Summer internship project on

The study of investment preferences of people in the city of

Kolkata and fundamental analysis of companies in telecom
sector

In the partial fulfillment of the requirement for the award

of the degree of

Post graduation diploma in business management (P.G.D.M)

Submitted by

SHWETA SINGH

Under the esteemed guidance of

Dr. N.C. RAJYALAkshMI

Asst. Prof. Finance and deputy director Promotions

SIVA SIVANI INSTITUTE OF MANAGEMENT, KOMPALLY

SECUNDeRABAD

(2009-2011)

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 DECLARATION

I Shweta Singh declare that this Project Report titled THE STUDY OF INVESTMENT
PREFERENCES OF PEOPLE IN THE CITY OF KOLKATA AND FUNDAMENTAL ANALYSIS OF
COMPANIES IN TELECOM SECTOR had been carried out under the esteemed guidance of DR.
N.C. RAJYALAXMI, the faculty of Siva Sivani Institute of Management in partial fulfillment of
Post Graduate Diploma in Business management. I further declare that it is my original work as
a part of my academic course.

PLACE: SECUNDRABAD

DATE:

(SHWETA SINGH)

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 ACKNOWLEDGEMENT

I would like to take this opportunity to express my sincere gratitude to people without whose
support and guidance this project could not be successfully completed.

First of all I would like to thank SIVA SIVANI INSTITUTE OF MANAGEMENT for giving me the
opportunity to do the summer internship project and get a firsthand knowledge of the
corporate culture.

I would like to express my deep sense of gratitude to my project guide, Mr. MASOOD ALAM,
BRANCH MANAGER, ANGEL BROKING LTD. KOLKATA for his whole-hearted support in the
completion of the project. I would also like to thank the entire staff of ANGEL BROKING LTD.
KOLKATA for their unconditional help and support, especially Mr. SAYAN GUPTA , REGIONAL
HEAD , Miss SWETA KOTHARI, ASST. MANAGER- TRAINER, Mr. SANKHA SUBHRO, HEAD HR
EXECUTIVE, Mr. DEBJEET DAS, HR EXECUTIVE and all the trainers in the company.

Finally I would like to thank my Project guide, Dr. N.C. RAJYALAXMI for her invaluable guidance
and support throughout the project which was crucial in completing the project as per
schedule.

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 Table of contents
Chapter – 1
Introduction
 Introduction 1-2
 Scope of the study 2-3
 Significance of the Study 4
 Objectives of the study 4
 Literature Review 5
Chapter – 2
 Industry Profile 6-8
 Company Profile 8-16
 Departmental Details 17-18
Chapter-3
Research Methodology
 Introduction 19
 Research Design 19
 Sample Profile 20
 Tools and Methods Data Collection 20
 Data Processing and Analysis 21-29
 Limitations 30
 Findings and data interpretation 30-31
 Recommendations 31
Chapter 4
Fundamental analysis of telecom sector
 Introduction 32-33
 Indian telecom sector 33-37
 Key players in Indian telecom sector 38-41
 Data presentation 41-55
 Findings and comparison 56-57
 Recommendations 58
 Recent developments in telecom sector 58-59
Chapter 5
 Learnings from internship and Achievement 59
 Contribution to the company’s business 59
Annexures
 Questionnaire 60
 Bibliography 62

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 INTRODUCTION

WHAT IS INVESTMENT?

Jack Clark Francais in his book INVESTMENTS: ANALYSIS AND MANAGEMENT defines
investment as a “commitment of money that is expected to generate additional money and
requires a present certain sacrifice for a future uncertain benefit.” In any investment two
different attributes are generally involved: time and risk. The sacrifice takes place in the
present and is certain. The reward comes later and the magnitude is generally uncertain. In
some cases the element of time predominates (example government bonds) and in other cases
risk is the dominant attribute (stocks, options).

WHY DO WE INVEST?

In an economy, people indulge in economic activity to support their consumption

requirements. Due to inflation and other factors the value of rupee keeps on decreasing. The
value of 100 Rs today will not be the same tomorrow. It will obviously be lesser than today’s
100 Rs, i.e. any object whose value is 100 Rs today will worth more in terms of money
tomorrow. Any rational person will want to keep his earnings at pace with the current value of
money. For that reason people invest in various investment avenues like bank savings account,
fixed deposit, treasury bills, stocks, shares, futures and option etc. all these various investment
avenues vary in terms of rate of return and the risk level associated with it. However they have
one thing in common. All these investment avenues try to make the investors money run at a
pace with the market.

