RESEARCH REPORT

ON
A Comparison between Investment & Savings Of ASHLAR GROUP In Partial Fulfillment of Award of Master of Business Administration

MBA (2010-2012)

Under the Supervision of

Mr. Atul Narang
Asst. Professor Department of MBA
By

Bhupendra Kumar Dixit (1000170009)

ANAND ENGINEERING COLLAGE AGRA

Affiliated - Mahamaya Technical University, Noida

DECLARATION

I, Bhupendra Kumar Dixit Student of MBA IVth sem Anand Engineering College, Agra Batch 2010-12, hereby declare that the Research Project titled A Comparison between Investment & Savings Of ASHLAR GROUPis the outcome of my own work and the same has not been submitted to any other University /institution for the award of any degree.

DATE: PLACE: AGRA

Bhupendra Kumar Dixit

ACKNOWLEDGEMENT
This is a great opportunity to acknowledge and to thanks all those persons without whose support and help this research report would have been impossible. We would like to add a few heartfelt words for the people who were part of this project in numerous ways. I am very grateful to Mr. Atul Narang (Project Guide) , for providing all the facilities needed during the research.

Bhupendra Kumar Dixit MBA IVth Sem

PREFACE
A research project report is the very important part of any management programme. It is a Launch Pad for introducing students to a real-life scenario, which cannot be simulated in the classroom. It not only enables the student to apply the theoretical knowledge in a practical scenario but also enables them to learn things beyond books. This is a period where the students add value to them self and learn management skills as well as the corporate culture.

Only academic knowledge is not enough for the students, it is also necessary for them to have a slice of the practical corporate world wherein they can apply their knowledge and put their skills to a test. This is a first step towards corporate world.

A research project report provides an opportunity for students, to satisfy their inquisitiveness to know more details, exposes them to technical skills, and helps them to acquire social skills by drawing them into communication with outside professionals for continuous interaction.

TABLE OF CONTENTS
TOPICS
INTRODUCTION TO THE TOPIC OBJECTIVE OF THE PROJECT METHODOLOGY LIMITATIONS OF THE PROJECT INTRODUCTION TO HUL DISTRIBUTION NETWORK OF HUL SUGGESTED GIFTING PACKS OF HUL PRODUCTS FINDINGS OF PROJECT SUGGESTIONS CONCLUSION BIBLIOGRAPHY ANNEXURES

PAGE NO.

6 8 11 13 14 26 57 63 68 71 83

OBJECTIVES

To find out the various investment and saving scheme in Ashlar Group. To locate the investment and saving sources in Ashlar Group To determine the capital structure of company. To understand the nature of interest, repayment method and other participative rights associated with financing sources. To incorporate the various sources through which a company may meet its financial needs.

RESEARCH METHODOLOGY
COLLECTION OF DATA: Primary Data- The data which is collected for the first time and is the original data. Personal interaction Questionnaire Secondary Data- This is the data which is collected from any other source and is the duplicate data. Books Journals Internet Company documents RESEARCH DESIGN : Descriptive Design Research Instrument : Neither Structures nor disguised Questionnaire for retailers.

 But there are a specific Questionnaire for house hold customers for finding their opinion.

SAMPLING PLAN:Sampling Method : Non-Probability Sampling] Sample Size : 100 Dealer 1000 House hold customers Sample Unit: Noida Sample Area : Noida Sampling [Convenience & Quota

LIMITATIONS OF THE STUDY

This survey although carried out with fullest possible efforts and devotion, the limitation of the time, resources available and limited area chose may lead to limited representation of the universe. The major limitations from which the study suffers are as follows. Time Constraint:Time factor has been a very big limitation in the

research/survey like this. The respondents have limited time so they sometimes refuse to answer the questionnaire, also me as a surveyor has less time to conduct the survey. So the size of the sample was restricted to Agra. Biasness in Information:It was felt that respondent did not come up with true responses, in several case the respondent answered the

questions with the help of other family members and it was mostly in case of less educated person.

Financial Constraint:The financial aspect, which includes the traveling cost, cost of administrating questionnaire and collection of data through other resources was also costly. Constraint Regarding the use of technique:The deeper statistical techniques such as analysis using variance, multiple regressions etc., could not be adopted due to the constraint of time and efforts. So simple statistical techniques were used to analyze the data.

Company Profile
ASHLAR group has progressed as one of the foremost executing broker dealer across India. Here we offer direct market access, refined trading applications and radical expertise to institutional and individual clients. Our company is also specialized in offering custom-made solutions that is appropriate to each individual investor's needs. Our area of proficiency includes Commodity Trading, Derivatives, innovative thought process and most of all focuses on equities.

We operate from the head office at A-38 Sector -67 Noida -201301. Our office is set with a prominent spacious location with all the contemporary facilities and utilities for our valued customers. Besides our branch offices are well-resourced with NSE Trading terminals, skilled customer support personnel and other infrastructures.

ASHLAR provides advices for Stocks- Cash and F&O traded in NSE & BSE, commodities including bullions, metals and agro-commodities traded in MCX and NCDEX. We offer prompt and efficient services, and a long record of success.

ASHLAR is absolutely a leader in the ground of servicing commodities traders. Today we have emerged as one of the most valued Stock-Broking Companies in India. With its exceptional retail-focused stock trading business replica, ASHLAR is unswerving in providing Real Value for Money to all its cust omers.

There will be a complete market research on permanent basis and we vitally scrutinize each and every market information. Moreover we also have exposed to fairly innovative sources of data that helps to keep ahead to identify the market trends.

