various projects which included developments at alternate channel of distribution like Broker's associations...etc. From here, he moved on to Investment Advisory services, which included understanding the client's needs, and by using various tools of financial planning to offer them a solution to meet his requirements. Mr Sanjiv Bajaj is versatile personality with diverse areas of interest. He is a Post-graduate in Business Management with specialisation in Finance, and holds an International Certificate for Financial Advisors from the Chartered Insurance Institute, London. Thanks to him, Bajaj Capital is today the largest individual agent for LIC. Mr Sanjiv Bajaj has a keen interest in IT, and has played a major role in implementing the ERP software and Ecommerce activities in the company Mr. Anil Chopra CEO & Director Mr. Anil Chopra is the Chief Executive Officer & Director of Bajaj Capital Limited, He joined the Company in 1984. Mr. Chopra has been instrumental in expanding the branch network of Bajaj Capital Ltd. all over India. A Chartered Accountant and a Certified Financial Planner, Mr Chopra is
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credited with introducing international accounting and HR practices in the organisation. His most valuable contribution, however, has been in building up a financially literate society and making Bajaj Capital a strong retail brand. He is considered an authority, and is widely sought after by the media for quotes on key developments in the industry. The Significance of Our Logo Our logo depicts Lord Ganesha who is the source of all our values and ethics in business. The large ears of Lord Ganesha remind us to hear more. We listen carefully to our clients to understand their needs. The weight of the trunk on the mouth symbolises silence. We work silently, without blowing our own trumpet. The long trunk symbolises continuous exploration. We explore all avenues to provide the best investment opportunities for our clients. The heavy posture of Ganesha symbolises stability. We help our clients
to attain financial stability through wise investments.

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Lord Ganesha is known as the remover of obstacles and bestower of prosperity. We emulate His example and try our best to help our clients attain prosperity by proper financial planning. Our logo has a yellow background. Yellow is the colour of gold, which symbolises wealth. According to Vedic lore, it is also the colour associated with Brihaspati, the guru and counsellor of the Gods. We offer our clients sage counsel to make their wealth grow. The letters are in red. Red is the colour rajas symbolising power and incessant activity. It symbolises our aggressive quest for your well-being and happiness. The white streak represents the trunk of Lord Ganesha. White is the colour of satva guna, and implies our selfless commitment to your lifelong happiness.
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360 0 FINANCIAL PLANNING AND AWARENESS OF BAJAJ CAPITAL

Experience the power of Bajaj Capital's 360 The only thing permanent in life is change. Times change. People change. So does life. You expect life to be much better tomorrow than it is today. Tomorrow, you hope to fulfil all your dreams and aspirations. But what happens if things take an untoward turn? Or, if there is an eventuality? Perhaps it's time for you to change the way you plan your investments... Learn more about Bajaj Capital's 360o Financial Planning
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Why
do you need Bajaj Capital's 360 Financial Planning? Who needs 360 Financial Planning? What is 360 Financial Planning all about? How will 360 Financial Planning help me? How do I get my personalised 360 Financial Plan created?
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Dont just dream... Plan! Financial Planning is becoming increasingly popular in developed countries all over the world. Now, with a little help from Bajaj Capital, you too can give yourself the 360 Financial Planning edge! Get your Financial Plan prepared now Why do you need Bajaj Capital's 360 Financial Planning?
You may have many dreams, needs and desires. For example, you could be dreaming of: Owning a new car Buying a dream house Providing your children with the best education Planning a grand wedding for your children Having a great time after your retirement But in today's world of skyrocketing costs and increasing inflation, how many of these dreams can you hope to turn into reality? By planning well, you can utilise your limited resources to the fullest. 360 Financial Planning helps you see the big picture and invest for specific long-term and short-term goals well in time. Who needs 360 Financial Planning?