The three major factors that should be taken into account before making any kind of
investment are as follows

 Risk appetite of the investor

 Return of the investment and the risk associated with it
 Objective of the investor in near future

Investment traditionally was confined to the narrow realms of banks’ savings due to the trust
and belief associated with nationalized banks. But things have changed rapidly in the last two
decades. A lot of other investment avenues like insurance, especially ULIPS, MUTUAL FUNDS,
STOCKS AND SHARES, COMMODITIES AND CURRENCIES, IPOs etc. have become popular today

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as they have given high returns in the last decade. With the Indian industrial sectors making
tremendous progress, the balance sheets of major companies have shown high profits and have
created wealth for their investors.

However there always remain a doubt about where to invest, how much to invest and how to
invest. Ordinary men who are involved in their own businesses and jobs do not have time,
perseverance and expertise to determine investment techniques to get the maximum value for
their money, in spite of their willingness to invest. This demand for an expert opinion regarding
investment has given rise to the brokerage firms. The industry is a highly promising one in
today's date not only because it serves the purpose of being a mediator for the share buyers
but also because these firms provide the much needed information and expertise about the
market which is difficult for an ordinary man to get.

The more insightful and expert advice a firm can give to its clients, the more successful,
profitable and popular the firm becomes. some of the leading brokerage firms in India are
ANGEL BROKING, INDIA INFOLINE, RELIGARE, MOTILAL OSWAL, KOTAK SECURITIES,
INDIABULLS, ICICI SECURITIES, KARVY STOCKS ETC. these brokerage firms compete with each
other in terms of amount of brokerage, level of commitment to serve customer, settlement
period, exposure, customer service in terms of informing them through mails, messages etc.

Started by mr. dinesh thakkar in the year 1987, ANGEL BROKING today is one of the top three
brokerage firms in india. professionally managed by a team of 6400+ direct employees, it has a
nationwide network comprising 21 regional offices, 111 branches, 22 franchise offices, 3 PCG
offices, 8757 Registered subbrokers and 17600+ active trading terminals which cater to the
requirements of 6,70,700+ retail clients. The company is a member of BSE, NSE, NCDEX, MCX,
and CURRENCY FUTURES segment both on NSE AND MCX. IT has also won the prestigious
"major volume driver" award by BSE for 4 years in a row, since 2005.

SCOPE OF THE STUDY

Scope of the study refers to the areas covered during the study and the aspect of the business
to which I was exposed to. The project mainly focuses on the investment preferences of the
people especially of the population in Kolkata. The study mainly aims at analyzing the psyche of
the investors, their way of thinking, their views about the stock market, their assessment of the

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priorities of life and investment pattern selected. The study also seeks to analyze the fear factor
among investors due to market volatility.

Apart from that the study also covered other relevant areas like methods of client acquisition,
steps undertaken by the company to enlarge customer base, process of dealing with shares,
risk management in the broking firm, hierarchical set-up and promotional strategies.

CLIENT ACQUISITION AND ENLARGEMENT OF CUSTOMER BASE: Angel broking truely lives up
to its slogan of SERVICE TRUELY PERSONALISED. Acquiring loyal and good clients is the first
priority of any business to flourish. ANGEL BROKING operates its activities in three branches in
kolkata. Out of that one branch is entirely dedicated to the entire process of client acquisition
and promotional activities. There are approximately 50 employees working in the branch
located in PRINCE ANWARSHAH ROAD, KOLKATA. There are 6 teams led by AUMs who guide a
team of 10 RMs and SRMs to help the firm enlarge its customer base. Meeting client on a one-
to-one basis according to the convenience of the client is the primary method of acquisition.
The AUMs take special care that the visiting SRMs and RMs strictly adhere to the appointment
timings and also pass on correct information to the clients without misleading them.

This branch also carries out many promotional activities in order to improve ANGEL'S presence
in the market and in order to improve brand visibility across the city. The promotional activities
mainly involved visiting big appartments and other populated housing colonies and setting
canopy for promoting the company, corporate presentation in other companies.

Another branch located at LORD SINHA ROAD, KOLKATA is dedicated mainly towards online
trading. Dealers who are actually responsible for carrying out the deals sit in front of the
computer terminals and actually carry out the task of buying and selling of shares after
consulting with the client.

Another major department of the company is the RISK DEPARTMENT. There is a facility of
providing exposure to clients for trading which is simply an additional amount of money that
the company agrees to give its clients if they fall short of money during buying shares. But this
is done only after a careful assessment of the credit-worthiness of the client and his/her ability
to repay. This assessment is carried out by the risk department.

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 SIGNIFICANCE OF THE STUDY
Brokerage firms today are evolving as a great business avenue. But it is yet not so much popular
among the common man. The most important reason is that shares and stocks are still
considered to be an unconventional and risky area of investment. The study aims at exploring
the potential hidden in this business.

OBJECTIVE OF THE STUDY

1. To study the various investment routes preferred by investors and their psyche while
investing

2. To study the level of investors’ awareness about the relevance of investment planning
and future financial objective

3. Is stock trading a popular avenue of investment and its potential to emerge as a popular
form of investment in the near future?