Nowadays the fast growing market demands inclusive front to back office resolution in order to be competitive. ASHLAR identifies the challenges institutions face, and endeavors to offer the latest revolutionary solutions to have an impact where it counts, the bottom line.

We aim in offering perfect execution support to meet our various client needs on a stage of professionalism and reliability. Infrastructure Facilities ::

ASHLAR offers universal access to the customers and facilities infrastructure that has VSATs and Leased Lines which is directly connected to NSE trading hubs.

We have platform on the trading terminals of NSE and CTCL (Computerto-Computer Link Facility) that is operated by NCFM and comes with well-qualified staff.

VPN (Virtual Private Network) facility helps in connecting its branches to the Head office.

Offices are well-furnished with latest systems, servers and other hardware and software. You can find the latest Share Broker Accounting package at ASHLAR

There are manifold access solutions to suit your desires, linking directly via backbone or through extensive reach with extranet partners.

Infrastructural facilities help in retail equity broking, online investment portal and depository services.

The e-mail facility is offered in all the branch offices that work both on local network as well as through internet for fast, smooth and effective communication.

A team of skilled chartist is being consistently giving better & better suggestions on shares and other commodities.

Working in partnership
The Ashlar Group has a wide range of skills and expertise specific to the building and development market. Over the years the we have developed a number of strategic residential and commercial projects in partnership with land owners. With gross development values from 1m-8m, we offer a close and open working partnership that enables all parties to maximise returns and foster future relationships. To date we have undertaken projects as diverse as classic heritage restoration through to to modern new build. By drawing on the Group's considerable in-house services, we are able to deliver a controlled program that encompasses all aspects from planning consultancy through to final build.

Vision & Mission

::

To offer the best value for money to the investors through ground-breaking products trading/investments policies, state of the art know-how and tailored service.

To have inclusive synchronization between quality-in-process and in the constant development to deliver outstanding service that will delight our customers

Committed in providing top-notch products and services which surpass the expectations of our customers.

Our Strength

::

The Biggest Strength of our group are the ethical workings & finding the most profitable solution for everyone .Whether it is day traders, jobbers or short term & long term investors.

We strongly Believe that potentional of growth is actually unlimited .

Provided we have innovative ideas, conviction and a professional approach to implement it.

ASHLAR COMMODITIES PVT LTD ASHLAR SECURITIES PVT LTD

Registered Office: A-38, Sector-67, Noida-201301 Phone No: 0120-2484747, 7503323232 Fax No: 07503121155 Email: Info@ashlarindia.com

Corporate Office: 411,Arunachal Bhawan, 19,Barakhamba Road, New Delhi-110001 Phone No: 011-47464746 Fax No: 011-43084662

Head Office: A-38, Sector-67, Noida-201301 Phone No: 0120-2484747, 7503323232 Fax No: 07503121155 Email: Info@ashlarindia.com URL: www.ashlarindia.com Branches Meerut: IInd Floor, Abu Lane, Abu Plaza, Meerut Cantt. Meerut-250002 Phone: +91-01214056788 E-mail: meerut@ashlarindia.com ::

Bundelkhand: Malakpura Mahoba UP-210427 Contact Person : Vineet Kumar Trivedi Phone: +91-9415890801 E-mail: vineet_trivedi74@yahoo.in

Product & services

Commodity Trading With the world's progressive shift toward a market economy and globalisation, the Commodity Futures market is playing an increasingly important role in forming prices and hedging risk. Ashlar is a reputed name in the field of commodity trading. Ashlar is a member of both the leading commodity exchanges of India, MCX and NCDEX. ::

Ashlar gives certain benefits to their clients such as: fast and accurate order execution, instant access to information regarding their account, personalised attention for large and small investors, and the final decision on when and how to invest is always the client's choice. Ashlar also equips you with reliable research, based on technical and fundamental study of all major commodities.

The future for commodity market is bright. It is noteworthy that the Commodity and Equity markets have been moving in tandem, bucking the global market trend. We are currently facilitates trading of following products : NCDEX Agro Products : Barley, Cashew, Castor Seed, Chana, Chilli, Coffee-Arabica, Coffee-Robusta Cherry AB, Cotton Seed Oilcake, Crude Palm Oil, Coriander, Expeller Mustard Oil, Groundnut (in shell), Groundnut Expeller Oil, Guar Gum, Guar Seeds, Gur, Indian Parboiled Rice, Indian Pusa Basmati Rice, Indian Raw Rice, Indian Traditional Basmati Rice, Indian 28.5 mm Cotton, Indian 31 mm

Cotton, Jeera, Jute Sacking Bags, Masoor Grain Bold, Medium Staple Cotton, Mentha Oil, Mulberry Green Cocoons, Mulberry Raw Silk, Rapeseed - Mustard Seed, Pepper, Potato, Raw Jute, Rapeseed - Mustard Seed Oilcake, RBD Palmolein, Refined Soy Oil, Rubber, Sesame Seeds, Shankar Kapas, Soy Bean, Sugar, Tur, Turmeric, Urad Desi, V -797 Kapas, Wheat, Yellow Peas, Yellow Red Maize, Yellow Soybean Meal Precious Metals : Gold, Gold (100 gms), Silver, Silver (5kg) Base Metals : Electrolytic Copper Cathode, Aluminium Ingot, Nickel Cathode, Zinc Ingot Ferrous Metals : Mild Steel Ingots, Sponge Iron Energy Products : Brent Crude Oil, Furnace Oil, Light Sweet Crude Oil, Thermal Coal Polymers : Linear Low Density Polyethylene, Polypropylene, Polyvinyl Chloride Carbon Credits

MCX

Bullion : Gold, Gold Guinea, Gold HNI, Gold M, i-gold, Silver, Silver HNI, Silver M, Platinum