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Everyone does! Because everyone has a right to dream. And realising dreams is easier when you work to a plan that's: Reliable Realistic Proven Bajaj Capital's 360 Financial Planning Programme could make a difference to all those who wish to lead a worry-free, financially secure life. What is 360 Financial Planning all about? 360 Financial Planning is a unique software-based simulation that takes a holistic view of your life-long financial needs and charts a personalised investment strategy to help you meet them. Broadly, it involves: Identifying your current financial status Listing and prioritising your goals Creating a sound investment plan to achieve them Monitoring the plan to facilitate swift corrective action, if needed 360 Financial Planning is based on the premise that every individual has certain basic financial needs that are expressed at various stages of life (getting married, buying assets like homes, vehicles, or providing for your children's education and wedding). With the help of 360Financial Planning, you can
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prepare yourself well in time for all these goals. How will 360 Financial Planning help me? Instead of investing in an ad-hoc manner, 360 Financial Planning helps you take a holistic, all-round view. Briefly, 360 Financial Planning comprises: Investment Planning : To make your wealth grow Cash Flow Planning : To provide for assets and meet the periodic cash requirements Tax Planning : To save on taxes and increase your income Insurance Planning : To protect yourself, your family and your assets Children's Future Planning : To give your children a financially secure
future Retirement Planning : Because retirement is a time to relax, not to get worried Top How do I get my personalised 360 Financial Plan created? Heres how Financial Plans are prepared: The process begins with identifying your needs with the help of the Need Analysis Form. Our Financial Planners then use the especially-created
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360 Financial Planning software to generate a personalised Snapshot. The Snapshot gives you a graphic account of all your financial requirements, at every stage of your future life. Based on the Snapshot, our experts work out an investment strategy. Once implemented, our experts keep regular track of your investments. A Financial Planning session takes just 15 minutes
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Investment Planning Everyone needs to save for a rainy day. Once you have saved enough to take care of emergencies, you should start thinking about investing and to make your money grow. We can help you plan your investments so that you can reap adequate benefits and achieve your financial goals. Bajaj Capitals Investment Planning Service includes: Risk Profiling Asset Allocation and Portfolio Construction Creation and Accumulation of Wealth through Systematic Investment Plans (SIP) Regular review of progress and Portfolio Rebalancing Essentially, Investment Planning involves identifying your financial goals throughout your life, and prioritising them. Investment Planning is important because it helps you to derive the maximum benefit from your
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investments. Your success as an investor depends upon your ability to choose the right investment options. This, in turn, depends on your requirements, needs and goals. For most investors, however, the three prime criteria of evaluating any investment option are liquidity, safety and return. Investment Planning also helps you to decide upon the right investment strategy. Besides your individual requirement, your investment strategy would also depend upon your age, personal circumstances and your risk
appetite. These aspects are typically taken care of during investment planning. Investment Planning also helps you to strike a balance between risk and returns. By prudent planning, it is possible to arrive at an optimal mix of risk and returns, that suits your particular needs and requirements.
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What Is Cash Flow Planning? In simple terms, cash flow refers to the inflow and outflow of money. It is a record of your income and expenses. Though this sounds simple, very few people actually take the time out to find out what comes in and what goes out of their hands each month Cash flow planning refers to the process of identifying the major expenditures in future (both short-term and long-term) and making planned investments so that the required amount is accumulated within the required time frame. Cash flow planning is the first thing that should be done prior to starting an investment exercise, because only then will you be in a position to know how your finances look like, and what is it that you can invest without causing a strain on yourself. It will also enable you to understand if a particular investment matches with your flow requirement. So does it involve looking at future cash flows only? Not really. You should always do a cash flow for yourself as on date, and you will realize that you could have a potential savings amount within each month of your working life. This is the amount that you should look at saving for meeting your financial goals. The best way of doing this is to have a personal budget.
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Why is cash flow planning important? Cash flow plans are commonly used by business houses. Without a viable cash flow plan, a company could easily spend more than its revenue, putting it in peril. Unfortunately, most of us do not realise that a cash flow plan is as important for people like us as well. The principles that apply to corporate finance and to our personal lives are largely the same. There has never been a bigger need than today for families and individuals to work out cash flow plans. Without proper cash flow planning one could easily get caught in the debt trap. Of course, it goes without saying that creating a plan is not enough. One also needs to implement the plan, besides bringing about a change in the spending habits. Cash flow plan brings you face-to-face with what you should ideally be saving, and investing in a systematic and regular manner, and what would it mean to you to withdraw from your portfolio after a couple of years. It brings down in numbers what your financial future has in store for you, and gives a crystal
clear view (as much as is possible with inflation and the interest rate scenario).
