PROJECT REPORT ON
TO STUDY REGARDING THE IIFL GOLD LOAN
IN LUDHIANA CITY (GILL ROAD)
(Session 2011-2013)
Submitted To: -
School of Business Management Submitted By: - Jai Prakash
(Shoolini University, Solan, H.P) M.B.A 3th year
I am grateful to India info line finance lit who has given me this
opportunity to carry out the project "to study regarding the IIFL gold
loan in Ludhiana city" (Gill road)
Last but not least my sincere thanks to my parents and friends who
directly or indirectly helped me to bring this project into the final
shape
Table of content
16- Acknowledgement
1 Introduction 1-15
7 Bibliography 53-55
8 APPENDIX 56-58
CHAPTER 1
INTRODUCTION
The financial markets have two major components; they are money
market and capital market.
Money market
Capital market
Securities market
It refers to the markets for those financial instruments claims
obligations that are commonly and readily transferable by sale. It has
two inter dependent and inseparable segments the new issues
(primary) market and the stock (secondary) market. the secondary
market enables those who hold securities to adjust their holdings in
response to changes on their assessment of risk and return. The
primary markets provide the channel of sale of new securities.
Stock market
FOREX MARKET
INDIA INFOLINE
India info line is one stop financial services shop, most respected for
quality if its advice, personalized service and cutting edge
technology. Listed in Bombay and national stock exchange with a net
worth of INR 200 corer and a market cap of over INR 1970 corer. The
company has a network of 976 business locations (branches and sub
brokers) spread across 365 cities and towns. It has more than
8000000 customers .it is registered with NSDL as well as CDSL as a
depository participant, providing a one stop solution for clients
trading in the equities market first company in India to foray into the
online distribution of mutual funds.
About IIFL
Company profile
Date of 1995
Establishment
Revenue 156.75 ( USD in Millions )
Corporate 75 Nirlon Complex, Off
Address Western Express
Highway,Goregaon (E)
Mumbai-400063, Maharashtra
www.indiainfoline.com
Equities our core offering, gives us a leading market share in both retail
and institutional segments. Over a million retail customers rely on our
research, as do leading FIIs and MFs that invest billions.
Our research is available not just over the Internet but also on
international wire services like Bloomberg, Thomson First Call and
Internet Securities besides others where it is amongst one of the most read
Indian brokers.
The Group has a consistent and uninterrupted track record of profits and
dividends since its listing in 2005. The company is listed on both
Exchanges and also trades in the derivatives segment.
IIFL’s Crisil and ICRA Rating for short term is top rated as CRISIL A1+
and ICRA (A1+) respectively. For long term, IIFL has been rated ICRA
(AA-) by ICRA and CRISIL AA-/Stable by CRISIL indicating high
degree of safety for timely servicing of financial obligations.
IIFL is near you physically: we are present in every nook and cranny of
the country, with over 3,000 business locations across 500 cities in India.
You can reach us in a variety of ways, online, over the phone and through
our branches. All our offices are connected with the corporate office in
Mumbai with cutting edge networking technology. The group caters to a
customer base of about a million customers.
Oct, 1956
With Registration No. 11 93797. We commenced our operations as an
Independent provider of information, analysis and research covering
Indian businesses, financial markets and economy, to institutional
Customers. We became a public limited company on April 28, 2000
and the name of the Company was changed to Probity Research and
Services Limited. The name of the Company was changed to India
Infoline.com
1999
-Restructured the business model to embrace the internet; launched
Archives.indiainfoline.com mobilised capital from reputed private
Equity investors.
2000
-Commenced the distribution of personal financial products; launched
Online equity trading; entered life insurance distribution as a
Corporate agent. Acknowledged by Forbes as ‘Best of the Web’ and
‘...must read for investors’.
2004
-Acquired commodities broking license; launched Portfolio
Management Service.
2005
- Listed on the Indian stock markets
- India Info line fixes a price band between Rs 70 and Rs 80 for its
Forthcoming public issue. The company is coming out with public
issue Of 1.18 corer shares with a face value of Rs 10 through the book
Building route. The issue is slated to open on April 21 and close on
April 27. Enam Financial Consultants Private Ltd would be the sole
Book running lead manager to the issue while In time Spectrum
Registry Ltd is the registrar to the issue.