Oil & Oil Seeds : Castor Oil, Castor Seeds, Coconut Cake, Coconut Oil, Cotton Seed, Crude Palm Oil, Groundnut Oil, Kapasia Khalli, Mustard Oil, Mustard Seed (Jaipur), Mustard Seed (Sirsa), RBD Palmolein, Refined Soy Oil, Refined Sunflower Oil, Rice Bran DOC, Rice Bran Refined Oil, Sesame Seed, Soymeal, Soy Bean, Soy Seeds

Spices : Cardamom, Coriander, Jeera, Pepper, Red Chilli, Turmeric

Metal : Aluminium, Copper, Lead, Nickel, Sponge Iron, Steel Long (Bhavnagar), Steel Long (Govindgarh), Steel Flat, Tin, Zinc

Fiber : Cotton L Staple, Cotton M Staple, Cotton S Staple, Cotton Yarn, Kapas, Raw Jute

Pulses : Chana, Masur, Yellow Peas

Cereals : Maize

Energy : ATF, Brent Crude Oil, Crude Oil, Furnace Oil, Natural Gas, M. E. Sour Crude Oil

Plantations : Arecanut Jahaji, Cashew Kernel, Coffee (Robusta), Red Arecanut Raashi, Rubber

Petrochemicals : HDPE, Polypropylene(PP), PVC Weather : Carbon Credit, Carbon Credits CER

Others : Guargum, Guar Seed, Gurchaku, Mentha Oil, Potato (Agra), Potato (Tarkeshwar), Sugar M-30, Sugar S-30 Equity & derivatives ::

Ashlar is the member of NSE and BSE in Capital Market & Derivative Segment providing their clients first class service. Our success in this business is driven by our keen understanding of the business and ability to provide clients with solutions appropriate to fit their needs. We Ashlar are the most competitive company in the field of Stock Equities and Derivatives.

We are a full service brokers that are committed in providing outstanding service while offering, the investor an array of investment products to meet their needs. Our advisors team comprises of expert, skilful, determined, energetic and passionate people who have extensive experience in the field of Capital Market. Our stockbrokers provide the clients the advice and support they need to manage their investments.

Ashlar help the future investors to trade a broad market by making one trading decision rather than making many decisions involved with investing in numerous individual stocks . The overwhelming response of our clients has encouraged us to set new benchmarks in the industry by providing better quality services.

Ashlar have an on-going relationship with institutional and other clients which includes identifying clients investment requirements, identifying suitable relevant investment opportunities, keeping clients informed of company and market developments, maintaining a constant flow of information to our clients; and transacting buy and sell orders effectively and professionally.

Mutual Funds and IPO's Mutual Funds and IPOs can be an excellent option if youre looking for a

::

diversified investment portfolio which offers liquidity and transparency. Mutual Funds & IPOS are one of the most suitable investments for the common man as they offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. Recent trends in mutual fund flows suggest that the Indian investor is regaining his appetite for equities. Use Mutual Funds & IPOS to plan your financial future.

Currently the investor have been risk-averse and therefore park most of their saving in Fixed Deposits and other saving Accounts, though the yield from such investment avenues is very low. However, the recent trend has been such that more people have been attracted towards investment in the Mutual Funds & IPOs. Ashlar provides complete transaction support to our associates and their clients for investments in primary markets through Mutual funds & IPOs.

Ashlar offers personalized services for investments (including mutual funds of all types: Equity funds, Growth and Value Funds, Large- Cap and Small-Cap Funds, Bond Fund , Foreign Stocks Funds, Money Market Funds, Sector Funds,& Asset Allocation Funds) & IPOs.

Research

::

Mutual Fund DP Forms Research Intraday Research Weekly News Letter Equity Research
o o

Company Report Sector Report

Other

Research: News Letter

72 Title EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER Date 2011-07-25 2011-07-21 2011-07-20 2011-07-19 2011-07-18 2011-07-15 2011-07-14 2011-07-13 2011-07-12 2011-07-11 2011-07-08 2011-07-06 2011-06-30 2011-06-29 2011-06-28 2011-06-27 2011-06-24 2011-06-23 2011-06-22 2011-06-17 2011-06-16 2011-06-14 2011-06-13 2011-06-10 2011-06-08 2011-06-07 2011-06-06 2011-06-03 2011-06-02 2011-06-01 Download

EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER COMMODITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER COMMODITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER NEWS LETTER

2011-05-31 2011-05-30 2011-05-27 2011-05-26 2011-05-25 2011-05-24 2011-05-23 2011-05-20 2011-05-19 2011-05-18 2011-05-17 2011-05-16 2011-05-16 2011-05-13 2011-05-12 2011-05-11 2011-05-10 2011-05-09 2011-05-09 2011-05-06 2011-05-05 2011-05-04 2011-05-03 2011-05-02 2011-04-29 2011-04-28 2011-04-27 2011-04-26 2011-04-25 2011-04-21 2011-04-20 2011-04-19

NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER NEWS LETTER EQUITY NEWS LETTER EQUITY NEWS LETTER NEWS LETTER EQUITY NEWS LETTER

2011-04-18 2011-04-15 2011-04-13 2011-04-11 2011-04-08 2011-04-07 2011-04-06 2011-04-05 2011-04-04 2011-04-01

Internet Trading

::

Trade on BSE NSE, F&O Direct Execution of Orders Alerts on Mails Through SMS Regular Accounts Update Personalized Services through relationship manager. Regular Research Expert Advice Intraday Tick By Tick Chart Top Gainer & Losser List New High Low's Report Other Useful Information Regular News Flow Expert opinion & technique

INTRODUCTION

Paperless Working

Savings form an important part of the economy of any nation. With savings are invested in many forms of investment options available, the money acts as the driver for growth of the country. Indian financial scene too presents a plethora of avenues to the investors.