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Tax Planning - Introduction Proper tax planning is a basic duty of every person which should be carried out religiously. Basically, there are three steps in tax planning exercise. These three steps in tax planning are: Calculate your taxable income under all heads ie, Income from Salary, House Property, Business & Profession, Capital Gains and Income from Other Sources. Calculate tax payable on gross taxable income for whole financial year (i.e.,From 1st April to 31st March) using a simple tax rate table, given on next page. After you have calculated the amount of your tax liability. You have two options to choose from: 1. Pay your tax (No tax planning required) 2. Minimize your tax through prudent tax planning. Most people rightly choose Option 'B'. Here you have to compare the advantages of several tax saving schemes and depending upon your age, social liabilities, tax slabs and personal preferences, decide upon a right mix of
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investments, which shall reduce your tax liability to zero or the minimum possible. Every citizen has a fundamental right to avail all the tax incentives provided by the Government. Therefore, through prudent tax planning not only income-tax liability is reduced but also a better future is ensured due to compulsory savings in highly safe Government schemes. We sincerely advise all our readers and clients to plan their investments in such a way, that the post-tax yield is the highest possible keeping in view the basic parameters of safety and liquidity
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The Need For Insurance Planning "Insurance is not for the person who passes away, it for those who survive," goes a popular saying that explains the importance of Insurance Planning. It is extremely important that every person, especially the breadwinner, covers the risks to his life, so that his family's quality of life does not undergo any drastic change in case of an unfortunate eventuality. It is extremely important that every person, especially the breadwinner, covers the risks to his life, so that his family's quality of life does not undergo any drastic change in case of an unfortunate eventuality.
Insurance Planning is concerned with ensuring adequate coverage against insurable risks. Calculating the right level of risk cover is a specialised activity, requiring considerable expertise. Proper Insurance Planning can help you look at the possibility of getting a wider coverage for the same amount of premium
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or the same level of coverage for the same amount amount of premium or the same level of coverage for a reduced premium. Hence, the need for proper insurance planning. Insurance, simply put, is the cover for the risks that we run during our lives. Insurance enables us to live our lives to the fullest, without worrying about the financial impact of events that could hamper it. In other words, insurance protects us from the contingencies that could affect us. So what are the risks that we run? To name a few - the risk on our lives that is, the worries of replacement of the incomes that we contribute to the running of the household), the risks of medical contingencies (since they have the capability of depleting our wealth considerably) and risks to assets (since the replacement of these can have tremendous financial implications). If we can imagine a situation where our goals are disturbed by acts beyond our control, we can realise the relevance of insurance in our lives. Insurance Planning takes into account the risks that surround you and then provides an adequate coverage against those risks. There is no risk not worth insuring yourself against, and insurance should first and foremost be looked as a measure to guard against risks - the risk of your dreams going awry due to events beyond your control
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Children's Future Planning

Like every parent, you too must be overjoyed to watch your child grow. All parents want to give the best possible upbringing to their children. This includes good education and security, in case of any eventuality. Soon, your little bundle of joy will grow up, and it will be time to provide for his or her higher education and wedding. The purpose of Children's Future Planning is to create a corpus for foreseeable expenditures such as those on higher education and wedding, and to provide for an adequate security cover during their growing years. Children's Future Planning acquires added importance because children's education and wedding are high priority life goals, which can neither be postponed nor can there be a compromise on the amount. Good education has always been the passport to a secure future. Today, career opportunities have grown manifold, and there are many professional course that your Page | 41
BAJAJ CAPITAL LTD. C.I.M.T child can aspire for. However, costs of higher education have also increased exponentially.
Like most parents, you might be saving regularly to ensure a safe tomorrow for your child. However, savings alone is no longer enough. For ensuring adequate funding of your child's education, you as a parent, need to do two things: Invest appropriate amount systematically and at regular intervals Provide for a financial security blanket to cover any eventuality It is never too early to start saving and investing for your child's future. Especially in today's context. For example, the cost of a professional degree today is approximately Rs 2.5 lakhs. If your child is one-year-old today, after 17 years when he/she goes to college, you may require a sum of Rs 6.3 lakhs, assuming an annual rate of inflation of 6%. There are many products which your Financial Planner can use to achieve the above objectives. For example, he could suggest a Children's Future Plan offered by any good insurance company, to build a corpus for your child's higher education, and provide for a security cover in the event of the parent's unfortunate demise. Children's plans are also available under unit-linked option. Being unit-linked, they offer access to investments in all kinds of asset classes - equity, debt and cash. Page | 42
Retirement Planning Some like it. Some dont. But retirement is a reality for every working person. Most young people today think of retirement as a distant reality. However, it is important to plan for your post-retirement life if you wish to retain your financial independence and maintain a comfortable standard of living even when you are no longer earning. This is extremely important, because, unlike developed nations, India does not have a social security net. Retirement Planning acquires added importance because of the fact that though longevity has increased, the number of working years havent.