-India Info line public issue gets 6.6 times oversubscription
-IIFL appoints R Mohan as VP
-India Info line Ltd has informed that the Company has entered into a
Advertising agreement with Times Group where in the Company and
other Group companies would spend about Rupees Thirty Corers over
the next 5 years in print as well as non print media of The Times
Group.
-India Info line to buy 75-pc stake in Money tree
2006
-India Info line launches exclusive SMS Value Added Service
-India Info line enters into strategic agreement with Saraswat Bank
-India Info line to launch stock trading on cell phones
-Indiainfoline to roll out MCX, NCDEX, DGCX software
-Acquired membership of DGCX; launched investment banking
services
2007
-Launched a proprietary trading platform; inducted an institutional
Equities team; formed a Singapore subsidiary; raised over USD
300mn In the group; launched consumer finance business under the
‘Money line’ brand.
2008
-Launched wealth management services under the ‘IIFL Wealth’
brand; set up India Info line Private Equity fund; received the
Insurance Broking license from IRDA; received the venture capital
license; Received in principle approval to sponsor a mutual fund;
received Best broker- India’ award from Finance Asia; ‘Most
Improved
Brokerage- India’ award from Asia money.
- India Info line Ltd has informed that the Board of Directors of the
Company have vide circular resolution passed on March 10, 2008
Approved the appointment of Mr. A K Purwar, ex-Chairman of the
State
Bank of India, as an independent director on the Board of the
Company.
- India Info line Ltd has informed that pursuant to the resignation
Of Mr. Nimish Mehta, Company Secretary and Compliance Officer of
the
Company. Ms. Falguni Sanghvi has been appointed as the Company
Secretary with effect from October 07, 2008.
- The Company has splits its face value from Rs10/- to Rs2/-.
2009
-Received registration for a housing finance company from the
National Housing Bank; received ‘Fastest growing Equity Broking
House
- Large firms’ in India by Dun & Bradstreet
2010
2011
Mr. R. Venkataraman
Executive director
India Infoline Ltd. Mr. R Venkataraman, Co-Promoter
and Managing Director of India Info line Ltd, is a B.Tech (electronics
and electrical communications engineering, IIT Kharagpur) and an
MBA (IIM Bangalore). He joined the India Info line Board in July 1999.
He previously held senior managerial positions in ICICI Limited,
including ICICI Securities Limited, their investment banking joint
venture with J P Morgan of US, BZW and Taib Capital Corporation
Limited. He was also the Assistant Vice President with G E Capital
Services India Limited in their private equity division, possessing a
varied experience of more than 19 years in the financial services
sector
Independent Director,
Independent Director,
Independent Director,
Sunil Kaul
Independent Director,
The eligibility criteria required to apply for gold lone in India includes
three factors. Firs-tly, the person has to be above 18 years of age.
Secondly, the person applying or a gold loan in india should have a ID
& address proof and last but not the least the applicant should be
working on a regular salary basis , means there should be a constant
flow of income.
Gold has traditionally been among the most liquid asset and is an
accepted universal currency. it has traditionally been consumed by
individuals in the form of jewellery, especially in India were it is
considered auspicious. Gold is presumed to be a safe haven in times
of economic uncertainty, a fact exemplified by a 30% increases the
value of gold over the past year India is one of the largest market of
gold accounting for approximately 10% of the total world gold stock
as of 2010. Rural India accounts for 65% of this gold stock. Though
gold price have increased 19% CAGR from 2002 to 2010, gold stock in
India has grown at 22% CAGR During the same period to 18000 tons
(Rs.32000 billion). The demand for gold has followed a regional trend
with southern India accounting for 40% of annual demand, followed
by the west (25%), north (20-25%) and east (10-15%).
The Key Players in the Indian gold loan market include the
unorganized sector, banks _ public/private/cooperatives and NBFCs.