We, Indians work hard for our entire life to earn our living. Out of that we save some part in a hope that it will be used for our future to make it happy and reliable. These savings are generally invested with a hope to get good returns from it. So, this invested money earns us profit in a regular course. These profit margins depend upon the different investment options available in the market. Below are mentioned some of the basic and most opted for investment options to suit all financial situations. Investment options: We can divide investment options in two categories. They are mainly, real investments and financial investments. Real investments include investments made to buy house, car or machinery which are real assets. Financial investments include investing funds in buying some shares, mutual funds or bonds which are financial assets. In a more generalized form there are the below mentioned investment options available.

PERSONAL INVESTMENTS: These are a type of financial investments wherein we can save our money as savings in a bank and get interest on the invested amount. These are very general form of investments. STOCK profits MARKET or make INVESTMENTS: In losses depending these on the form of

investments we can invest our money in stocks and earn stock's

performance in the market. It is a complex form of investment wherein we are continuously required to keep an eye on the market performance.

REAL ESTATE INVESTMENTS: These are a type of property investments wherein we can invest our money in buying a house or a piece of land. We can use the real estate for personal residential or commercial use or can rent or lease it for commercial or residential purposes. Here we get a good profit margin and at the same time our assets are increased.

BUSINESS INVESTMENTS: We can invest our money in our own business instead of investing it with some other Core Values: Integrity: We must always conduct our business with fairness, honesty and transparency, so that we can at all times stand public scrutiny. We will never undermine the heritage of trust. Entrepreneurship: we would encourage innovative ideas for individual and organizational development. This thinking would be fostered, encouraged and recognized for enhancing business. We would take delight in stretching our goals and each of us would have a sense of ownership and responsibility for all our business dealings. Agility: We will encourage an organizational culture and structures that has capacity for change. Flexibility and

adaptability will be critical to our operations. We will aim for nimble, flexible and customized responses at all times to all our stakeholders. Excellence: All our activities must be driven by a passion for excellence. We must strive, uncompromisingly, to achieve the highest standards in our daily work and in the quality of the goods and services we offer. We would endeavor to achieve 'best in class' status in all our processes and results. Unity: We must work cohesively with our colleagues, customers and partners around the world, leveraging synergies and building strong networks based on collaboration and mutual cooperation.

Mission: To be a competitive value provider in international business for Group companies and all our partners. Vision: Become a globally networked enterprise seizing opportunities worldwide to generate USD 25 million annual profits by.

Vivid Description of Vision:

Achieved aggressive and profitable growth of our 5 core businesses and initiated new businesses

Become a cohesive, integrated and synergized global entity providing horizontal and vertical reach and infrastructure to all our partners worldwide

SWOT analysis of insurance industry:

STREN GTHS Premium rates are increasing and so are commissions The variety of products are

WEAKN ESS Companies are slow respond to changing needs Increasing trend of financial weakness among

increasing Customers expects more services from their brokers

the companies More competitors for agencies to compete with banks & internet players

OPPORTUN ITIES Ability to cross sell financial services barely being tapped Technology is improving to that point that paperless transactions are available Clients increasing need for insurance consultant can open new ways to service the client and generate income

THREA TS Increasing cost and need for insurance might hit a point where a backlash will occur Increasing expenses and lower profit margins can hit smaller agencies and insurance companies

INVESTMENT OPTIONS

There are many investment options available for the people in the market, but there are mainly five investment options, which are

considered to be as most popular and most effective investment options available in the current market scenario. In general, almost 95-98% people do invest in these, since the Expected Rate of Return is much higher than any other investment options,

FIXED DEPOSITS:

irrespective of the amount of risk is very high in some of the cases. These investment options are: This investment option is most popular and safest option available in the market. With almost every working people invest in fixed deposits; this investment option leads the chart of four investment options because of its safety and popularity. Though the amount of return is much lesser than the other three options, this option heads the table as it has almost no risk of losing the invested amount. Also, it is the oldest among the other three, so the trust factor of people is very high. There are mainly three types of fixed deposits available in the market, namely, viz. 1. Fixed deposits offered by Banks 2. Fixed deposits offered by Post Offices 3. Company fixed deposits Now, well see these three fixed deposit schemes in details. 1. Fixed deposits offered by Company: Considered as the safest of all options, banks have been the roots of the financial systems in India. Promoted as the means of social development, banks in India have indeed played an important role in not only urban areas, but also in rural upliftment. For an ordinary person though, banks have acted as the safest avenue wherein a person deposits money and

earns interest on it. The two main modes of investment in banks, savings accounts and fixed deposits have been effectively used by one and all. However, today the interest rate structure in the country is headed southwards, keeping in line with global trends. With the banks offering just above in their fixed deposits for one year, the yields have come down substantially in recent times. Add to this, inflammatory pressure in the economy and we have a position where the savings are not earning. The inflation is creeping up almost 8% at times, this means the value of money saved goes down instead of going up. This effectively mars any chance of gaining investments from the banks. Company fixed deposits: Another oft-used route to invest has been the fixed deposit schemes floated by companies. Companies have used fixed deposit schemes as a means of mobilizing funds for their options and have paid interest on them. The safer a company is rated, the lesser the return offered has been the thumb rule. However, there are several potential roadblocks are there. Firstly, of all the danger of financial positions of the company not being understood by the investor lurks. The investors rely on