4. To understand the methods and procedure of online trading.

5. To understand marketing strategy and lead-generating activity

6. To understand the growth opportunities and the company's preparation to tap the
market potential

7. To understand investor's expectation from a brokerage firm and level of satisfaction

among them

8. To study departmental details, hierarchy and working procedure

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 LITERATURE REVIEW
Investment preferences being a very popular and well-known subject, there are a lot of books,
journals and articles available on the topic. I referred to 3 basic books for getting a preliminary
knowledge and gaining an insight about this subject. I also referred to articles on the internet.
The various books available for the subject are INVESTMENTS BY HERBERT B. MAYO,
INVESTMENT MANAGEMENT BY V.K. BHALLA, INVESTMENT ANALYSIS AND PORTFOLIO
MANAGEMENT BY PRASANNA CHANDRA .

Herbert B. Mayo in his book INVESTMENTS calls “investment” a means to an end. He outlines
the objectives that must be adhered to while investing. Those are as follows:

1. Which securities are issued, bought and sold.

2. Data on specific firms and mutual funds. Economic data or general material on
investing.

Also Herbert talks about efficient markets which are created when there is a rapid
dissemination of information and stiff competition among investors. Efficient markets imply
that any security’s current price embodies all the known information concerning potential risk
and return the individual cannot expect to earn abnormally high returns over an extended
period of time.

Another important book on the topic is INVESTMANAGEMENT BY V.K. BHALLA. He writes in his
book about the trend of savings in India. Gross domestic savings (GDS) reached a new peak of
31.1% of GDP at current market prices in 2004-05 which was an improvement over the previous
peak of 28.9% in 2003-04. The book presents a statistics which is relevant to the study. Author
says overall investment rate increased by 2.3 percentage points of GDP to 33.8%, reflecting the
increase in current account deficit relative to GDP. MR BHALLA also points out the following
factors due to which investment has become very popular today

1. Provision of tax incentives in respect of investments in specified channels

2. Increase in tendency of people to hedge against inflation
3. Availability of large and attractive investment alternatives

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CHAPTER 2
INDUSTRY PROFILE
Market is a place where the continuity of sale and purchases is maintained and the link is held
between vendor and vendee. We see different kinds of markets differences of demand and
viewpoint. Now if we talk about financial market it is the market where transactions of financial
services are held or financial assets are transformed. So, financial market keeps up flow of
money. According to Prof. Van Horne, purpose of financial markets is to allocate savings
efficiently in an economy to ultimate users either for investment in real assets or for
consumption. The two main components of Indian financial market are money market and
capital market. The market which has been formed for transaction of short term fund in
industry and commerce is called money market. The market from where long term capital is
collected for industry, trade and commerce is called capital market. It consists of a series of
channels through which the savings of the community are made available for industrial and
commercial enterprises and public authorities. The capital or the securities market has two
interdependent and inseparable segments, the new issues (primary market) and the stock
(secondary) market.

PRIMARY MARKET

The primary market provides opportunity to issuers of securities; government as well as

corporates, to raise resources to meet their requirements of investment and/or discharge some
obligation. They may issue the securities at face value, or at a discount/premium and these
securities may take a variety of forms such as equity, debt etc. They may issue the securities in
domestic market and/or international market. The primary market issuance is done either
through public issues or private placement. A public issue does not limit any entity in investing
while in private placement, the issuance is done to select people. In terms of the Companies
Act, 1956, an issue becomes public if it results in allotment to more than 50 persons. This
means an issue resulting in allotment to less than 50 persons is private placement. There are
two major types of issuers who issue securities. The corporate entities issue mainly debt and
equity instruments (shares, debentures, etc.), while the governments (central and state
governments) issue debt securities (dated securities, treasury bills).

SECONDARY MARKET

Secondary market refers to a market where securities are traded after being initially offered to
the public in the primary market and/or listed on the Stock Exchange. Majority of the trading is