While the unorganised sector, comprising local pawnbroker and
money leader has traditionally dominated the gold loan market for
money decades and still commands nearly 75% of the market the
organized sector led by NBFCs is catching up fast. The organized
sector has grown at a rapid paces of 40% CAGR form the 2002 to
2010 and is expected to grow by 33% to41% CAGR in 2011
Muthoot finance
Manappuram
MUTHOT FINCORP
KARVY FINANCE
INDIA INFOLINE
The IIFL (India Info line) group, comprising the holding company,
India Infoline Ltd (NSE: INDIAINFO, BSE: 532636) and its subsidiaries,
is one of India’s premier providers of financial services.
IIFL offers advice and execution platform for the entire range of
financial services covering products ranging from Equities and
derivatives, Commodities, Wealth management, Asset management,
Insurance, Fixed deposits, Loans, Investment Banking, Gold bonds
and other small savings instruments.
Our research is available not just over the Internet but also on
international wire services like Bloomberg, Thomson First Call and
Internet Securities besides others where it is amongst one of the
most read Indian brokers.
IIFL’s Crisil and ICRA Rating for short term is top rated as CRISIL A1+
and ICRA (A1+) respectively. For long term, IIFL has been rated ICRA
(AA-) by ICRA and CRISIL AA-/Stable by CRISIL indicating high degree
of safety for timely servicing of financial obligations.
IIFL network over 3,000 business locations spread more than 500
cities in India. You can reach us in a variety of ways, online, over the
phone and through our branches. All our offices are connected with
the corporate office in Mumbai with cutting edge networking
technology. The group caters to a customer base of about a million
customers.
Our physical presence in key global markets includes subsidiaries in
Colombo, Dubai, New York, Mauritius, London, Singapore and Hong
Kong.
When the gold loan number will generated please ensure before doing further
process deduces must be done
If there is any deviation (in terms of ROI, per gram rate and valuation
%age)so, it should enter in to the client details as the first stage
Now again we have to fill the details a
s under
Appraisal form
Cash disbursal
Bank details
(Appraisal form : valuer I Before start anything we have to press on ‘+’ then
enter all the information like item, Gross weight , Net weight, per gram weight
after filling these information press ‘save’ this process should be repeated for
each and every item by valuer I
Valuer II: now the above noted process should be repeated by valuer II also
when we enter the all information on appraisal form finally press the ‘Edit’ and
then ‘Save’.
Cash disbursal: first press ‘+’ then enter the denomination of cash to be
disbursed to the customer then press disburse cash finally we press ‘Edit ‘and
‘Save’.
Bank details: there is no need to fill bank details in the case loan is less than 10
laces, on the other hand if loan above 10 laces then press add new then enter
the details then press ‘Edit’ and ‘save’.
Now we should give the print command and get the hard copy for
customers signature the print will generated the following document on
six pages.
Application form (page 1)
DPN(page 1)
Appraisal form (page 2)
Declaration form (page 3)
Borrower copy (page 4)-given to the customer
Token card (page 5) – original should given to the customer and
take Xerox for office record.
Cash disbursal receipt(page 6)
Total 11 signature are obtaining form the customer on the above
documents we should give three documents to the customer.
Borrower copy
Token card
Cash receipt
Now we should generate/ complete the following document and upload
the same along with the five documents for sanctioning of the loan.
I.D proof
Address proof
Pan card (in the case of above loan is 50000)
TVR from
CPV report
These are the various type of gold testing in India info line
Acid test
Acids have +ve charge particle gold rubbing with stone
and throw them acids if gold colour change them the gold
is not original if colour is not change gold is original
Flexibility test
Gold move in all direction gold is very flexible to move
other element can break when move but gold can’t be
break
Sound test
We check the sound of gold if gold bangle and other
element bangle both are hit any particle we hear the
sound if gold is original it give specific sound if gold is not
original it give same sound as they other bangle.