STOCK MARKET:

intermediaries who more often than not, dont reveal the entire truth. Secondly, liquidity is a major problem with the amount being received months after the due dates. Premature redemption is generally not entertained without cuts in the returns offered and though they present a reasonable option to counter interest rate risk (especially when the economy is headed for a low interest regime), the safety of amount has been found lacking. Many cases like the Ashlar Group and DCM Group fiascoes have resulted in low confidence in this option. Now let us look at the Indian Stock Market in details. The Indian Stock Market is also the other name for Indian Equity Market or Indian Share Market. The forces of the market depend on the monsoons, global funding flowing into equities in the market and the performance of various companies. The market of equities is transacted on the basis of two major stock indices, National Stock Exchange of India Ltd. (NSE) and The Bombay Stock Exchange (BSE), the trading being carried on in a dematerialized form. The physical stocks are in liquid form and cannot be sold by the investors in any market.

The equity indexes are correlated beyond the boundaries of different countries with their exposure to common calamities like monsoon which would affect both India and Bangladesh or trade integration policies and close connection with the foreign investors. From 1995 onwards, both in terms of trade integration and FIIs India has made an advance. Indian Equity Market at present is a lucrative field for the investors and investing in Indian stocks are profitable for not only the long and medium-term investors, but also the position traders, short-term swing traders and also very short term intraday traders. In terms of market capitalization, there are over 2500 companies in the BSE chart list with the Reliance Industries Limited at the top. The SENSEX today has rose from 1000 levels to 8000 levels providing a profitable business to all those who had been investing in the Indian Equity Market. There are about 22 stock exchanges in India which regulates the market trends of different stocks. Generally the bigger companies are listed with the NSE and the BSE, but there is the OTCEI or the Over the Counter Exchange of India, which lists the medium and small sized companies.

In the Indian market scenario, the large FMCG companies reached the top line with a double-digit growth, with their shares being attractive for investing in the Indian stock market. Such companies like the Tata Tea, Britannia, to name a few, have been providing a bustling business for the Indian share market. Other

leading houses offering equally beneficial stocks for investing in Indian Equity Market, of the SENSEX chart are the two-wheeler and three-wheeler maker Bajaj Auto and second largest software exporter Infosys Technologies. Thus, the growing financial capital markets of India being encouraged by domestic and foreign investments is becoming a profitable business more with each day. If all the economic parameters are unchanged Indian Equity Market will be conducive for the growth of private equities and this will lead to an overall improvement in the Indian economy. Now apart from all these, the first question that comes in our mind is, Why do so many people invest in shares? Simply put, you want to invest in order to create wealth. While investing is relatively painless, its rewards are plentiful. To understand why you need to invest, you need to realize that you lose when you just save and do not invest. That is because the value of the rupee decreases every year due to inflation. Historically shares have outperformed all the other investment instruments and given the maximum returns in the long run. In the twenty-five year period of 1980-2005 while the other instruments have barely managed to generate returns at a rate higher than the inflation rate (7.10%), on an average shares have given returns of about 17% in a year and that does not even take into account the dividend income from them. Were we

to factor in the dividend income as well, the shares would have given even higher returns during the same period. Inflation: general rise in prices and wages caused by an increase in the money supply and demand for goods, and resulting in a fall in the value of money. Inflation occurs when most prices rise by some degree across the economy.

Investment options Stock market Bank fixed deposits Gold

Returns per annum 17% 9% 5.7%

17% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Stock Market

9% 5.70%

Bank Fixed Deposits Returns per annum

Gold

Advantages of investing in shares: There are lots of advantages of investment in share market. Some of these are: Dividend income: investments in shares are attractive as much for the appreciation in the share prices as for the dividends their companies pay out. Tax advantages: shares appear as the best investment option if you also consider the unbeatable tax benefits that they offer. First, the dividend income is tax-free in the hands of investors. Second, you are required to pay only a 10% short term capital gains tax on the profits made from investments in shares, if you book your profits within a year of making the purchase. Third, you don't need to pay any long-term capital gains tax on the profits if you sell the shares after holding them for a period of one year. The capital gains tax rate is much higher for other investment instruments: a 30% short-term capital gains tax (assuming that you fall in the 30% tax bracket) and a 10% longterm capital gains tax. Easy liquidity: shares can also be made liquid anytime from anywhere (on sharekhan.com you can sell a share at the click of a mouse from anywhere in the world) and the gains can be

realized in just two working days. Considering the high returns, the tax advantages and the highly liquid nature, shares are the best investment option to create wealth.

How people earn from the investment in shares? Shares can give us returns in two forms. A. Appreciation in share prices: You buy shares with the belief that their price will increase and that when this happens you will be able to sell off your shares and earn profit. For example, if you bought a share for Rs100 three years ago and it is Rs500 today, then you have earned Rs400 in three years. B. Dividend: when a company makes profits, it can choose to share part of its profits with its shareholders by paying out dividend. This dividend is paid as a percentage of the face value of the share. For example, a company may declare a dividend of 25%. Then if the face value of its share is Rs10 you will get Rs2.50 for every share you own of that company, irrespective of the market price. In itself this might not be much, but over a longer period of time or if you have a lot of shares, you could earn quite a bit from the dividend itself. The best thing about dividends is that they are tax-free in the hands of investors. Dividend yield stocks are known to give returns higher than fixed deposits [dividend yield = (dividend per share / market price of the share) x 100].