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Our Retirement Planning Service involves: Computing that amount that would be required post-retirement. This is done after taking inflation and time value of money into account. Building your Retirement Corpus using Systematic Investment Plans (SIPs) and other long-term growth orient products Ensuring adequate post-retirement income through safe investments. The asset allocation and selection of investment vehicles keep changing as your risk-bearing capacity diminishes.
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Plan for A Worry Free Retirement In simple words, retirement planning means making sure you will have enough money to live on after retiring from work. Retirement should be the best period of your life, when you can literally sit back and relax or enjoy your life by reaping benefits of what you earn in so many years of hard work. But it is easier
said than done. To achieve a hassle-free retired life, you need to make prudent investment decisions during your working life, thus putting your hard-earned money to work for you in future.
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Why is it important? India, unlike other countries, does not have state-sponsored social security for the retired people. And after several decades when pensions provided many people with a large chunk of money they needed to live comfortably after they retired, things are changing. While you may be entitled to a pension, or income during retirement, in the new economic era, you are increasingly likely to be responsible for providing for your own needs. Although the compulsory savings in provident fund through both employee and employer contributions should offer some cushion, it may not be enough to support you throughout your retirement. That is why retirement planning is extreme ly important for every one. There are many reasons for the working individuals to secure their future emergence of nuclear families and its attendant insecurity, increasing uncertainties in personal and professional life, the growing trends of seeking early retirement and rising health risks are among few important risks. Besides falling interest rates and the sustained increase in the cost of living make it a compelling case for individuals to plan their finances to fund their retired life. Planning for retirement is as important as planning your career and marriage. Life takes its own course and from the poorest to the wealthiest, no one gets
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spared. "Everyone grows older". We get older every day, without realising. However, we assume that old age is never going to touch us. The future depends to a great extent on the choices you make today. Right decisions with the help of proper planning, taken at the right time will assure smile and success at the time of retirement.
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PLAN FOR A WORRY FREE RETIREMENT In simple words, retirement planning means making sure you will have enough money to live on after retiring from work. Retirement should be the best period of your life, when you can literally sit back and relax or enjoy your life by reaping benefits of what you earn in so many years of hard work. But it is easier said than done. To achieve a hassle-free retired life, you need to make prudent investment decisions during your working life, thus putting your hard-earned money to work for you in future.
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Why is it important? India, unlike other countries, does not have state-sponsored social security for the retired people. And after several decades when pensions provided many people with a large chunk of money they needed to live comfortably after they retired, things are changing. While you may be entitled to a pension, or income during retirement, in the new economic era, you are increasingly likely to be responsible for providing for your own needs. Although the compulsory savings in provident fund through both employee and employer contributions should offer some cushion, it may not be enough to support you throughout your retirement. That is why retirement planning is extreme ly important for every one. There are many reasons for the working individuals to secure their future emergence of nuclear families and its attendant insecurity, increasing uncertainties in personal and professional life, the growing trends of seeking early retirement and rising health risks are among few important risks. Besides falling interest rates and the sustained increase in the cost of living make it a compelling case for individuals to plan their finances to fund their retired life. Planning for retirement is as important as planning your career and marriage. Life takes its own course and from the poorest to the wealthiest, no one gets
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spared. "Everyone grows older". We get older every day, without realising. However, we assume that old age is never going to touch us. The future depends to a great extent on the choices you make today. Right decisions with the help of proper planning, taken at the right time will assure smile and success at the time of retirement.