Colour test
Gold have yellow colour but if gold is duplicate its colour
is different from yellow
Smell test
Gold have specific smell as compared to other element if
we have test the gold smell there are the specific machine
and cheek the gold smell
Salt test
When gold mixed in salt if colour change gold is not
original if colour not change gold is original
Use ability test
Branded new gold are very difficult to check the
originality of gold but already used gold are easily to
check the gold originality
Weight test
If we see the 50 gram of gold and 50 gram of sugar then
size of gold is small as compare to sugar.
Rubbing test
When gold rubbing with stone if gold is original it appears
yellow colour if gold is not original it having different
colour.
GLOBAL SCENARIO
Gold loan market this perception towards gold loan has gradually
undergone a change and individuals have started seeing the value of
loan against gold as against availing a personal loan the gold loan
market that was highly fragmented and dominated by local jewellers,
has gradually seen the entry and growth of NBFCs and banks a clear
indication of the viability of gold loans as an important loan product.
The gold loans market has recently seen a lot of action firm both the
consumers and the industry. With gold spiralling upwards borrowers
are able to get decent valuation for their gold and the process of
getting such a secured loan is also largely hassle free the southern
Indian markets have been particularly lucrative for the gold loan
business -85%-90% of the gold loan market is in the states of Andhra
Pradesh, Tamil nadu and Kerala.
By virtue of their business model, NBFCs have grown rapidly over the
last few years as evidenced by their increase in market share. The
key differentiators for the NBFCs as compared to the banks and
cooperatives are.
Regulatory environment
All lenders are required to adhere to the KYC norms. NBFCs allegedly
have not strictly followed this regulation and hence have been under
the RBI s scanner for some time now. Currently NBFCs gold loan are
regulated by RBI. However, some state governments require
compliance with relevant state money lending statutes .if the state
governments succeed in enforcing this regulation the profit margin
of NBFCs would be further squeezed. There have been recent
complaints regarding high interest rates and penalty rates charged
by NBFCs. this has caught the attention of regulators any regulatory
move in this regard would impact the profit margin of NBFCs.
In its latest move, RBI has come up with a norm for NBFCs that does
not allow them to offer a loan above 60% of the value of gold.
RBI’s guideline is a setback for NBFCs because the new rules require
greater capital adequacy for the financing companies and the thresh
hold for the value of loan against gold is proposed to be at a lower
value. This would mean that ornaments of the same value are
expected to result in a lesser loan amount and that to at a slightly
higher cost.
There are many untapped areas where NBFCs could have a better
reach than the banks. The advantage o f trouble free and quick loan
processing by NBFCs would give them the edge over the banks.
NBFCs can raise funds through market borrowings, i.e. Commercial
papers to lower the cost of fund.
.
Chapter 3
LITERATURE REVIEW
The research project is to study “of IIFL gold loan in Ludhiana city”
kejriwalarun (2012) in his article “riches –to rags story of the gold loan
industry” in “business standard” remarked that “the reason people go to
GLCS is the next -to-nil tome they take in disbursing loans. Typically, GLCS lend
up to 80% of the value of gold, making customers a happy lot. However, last
Month, the reserve bank of INDIA (RBI) reduced the loan-to-value for GLCS to
60% of the gold content.
Bureau (2012) in his article “gold loan firms setting up SRO as RBI tightens
screws” in “economic times” concluded that “under the lens of the reserves
bank , leading gold finance companies have decided to form a self- regulatory
organization (SRO) which will frame fair business practices code for the
industry
John navin (2012) in his article “and the RBI on Leander” in “business world”
remarked that ,the stock market did not follow the centre banks restrictions on
the lone size of gold NBFCs to 60% of the loan to value (LTV) view. The share
price of Muthoot finance and Manappuram finance, the largest and second
player, fall 11.35% and 6.1% respectively, on 22 March, a day after the RBI
announcement.
Bureau (2012) in his article “RBI move on gold loan will trim companies
margins” in “economic times” remarked the gold loan financing companies on
Thursday welcomes the latest measures by the reserve bank, saying they will
strengthen the industry, but analysts pointed out that the clampdown will
erode the margins of these companies and curtail growth
Jayakumar john (2011) in his article “lure of the yellow metal” in “business
world” remarked the gold loan industry has recorded growth of 35% over the
past three year and explains how various gold loan companies rises and reach
the top positions”
Bureau (2011) in his article “should you invest in NCD of gold loan Finances
Company” in “economic times” concluded that with that we come to another
important aspect of debt investing risk. PUS bonds like those of NHAI, PFC
enjoy AAA rating, while muthoot finance enjoys a crisil AA rating.