What are the expenses during transaction? Every share transaction attracts some tax or the other. Some of the main expenses are as follows. A. Capital gains tax: If you purchase a share and sell it at a price higher than the purchase price and if this sale is within a year of the purchase, then a 10% capital gains tax is levied on the profit that you make. For example, if you bought a share for Rs100 on January 1, 2005 and sold it for Rs150 on July 1, 2005, then you have to pay a tax of 10% on the Rs50 profit that you make. If you sell after a year of purchase, there is no tax on the long-term gains. B. Securities transaction tax: Securities transaction tax (STT) is levied by the government on every transaction you do on a stock exchange. You dont have to pay this separately; its collected by your broker. As per the Union Budget 2005 the STT will be 0.10% on delivery-based transactions and 0.02% on intraday transactions. C. Brokerage: Brokers get a commission on every trade that they do for you. This commission varies from broker to broker; at sharekhan.com the brokerage is 0.5% for delivery-based

transactions and

0.10% for intraday

transactions.

On the

brokerage amount you are required to pay a service tax to the government (to be collected by the broker). The brokerage varies depending on the service that the broker provides you. Some brokers, such as Sharekhan, offer its clients regular updates on companies, multiple means to transact and customer service support. D. Depository fees: Since most of the shares exist in a dematerialized form, every time you buy or sell shares the transactions are being noted by your DP. The DPs normally levy a charge which is an annual charge or a charge on each transaction. Risks ---the only disadvantage in investing in shares: There are two types of risk associated with this kind of investment: company specific risk and market risk. Set of risks that deals with a company and its sector are referred to as company specific risk. Examples of company specific risk: bad management, bad marketing strategies, sector disturbances that have an impact on industry etc. External factors (economic, global factors) that affect the market as a whole are referred to as market risk.

Examples of market risk: political instability, high inflation, rupee depreciation, rising interest rates, global incidents like wars and disasters that throttle the nation's economy etc.

How company specific risk can be identified? With careful scrutiny and proper homework, it might be easy to identify and be forewarned of the risks a company may be carrying. Specifically check out for the mergers and acquisitions that do not have a real synergy or are a nightmare after reconciliation (A O L - Time Warner, Hewlett Packard-Compaq). Also is suspicious of diversifications that do not really add value to a company's core offering. A third kind of risk would be with the companies that have bet their stakes on a single product offering and are high on debt. Likewise companies that depend on research could be prone to higher risk, if the research doesn't come to fruition. How to identify sector driven risk? If steel prices rise, auto companies get affected. If low cost Chinese products invade the country's market, then local fast moving consumer goods companies might find no takers for their products. The changing nature of the industry itself may lead to dipping stock prices; a print publication may see revenue loss if everyone moves to reading on the Internet.

How to predict market risk? It is difficult to predict market risks. The only thing we can say here is that start noticing all the small signs early. If the election results are feared to lead to a fall in the stock market, notice the signals beforehand. Read Sebi's bulletins and track companies whose shares prices are very volatile. How people can minimize their risk and maximize their return? Buy when stocks are falling, sell when these are rising. This works well when you are a long-term investor and there is an extended bear or Bull Run. Don't try to second guess or predict that the market will fall today and rise tomorrow. Even seasoned investors cannot do that! 2. Don't try to guess the market's favorites Your instincts might tell you that pharma or technology stocks are hot due to certain policies or events, but remember millions of investors have already guessed that and bought these stocks. The prices of these stocks would therefore be at a higher level when you buy them. Instead focus on the long term and don't get swayed by short-term events.

3. Aim for the long haul

Short-term investing is prone to higher risks. When investing in stocks, aim to get good returns after a period of three to five years at the minimum. Also churn your portfolio periodically and based on the progress that a company makes in a quarter or in six months, decide whether to hold the stock or get out of it.

4. Avoid hot tips You may have overheard some news about a stock or your friend may advise that a particular stock is all geared to move up. Avoid such tips like the plague and your investments will remain safe. 5. Blue-chips are safe bets Blue-chip companies are there because they have done well in the past and have a high market capitalization. It is a likely guess that they will maintain their track record and give you higher returns even in future. Therefore invest in companies that have a good track record. 6. Slow and steady stream of investments Set aside a certain portion of your earnings every month and invest that sum in shares irrespective of the market conditions. This way, over a period of time you can amass a substantial number of shares of the stocks in your portfolio.

Mutual funds:
7. Think portfolio Don't put all your earnings in a single stock. Try to have a diverse portfolio of stocks. This way even if one stock doesn't do well, you are still well protected. Also invest across sectors, since any problem in one sector would affect all stocks in the sector. As a thumb rule, if you have investments of up to Rs50, 000 invest in two to three stocks. For about Rs150, 000 invest in three to five stocks, for around Rs500, 000 have five to seven stocks and around ten stocks for higher amounts. 8. Dont invest all your savings Always maintain a core set of reserves. You should never touch these reserves for investing, so that even in the worst case you still have some money. Typically these reserves should be your salary of about six months. 9. Be level-headed Invest wisely, don't get swayed by rumors and allow Sharekhan to be your guide at all times. Investment success won't happen overnight, so avoid overreacting to short term market swings.

Mutual Funds are essentially investment vehicles where people with similar investment objective come together to pool their

money and then invest accordingly. Each unit of any scheme represents the proportion of pool owned by the unit holder (investor). Mutual Funds in India are financial instruments. These funds are collective investments which gather money from different investors to invest in stocks, short-term money market financial instruments, bonds and other securities and distribute the proceeds as dividends. The Mutual Funds in India are handled by Fund Managers, also referred as the portfolio managers. The Securities Exchange Board of India regulates the Mutual Funds In India. The share value of the Mutual Funds in India is known as net asset value per share (NAV). The NAV is calculated on the total amount of the Mutual Funds in India, by dividing it with the number of shares issued and outstanding shares on daily basis. MUTUAL FUNDS IN INDIA ADVANTAGES:

The Mutual Funds in India offer flexibility by means of dividend reinvestment, systematic investment plans and systematic withdrawal plans. These funds are available in small units, so they are affordable to the small investors. The fees charged for to the custodial, brokerage and others services are very low in case of Mutual Funds in India. These funds have the option of redeeming or withdrawing money at any point of time.