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INVESTMENTS
Mutual Funds are among the hottest favourites with all types of investors. Investing in mutual funds ranks among one of the preferred ways of creating wealth over the long term. In fact, mutual funds represent the hands-off approach to entering the equity market. There are a wide variety of mutual funds that are viable investment avenues to meet a wide variety of financial goals. This section explains the various aspects of Mutual Funds. What are Mutual Funds? Why choose Mutual Funds? Types of Mutual Funds Snapshot of Mutual Fund Schemes Choosing the Right Mutual Fund Scheme How to calculate the growth of your Mutual Funds Investments? Points to Remember
Glossary What are Mutual Funds ? A Mutual Fund is a trust that pools together the savings of a number of investors who share a common financial goal. The fund manager invests this pool of money in securities -- ranging from shares and debentures to money market instruments or in a mixture of equity and debt, depending upon the objectives of the scheme. Page | 51
BAJAJ CAPITAL LTD. C.I.M.T Why choose Mutual Funds ? Investing in Mutual Funds offers several benefits: Professional expertise: Fund managers are professionals who track the market on an on-going basis. With their mix of professional qualification and market knowledge, they are better placed than the average investor to understand the markets Diversification: Since a Mutual Fund scheme invests in number of stocks and/or debentures, the associated risks are greatly reduced. Relatively less expensive: When compared to direct investments in the capital market, Mutual Funds cost less. This is due to savings in brokerage costs, demat costs, depository costs etc. Liquidity: Investments in Mutual Funds are completely liquid and can be redeemed at their Net Assets Value-related price on any working day. Transparency: You will always have access to up-to-date information on the value of your investment in addition to the complete portfolio of investments, the proportion allocated to different assets and the fund managers investment strategy. Flexibility: Through features such as Systematic Investment Plans, Systematic Withdrawal Plans and Dividend Investment Plans, you can systematically invest or withdraw funds according to your needs and convenience. Page | 52
BAJAJ CAPITAL LTD. C.I.M.T SEBI regulated market: All Mutual Funds are registered with SEBI and function within the provisions and regulations that protect the interests of investors. AMFI is the supervisory body of the Mutual Funds industry. Page | 53
BAJAJ CAPITAL LTD. C.I.M.T Types of Funds There are a wide variety of Mutual Fund schemes that cater to your needs, whatever your age, financial position, risk tolerance and return expectation. Whether as the foundation of your investment program or as a supplement, Mutual Fund schemes can help you meet your financial goals. The different types of Mutual Funds are as follows: Diversified Equity Mutual Fund Scheme A mutual fund scheme that achieves the benefits of diversification by investing in the stocks of companies across a large number of sectors. As a result, it minimizes the risk of exposure to a single company or sector. Sectoral Equity Mutual Fund Scheme A mutual fund scheme which focuses on investments in the equity of companies across a limited number of sectors -- usually one to three.
Index Funds These funds invest in the stocks of companies, which comprise major indices such as the BSE Sensex or the S&P CNX Nifty in the same weightage as the respective indice. Equity Linked Tax Saving Schemes (ELSS) Mutual Fund schemes investing predominantly in equity, and offering tax deduction to investors under section 80 C of the Income Tax Act. Currently rebate u/s 80C can be Page | 54
BAJAJ CAPITAL LTD. C.I.M.T availed up to a maximum investment of Rs 1,00,000. A lock-in of 3 years is mandatory. Monthly Income Plan Scheme A mutual fund scheme which aims at providing regular income (not necessarily monthly, don't get misled by the name) to the unitholder, usually by way of dividend, with investments predominantly in debt securities (upto 95%) of corporates and the government, to ensure regularity of returns, and having a smaller component of equity investments (5% to 15%)to ensure higher return. Income schemes Debt oriented schemes investing in fixed income securities such as bonds, corporate debentures, Government securities and money market instruments. Floating-Rate Debt Fund A fund comprising of bonds for which the interest rate is adjusted periodically according to a predetermined formula, usually linked to an index. Gilt Funds - These funds invest exclusively in government securities. Balanced Funds The aim of balanced funds is to provide both growth and regular income as such schemes invest both in equities and fixed income securities in the proportion indicated in their offer documents. They generally invest 40-60% in equity and debt instruments. Fund of Funds Page | 55