Manappuram finance has a CARE AA- rating”
Regoanil (2010) in his article “gold loan: making gold work for you” in
business world remarked that “this perception toward gold loan has gradually
undergone a change and individuals have started seeing the value of loan
against gold as against availing a personal loan. The gold loan market that was
highly fragmented and dominated by local jewellers has gradually seen the
entry and growth of NBFCs and bank, a clear indication of the viability of gold
loans as an important loan product.”
“Jain T.R.” and Aggarwal, Dr S.C., statistics for M.B.A. 2nd edition, VK
publication
Objectives
In this project, the primary objective is to the consumer
awareness regarding gold loan
To find out the competitive positions of India info line
finance limited
Increases the relationship between India info line & other
company consumer
To find out the most preferred channel.
To find out what should do to boost India info line finance
limited.
Meaning of research
Research design
As search the design includes an outline of what the researcher will do from
writing hypothesis and its operational implication to the final analysis of data
Data collocation
Primary data
Primary data refer to the first hand fresh data collected from the field it
Secondary data
Secondary data refer to the already published information. Secondary data
was collected from various sources magazines, journals, newspaper, internet,
government, and industry
Data sampling
The target audient for this research includes Ludhiana city people. It was also
collected through personal visits to persons, by formal and informal talks and
through filling up the questionnaire prepared. The data has been analyzed by
using mathematical/Statistical tool.
option yes No
response 86 14
% 86% 14%
awereness response
14%
yes
no
86%
Analysis: - from the above graph it is clear that 86% of the population are
aware about the gold loan and 14% of the population are not
Interpretation: - from the above graph we can see that majority are aware
about the gold loan and few are not aware about the gold loan.
2 how do you come to know about gold loan?
reasons of awereness
option TV Advertisement Wall paintings
Direct marketing Newspaper banners
Friends & relatives
4% 8% 0%
5%
48%
22%
13%
Analysis:-it is clear from the table that 48% of the aware only because of tv
advertisement, 13% are because of hoardings, 22% are due to direct
marketing, 5% are newspaper, 4% are banners and 8% are due to friends and
family.
Options yes No
Responses 60 40
% 60 40
option yes no
0%
40%
60%
Analysis: - from the above graph we can see that 60% of the population have
deal and 40%have not deal in gold.
Interpretation: - from the above graph we can see that most of the people are
dealing in gold loan and very few are not dealing with gold loan.
4 Do you want to deal in gold loan in future?
Options yes No
Responses 73 27
% 73 27
future dealing
yes no
27%
73%
Analysis:- from the above graph it is clear that 73% of people are in a favour of
dealing with a gold loan in future and 27% are not in a favour.
Interpretation:- from the above graph it is clear that most of the population
are in favour of future dealing with IIFL .And very small are not in favour
5:-with which company you deal or you wish to deal?
company
Muthoot finance Muthoot fincrop
Mannapuram Karvy finance
Future group IIFL
other
5%
26% 29%
12%
9% 11%
8%
Analysis:- from the above graph it is clear that 29%of the population dealing
with muthoot finance, 26%are dealing with IIFL or wishing to deal with IIFL and
few are dealing with karvy, muthoot fincorp, future group
Interpretation:- from the above graph it is clear that most of the customer are
dealing with muthoot finance and IIFL. And very small are dealing with
Mannapuram, Muthoot fincorp, and very few are dealing with future group,
karvy.
6 which of the following is the most preferable thing at the time of availing
gold loan
preferances
rate of interest Maximum per gram rate
Flexibility customer dealing
Any other
1%
28% 28%
16% 27%
Analysis:-from the above graph it is clear that 28.3%of the population are
preferring only because of rate of interest ,26.7%are because of max per gram
rate,27.9%are because of good customer dealing because few are
flexibility16.2%and vary few are other
Interpretation:- from the above graph it is clear that most of the population
are preferring company only because of rate of interest, some are preferring
because of max per gram rate and good customer dealing, and vary few are
flexibility and other
7 are you satisfied with the current deal?