The Mutual Funds in India have low risk as it is managed professionally.

Like most developed and developing countries the mutual fund cult has been catching on in India. The important reasons for this interesting occurrence are:

Mutual funds make it easy and less costly for investors to satisfy their need for capital growth, income and/or income preservation. Mutual fund brings the benefits of diversification and money management to a select few. to the individual investor, providing an opportunity for financial success that was once available only

Understanding Mutual funds is easy as it's such a straightforward concept. A mutual fund is a company that pools the money of many investors, its shareholders to invest in a variety of different securities. Investments may be in stocks, bonds, money market securities or some combination of these. For the individual investor, mutual funds propose the benefit of having someone else manage your investments and diversify your money over many different securities that may not be available or affordable to you otherwise. A mutual fund, by its very nature, is diversified -- its assets are invested in many different securities. Beyond that, there are many different types

of mutual funds with different objectives and levels of growth potential, furthering your odds to diversify. Benefits of mutual funds: Investing in mutual has various benefits, which makes it an ideal investment avenue. Professional investment management : One of the primary benefits of mutual funds is that an investor has access to professional management. A good investment manager is certainly worth the fees you will pay. Good mutual fund managers with an excellent research team can do a better job of monitoring the companies they have chosen to invest in than you can, unless you have time to spend on researching the companies you select for your portfolio. That is because Mutual funds hire full-time, high-level investment professionals. Funds can afford to do so as they manage large pools of money. The managers have real-time access to crucial market information and are able to execute trades on the largest and most costeffective scale. When you buy a mutual fund, the primary asset you are buying is the manager, who will be controlling which assets are chosen to meet the funds' stated investment objectives. Diversification : A crucial element in investing is asset allocation. It plays a very

big part in the success of any portfolio. However, small investors do not have enough money to properly allocate their assets. By pooling your funds with others, you can quickly benefit from greater diversification. Mutual funds invest in a broad range of securities. This limits investment risk by reducing the effect of a possible decline in the value of any one security. Mutual fund unit-holders can benefit from diversification techniques usually available only to investors wealthy enough to buy significant positions in a wide variety of securities. Low Cost : A mutual fund let's you participate in a diversified portfolio for as little as Rs.5, 000, and sometimes less. Convenience and Flexibility : Investing in mutual funds has its own convenience. While you own just one security rather than many, you still enjoy the benefits of a diversified portfolio and a wide range of services. Fund managers decide what securities to trade collect the interest payments and see that your dividends on portfolio securities are received and your rights exercised. It also uses the services of a high quality custodian and registrar. Another big advantage is that you can move your funds easily from one fund to another within a mutual fund family. Liquidity : In open-ended schemes, you can get your money back promptly

at net asset value related prices. Transparency : Regulations for mutual funds have made the industry very transparent. You can track the investments that have been made on your behalf and the specific investments made by the mutual fund scheme to see where your money is going. In addition to this, you get regular information on the value of your investment. Variety : There is no shortage of variety when investing in mutual funds. You can find a mutual fund that matches just about any investing strategy you select. There are funds that focus on blue-chip stocks, technology stocks, bonds or a mix of stocks and bonds. The greatest challenge can be sorting through the variety and picking the best for you.

Mutual fund risks: Having understood the basics of mutual funds the next step is to build a successful investment portfolio. Before you can begin to build a portfolio, one should understand some other elements of mutual fund investing and how they can affect the potential value

of your investments over the years. The first thing that has to be kept in mind is that when you invest in mutual funds, there is no guarantee that you will end up with more money when you withdraw your investment than what you started out with. That is the potential of loss is always there. Even so, the opportunity for investment growth that is possible through investments in mutual funds far exceeds that concern for most investors. Here's why. At the cornerstone of investing is the basic principal that the greater the risk you take, the greater the potential reward. Risk then, refers to the volatility -- the up and down activity in the markets and individual issues that occurs constantly over time. This volatility can be caused by a number of factors -- interest rate changes, inflation or general economic conditions. It is this variability, uncertainty and potential for loss, that causes investors to worry. We all fear the possibility that a stock we invest in will fall substantially. Different types of mutual funds have different levels of volatility or potential price change, and those with the greater chance of losing value are also the funds that can produce the greater returns for you over time. You might find it helpful to remember that all financial investments will fluctuate. There are very few perfectly safe havens and those simply don't pay enough to beat inflation over the long run. Number of available options: Diversification Professional Management