BAJAJ CAPITAL LTD. C.I.M.T A Fund of Funds (FoF) is a mutual fund scheme that invests in other mutual fund schemes. Just as fund invests in stocks or bonds on your behalf, a FoF invests in other mutual fund schemes. Mutual Fund Type Objective Risk Investment Portfolio Who should invest Investment horizon Money Market Liquidity + Moderate Income + Reservation of
Capital Negligible Treasury Bills, Certificate of Deposits, Commercial Papers, Call Money Those who park their funds in current accounts or short-term bank deposits 2 days - 3 weeks Shortterm Funds (Floating shortterm) Liquidity + Moderate Income Little Interest Rate Call Money, Commercial Papers, Treasury Bills, CDs, Shortterm Government securities. Those with surplus short-term funds 3 weeks 3 months Bond Funds Regular Income Credit Risk & Interest Rate Predominantly Debentures, Salaried & conservative More than 9 - 12 months Page | 56
BAJAJ CAPITAL LTD. C.I.M.T (Floating Longterm) Risk Government securities, Corporate Bonds investors Gilt Funds Security & Income Interest Rate Risk Government securities Salaried & conservative investors 12 months & more Equity Funds Long-term Capital Appreciation High Risk Stocks Aggressive investors with long term out look. 3 years plus Index Funds To generate returns that are commensurate with returns of respective indices NAV varies with index performance Portfolio indices like BSE, NIFTY etc Aggressive investors. 3 years plus Balanced
Funds Growth & Regular Income Capital Market Risk and Interest Rate Risk Balanced ratio of equity and debt funds to ensure igher returns at lower risk Moderate & Aggressive 2 years plus How to choose the right Mutual Fund scheme Page | 57
BAJAJ CAPITAL LTD. C.I.M.T Once you are comfortable with the basics, the next step is to understand your investment choices, and draw up your investment plan relevant to your requirements. Choosing your investment mix depends on factors such as your risk appetite, time horizon of your investment, your investment objectives, age, etc. What should be kept in mind before investing in Mutual Funds ? Mutual Fund investment decisions require consistent effort on the part of the investor. Before investing in Mutual Funds, the following steps must be given due weightage to decide on the right type of scheme: 1. Identifying the Investment Objective 2. Selecting the right Scheme Category 3. Selecting the right Mutual Fund 4. Evaluating the Portfolio A) Identifying the Investment Objective Your financial goals will vary, based on your age, lifestyle, financial independence, family commitments, level of income and expenses, among many other factors. Therefore, the first step is to assess you needs. Begin by asking yourself these simple Page | 58
BAJAJ CAPITAL LTD. C.I.M.T questions: Why do I want to invest? The probable answers could be: "I need a regular income" "I need to buy a house/finance a wedding" "I need to educate my children," or A combination of all the above How much risk am I willing to take? The risk-taking capacity of individuals vary depending on various factors. Based on their risk bearing capacity, investors can be classified as: Very conservative
Conservative Moderate Aggressive Very Aggressive
To ascertain your risk appetite, try out our Risk Thermometer. What are my cash flow requirements? Page | 59
BAJAJ CAPITAL LTD. C.I.M.T For example, you may require: A regular Cash Flow A lumpsum after a fixed period of time for some specific need in the future Or, you may have no need for cash, but you may want to create fixed assets for the future B) Selecting the scheme category The next step is to select a scheme category that matches your investment objectives: For Capital Appreciation go for equity sectoral funds, equity diversified funds or balanced funds. For Regular Income and Stability you should opt for income funds/MIPs For Short-Term Parking of Funds go for liquid funds, floating rate funds, shortterm funds. For Growth and Tax Savings go for Equity-Linked Savings Schemes.
Investment Objective Investment horizon Ideal Instruments Short-term Investment 1- 6 months Liquid/Short-term plans Capital Appreciation Over 3 years Diversified Equity/ Balanced Funds
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Regular Income Flexible Monthly Income Plans / Income Funds Tax Saving 3 yrs lock-in Equity-Linked Saving Schemes (ELSS)
C) Selecting the right Mutual fund Once you have a clear strategy in mind, you now have to choose which Mutual fund and scheme you want to invest in. The offer document of the scheme tells you its objectives and provides supplementary details like the track record of other schemes managed by the same Fund Manager. Some important factors to evaluate before choosing a particular Mutual Fund are: The track record of performance over that last few years in relation to the appropriate yardstick and similar funds in the same category. How well the Mutual Fund is organized to provide efficient, prompt and personalized
service. The degree of transparency as reflected in frequency and quality of their communications. D) Evaluation of portfolio Evaluation of equity fund involve analysis of risk and return, volatility, expense ratio, fund managers style of investment, portfolio diversification, fund managers experience. Page | 61