Options yes No
Responses 39 61
% 39 61
current deal
yes no
39%
61%
Analysis: - from the above graph it is clear that 39% of the population are not
satisfied with their current deal and 61% of the population are satisfied
Interpretation: - from the above graph it is clear that most of the population
are not satisfied with their current deal they want to change their current deal
and some are satisfied with their current deal.
8 which of the following are Main reason of satisfaction
satisfaction factor
rate of interest Maximum rate
Flexibility customer dealing
9% 6%
48%
37%
Analysis:-from the above graph it is clear that 48%f the population are satisfied
only because of rate of interest 37%are because of max per gram rate6% are
because of good customer dealing 9%because few are flexibility and vary few
are other
Interpretation: - from the above graph it is clear that most of the person are
satisfied with rate of interest and max per gram rate. Some are due to good
customer dealing, and flexibility, and very few are with others.
9 do you want to change your loan by any other company?
Options yes No
Responses 75 25
% 75 25
company change
no
25%
yes
75%
Analysis: - from the above graph it is clear that 75% of the population want to
change their company and 25%of the population do not want to change.
Interpretation: - from the above graph it is clear that most of the population
want to change their company and very few want to remain with the same
company.
10 are you aware about IIFL?
Options yes No
Responses 56 44
% 56 44
IIFL awareness
yes no
44%
56%
Analysis: - from the above graph it is clear that 56% of the population are
aware about the IIFL and 44%of the population are not aware about the IIFL.
Interpretation: - from the above graph we can see most of the population are
aware about the IIFL but still the rates of those people are also high who are
not aware about the IIFL.
11 have you ever visit in any branch of IIFL?
Options yes No
Responses 40 60
% 40 60
branch visit
yes no
40%
60%
Analysis: - from the above graph it is clear that60% of the population have not
visited any branch of IIFL gold loan company and 40% have visited.
Interpretation:- from the above graph we can see that majority of the
population have not visited any branch of IIFL gold loan company and few
have visited.
12 Do you wish to deal with IIFL?
Options yes No
Responses 77 23
% 77 23
IIFL dealing
23%
yes
77% no
Analysis: - from the above graph it is clear that people want to go the IIFL
because 77% of the population said yes for dealing and very few said no.
Interpretation: - from the above graph it is clear that most of the population
want to deal with IIFL for the purpose of gold loan and very few are not
interested.
CHAPTER6
RESULTS & FINDINGS
Luck davidet al marketing research, 2004 prentice hall India, edition 7th pg 53-
59
Kejriwalarun (2012): article “riches to rags story of the gold loan industry in
“business standard”
Bureau (2012): article “gold loan firms setting up SRO as RBI tighten screws” in
“economic time”
Jaykumar, jhon (2011): in this article “lure of the yellow metal” in in “business
world”
Bureau (2012): article “should you invest in NCDS of the gold loan finance
company” in “economic time”
Ragoanil (2012) in his article “gold loan: making gold work for you” in
“business world”
Websites
www.indiainfoline.com
www.5paisa.com
http://www.business-standard.com/india/news/riches-to-rags-storythe-
gold-loan-industary/473351
http://www.crindia.com/commodity/gold.html
http://www.business-standard.com/india/news/rbi-norms-to-moderate -
gold-loan-companies%5cgrowth-crisil/161230/on
APPENDIX
Questionnaire
General Information
NAME..............
ADDRESS....................
AGE...........
OCCUPTION.......................................
CONTACT NO....................
EMAIL...............................................
A yes B No
A. yes B. No
Q.4 Do you want to deal in gold loan in future? (If yes which company)
A. yes B. No
G. other (specify)
Q.6 which of the following is the most preferable thing at the time of availing
gold loan?
A. yes B. No
A. yes B. No
A. yes B. No
A. yes B. No
A. yes B. No
Signature.............................
Date................................