 Potential of returns Liquidity

Besides these important features, mutual funds also offer several other key traits. Important among them are: Well Regulated Transparency Flexible, Affordable and a Low Cost affair Structure of the Indian mutual fund industry: The Indian mutual fund industry is dominated by the Unit Trust of India, which has a total corpus of Rs. 700bn collected from more than 20 million investors. The UTI has many schemes in all categories i.e. equity, balanced, income etc with something open ended and some being closed ended. The unit scheme 1964 commonly referred to as US 64, which is a balanced fund, is the biggest scheme with a corpus of about Rs. 200bn. UTI was floated by financial institution and is govern by a special act of parliament. Most of its investors believe that the UTI is government owned and controlled, which, while legally uncorrected, is true for all practical purposes. Recent trends in mutual fund industry: The most important trend in the mutual fund industry is the

aggressive companies

expansion and the

of

the

foreign of the

owned

mutual floated

fund by

decline

companies

nationalized banks and smaller private sector players. Many nationalized banks got into the mutual fund business in the early nineties and got off to a good start due to the stock market boom prevailing them. These banks did not really understand the mutual fund business and they just viewed it as another kind of banking activity. Few hired specialized staff and generally chose to transfer staff from the parent organizations. The performance of most of the schemes floated by these funds was not good. Some schemes had offered guaranteed returns and their parent organizations had to bail out these AMCs by paying large amounts of money as the difference between the guaranteed and actual returns. The service levels were also very bad. Most of these AMCs have not been to retain staff, float new schemes etc, and it is doubtful whether, barring a few exceptions, they have serious plans of continuing the activity in a major way. The foreign owned companies have deep pockets and have come in here with the expectation of a long haul. They can be credited with introducing many new practices such as new product innovation, sharp Improvement in service standards and disclosure, usage of technology, broker education and support etc. In fact, they have forced the industry to upgrade itself and service levels of organizations like UTI have improved dramatically in the last few years in response to the competition provided by these.

Schemes of a Mutual Fund: The asset management company shall launch no scheme unless the trustees approve such scheme and a copy of the offer document has been filed with the Board. Every mutual fund shall along with the offer document of each scheme pay filing fees. The offer document shall contain disclosures which are adequate in order to enable the investors to make informed investment decision including the disclosure on maximum investments proposed to be made by the scheme in the listed securities of the group companies of the sponsor A close-ended scheme shall be fully redeemed at the end of the maturity period. Unless a majority of the unit holders otherwise decide for its rollover by passing a resolution. Rules Regarding Advertisements: The offer document and advertisement materials shall not be misleading or contain any statement or opinion, which are incorrect or false. Investment Objectives and Valuation Policies: The price at which the units may be subscribed or sold and the price at which such units may at any time be repurchased by the mutual fund shall be made an available to the investors.

Analysis
Restrictions on Investments: A mutual fund scheme shall not invest more than 15% of its NAV in debt instrument issued by a single issuer, which are rated not below investment grade by a credit rating agency authorized to carry out such activity under the Act. Such investment limit may be extended to 20% of the NAV of the scheme with the prior approval of the Board of Trustees and the Board of Asset Management Company. A mutual fund scheme shall not invest more than 10% of its NAV in unrated debt instruments issued by a single issuer and the total investment in such instruments shall not exceed 25% of the NAV of the scheme. All such investments shall be made with the prior approval of the Board of Trustees and the Board of Asset Management Company. No mutual fund under all its schemes should own more than ten percent of any companys paid up capital carrying voting rights. Such transfers are done at the prevailing market price for quoted instruments on spot basis. The securities so transferred shall be in conformity with the investment objective of the scheme to which such transfer has been made.

So, if we draw a graph of table-2, then we get,

most prefered investment option

40 35 30 number of people 25 20 15 10 5 0 fixed deposit stock market mutual funds insurance investment options

Therefore, we can easily see from the chart that majority of people like to invest in the stock market, even though market situation is not so good and there is so much risk available.

Now, if we see what % of people like to invest in which investment option in the following pie chat, then,

% of people's preference

insurance 18% mutual funds 21%

fixed deposit 25%

stock market 36%

So, we can see from the above pie chart that 36% people like to invest in the stock market, irrespective of the volatility of the market. Then comes fixed deposit with 25% people likes to play safe, as it is the safest option available in the market. Now, let us see which age group is more prone to play safe, which is, like to invest in fixed deposits.

investment in fixed deposit

7 6 number of people 5 4 3 2 1 0 18-24 24-30 30-40 40 above

age group

Therefore, we can see from the above chart that people of age group 24-30 and above 40 years dont like to take much risk may be because these are the settlement periods of their life. Now, let us see which age group likes to take the highest possible risk in the following chart.

investment in stock mrket

6 number of people 5 4 3 2 1

0
18-24 24-30 age group 30-40 40 above

So, we can see from the above chart that people of age group 30-40 likes to take more risk, as they became more financially stable by that age and have fewer responsibilities. Now, we will see that which age group likes to take moderate risk in the following chart.

investment in mutual funds

40 above age group 30-40 24-30 18-24 0 1 2 3 number of people 4 5 6

So, we can see that people of age group 18-24 like to invest in mutual fund, as it has moderate risk. Lastly, in the following chart, we will see that which age group likes to take very less risk and wants higher return in the long term.

investment in insurance

7 6 number of people 5 4 3 2 1

0
18-24 24-30 age group 30-40 40 above

So, we can see from the above chart that people of age group 30-40 more likely to invest in insurance, as by that time they think about the future and long term return.

Conclusions & Recommendations:

Therefore from the survey, whatever I got, here is the gist of all of them: People are more inclined to invest in the stock market, irrespective of the market scenario and the level of risk. Majority of the people wants higher return in short period of time that is why they prefer to invest in stock markets and mutual funds rather than any other form of investments. People between ages 30-40 think about long term returns as well as higher return in short period of time that is why they invest in stock market for short period of time and in insurance for long term return. People between ages 18-24 dont have much money to invest and they cant take higher risk, so they invest in mutual funds which are of moderate risk. People between ages 24-30 wants to be financially stable that is why they dont like to take risk at all. So, they invest in the banks fixed deposit scheme which has almost no risk and lower return.

Bibliography
www.ashlarindia.com www.moneycontrol.com www.investsmartindia.com www.insurancejournal.com www.irdaindia.org IRDA book Various banks websites