BAJAJ CAPITAL LTD. C.I.M.T Good equity fund should provide consistent returns over a period of time. Also expense ratio should be within the prescribed limits. These days fund house charge around 2.50% as management fees. Evaluation of bond funds involve it's assets allocation analysis, return's consistency, its rating profile, maturity profile, and its performance over a period of time. The bond fund with ideal mix of corporate debt and gilt fund should be selected. Page | 62
BAJAJ CAPITAL LTD. C.I.M.T How to calculate the growth of your Mutual Fund investments ? Let's assume that Mr. Gupta has purchased Mutual Fund units worth Rs. 10,000 at an NAV of Rs. 10 per unit on February 1. The Entry Load on the Mutual Fund was 2%. On September 15, he sold all the units at an NAV of Rs 20. The exit load was 0.5%. His growth/ returns is calculated as under: 1. Calculation of Applicable NAV and No. of units purchased: (a) Amount of Investment = Rs. 10,000 (b) Market NAV = Rs. 10 (c) Entry Load = 2% = Rs. 0.20 (d) Applicable NAV (Purchase Price) = (b) + (c) = Rs. 10.20 (e) Actual Units Purchased = (a) / (d) = 980.392 units 2. Calculation of NAV at the time of Sale (a) NAV at the time of Sale = Rs 20 (b) Exit Load = 0.5% or Rs.0.10 (c) Applicable NAV = (a) (b) = Rs. 19.90 3. Returns/Growth on Mutual Funds Page | 63
BAJAJ CAPITAL LTD. C.I.M.T (a) Applicable NAV at the time of Redemption = Rs. 19.90 (b) Applicable NAV at the time of Purchase = Rs. 10.20 (c) Growth/ Returns on Investment = {(a) (b)/(b) * 100} = 95.30% Points to Remember Do not speculate: Always evaluate risk-taking capacity. Do not chase returns: Because what goes up must come down. Do not put all eggs in one basket: Diversification reduces the risk. Do not stop working on Mutual Funds: Continuous evaluation of funds is a must. Do not time the market: Every time is good for investments. Mutual Funds are subject to market risks and there is no assurance that the fund objective will be achieved.
NAVs fluctuate depending on forces affecting the Capital market. Past performance may or may not be sustained in the future.
Assets Management Company: A highly regulated organization that pools money from many people into portfolio structured to achieve certain objectives. Typically an AMC manages several funds open ended/ close ended across several categories- growth, income, balanced. Balanced Fund: A hybrid portfolio of stocks and bonds. Page | 64
BAJAJ CAPITAL LTD. C.I.M.T Close Ended Fund: They neither issue nor redeem fresh units to investors. Some closed ended funds can be bought or sold over the stock exchange if the fund is listed. Else, investor have to wait till redemption date to exit. Most listed close ended funds trade at discount to the NAV. Open Ended Fund: A diversified and professionally managed scheme, it issues fresh units to incoming investors at NAV plus any applicable sales charge, and it redeems shares at NAV from sellers, less any redemption fees. Entry/ Exit Load: A charge paid when an investor buys/sells a fund. There could be a load at the time of entry or exit, but rarely at both times. Expense Ratio : The annual expenses of the funds, including the management fee, administrative cost, divided by the fund under management. Growth/Equity Fund: A fund holding stocks with good or improving profit prospects. The primary emphasis is on appreciation. Liquidity: The ease with which an investment can be bought or sold. A person should be able to buy or sell a liquid asset quickly with virtually no adverse price impact. Net Assets Value : A price or value of one unit of a fund. It is calculated by summing the current market values of all securities held by the fund, adding the cash and any accrued Page | 65
BAJAJ CAPITAL LTD. C.I.M.T income, then subtracting liabilities and dividing the result by the number of units outstanding. Interest Rate Risk: The risk borne by fixed-interest securities, and by borrowers with floating rate loans, when interest rates fluctuate. When interest rates rise, the market value of fixed-interest securities declines and vice versa. Credit Risk: Credit risk involves the loss arising due to a customers or counterpartys inability or unwillingness to meet commitments in relation to lending, trading, hedging, settlement and other financial transactions. Capital Market Risk : Capital Market Risk is the risk arising due to changes in the Stock Market conditions. Page | 66
INTRODUCTION
Investment options 1. Insurance 2. PPF- Public provident fund 3. NSC- National Saving Certificate
4. Post Office Saving schemes 5. Mutual fund 6. Bank Saving Schemes 7. Securities 8. Real Estate

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MISSION, AIMS & OBJECTIVES

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Why Invest Through Bajaj Capital

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to attain financial stability through wise investments.

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360 0 FINANCIAL PLANNING AND AWARENESS OF BAJAJ CAPITAL

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Children's Future Planning

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Conservative Moderate Aggressive Very Aggressive

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