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done in the secondary market. Secondary market comprises of equity markets and the debt
markets. The secondary market enables participants who hold securities to adjust their holdings
in response to changes in their assessment of risk and return. They also sell securities for cash
to meet their liquidity needs. The secondary market has further two components, namely the
over-the-counter (OTC) market and the exchange-traded market (ETC). OTC markets are
essentially informal markets where trades are negotiated. Most of the trades in government
securities are in the OTC market. All the spot trades where securities are traded for immediate
delivery and payment take place in the OTC market. The exchanges do not provide facility for
spot trades in a strict sense. Closest to spot market is the cash market where settlement takes
place after some time. Trades taking place over a trading cycle, i.e. a day under rolling
settlement, are settled together after a certain time (currently 2 working days). Trades
executed on the leading exchange (National Stock Exchange of India Limited (NSE) are cleared
and settled by a clearing corporation which provides settlement guarantee. Nearly 100% of the
trades settled by delivery are settled in Demat form. NSE also provides a formal trading
platform for trading of a wide range of debt securities including government securities. A
variant of secondary market is the forward market, where securities are traded for future
delivery and payment. Pure forward is outside the formal market. The market has witnessed
fundamental institutional changes resulting in drastic reduction in transaction costs and
significant improvements in efficiency, transparency and safety. Reforms in the securities
market, particularly the establishment and empowerment of SEBI, market determined
allocation of resources, screen based nation-wide trading, dematerialization and electronic
transfer of securities, rolling settlement and ban on deferral products, sophisticated risk
management and derivatives trading, have greatly improved the regulatory framework and
efficiency of trading and settlement. Indian market is now comparable to many developed
markets in terms of a number of qualitative parameters.

The securities markets in India have witnessed several policy initiatives, which has refined the
market micro-structure, modernized operations and broadened investment choices for the
investors.

Broking houses in India

The Indian broking industry is one of the oldest trading industries that have been around even
before the establishment of the BSE in 1875. Despite passing through a number of changes in
the post liberalization period, the industry has found its way towards sustainable growth. India
is a country having a big list of Broking Houses. The Equity Broking Industry in India has several
unique features like it is more than a century old, dynamic, forward looking, and good service
providers, well conversant, highly innovative and even adaptable. The regulations and reforms
been laid down in the Equity Market has resulted in rapid growth and development. Basically,

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the growth in the equity market is largely due to the effective intermediaries. The Broking
Houses not only act as an intermediate link for the Equity Market but also for the Commodity
Market, Foreign Currency Exchange Market, and many more. The Broking Houses has also
made an impact on the Foreign Investors to invest in India to certain extent. In the last decade,
the Indian brokerage industry has undergone a dramatic transformation. From being made of
close groups, the broking industry today is one of the most transparent and compliance
oriented businesses. Long settlement cycles and large scale bad deliveries are a thing of the
past with the advent of T+2 settlement cycle and dematerialization. Large and fixed
commissions have been replaced by wafer thin margins, with competition driving down the
brokerage fee, in some cases, to a few basis points. There have also been major changes in the
way business is conducted. Technology has emerged as the key driver of business and
investment advice has become research based. At the same time, adherence to regulation and
compliance has vastly increased. The scope of services have enhanced from being equity
products to a wide range of financial services. Investor’s protection has become a matter of
great significance.

COMPANY PROFILE
Angel broking started its journey as a sub broker with 3 employees and 21 clients. In a short
span of 23 years since inception, the Angel Group has emerged as one of the top five retail
stock broking houses in India, having membership of BSE, NSE and the two leading Commodity
Exchanges in the country i.e. NCDEX & MCX. Angel Broking is also registered as a Depository
Participant with CDSL. International Finance Corporation (IFC), a World Bank subsidiary, has a
12.35% stake in Angel In fin, the holding company of Angel group. IFC is a very highly reputed
Washington based finance company.

Today the angel group is managed by a team of more than 6400 direct employees and has a
nationwide network comprising of 21 Regional hubs, 111 branches and 8757 sub brokers &
business associates. Angel is 100% focused on retail stock broking business unlike any other
larger national broking house. The group currently services more than 7lakh retail clients. Angel
habitually generates value added features without the cost burden being passed on to the
clients as they strongly believe that better understanding of client’s needs and wants is their
top priority. Their e-broking facility is one such effort, which gives the client a platform to
access state of the art trading facility at the click of a button. Angel has always strived for
delivering customer delight and developing strong long term bonds with its clients as well as
channel partners. Angel thrives on a vision to introduce new and innovative products and

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services constantly. Moreover, Angel has been among the pioneers to introduce the latest
technological innovations and integrate them efficiently within its business. Angel Booking’s
tryst with excellence in customer relations began more than 23 years ago. Angel Broking is lead
by a highly regarded management team that has invested cores of rupees into a world class
Infrastructure that provide clients with real-time service & 24/7 access to all information and
products. The flagship Angel Broking Professional Network offers real-time prices, detailed data
and news, intelligent analytics, and electronic trading capabilities, right at customer’s fingertips.
This powerful technology complemented by knowledgeable and customer focused Relationship
Managers, Angel is creating a world of Smart Investor. Angel Broking offers a full range of
financial services and products ranging from Equities to Derivatives to enhance customer’s
wealth and hence, achieve customer’s financial goals. Angel’s clients Relationship Managers are
available to the customers to help them in their financial planning. To provide the highest
possible quality of service, Angel Broking provides full access to all of their products and
services through multiple channels. Angel Group has emerged as one of the top 3 retail broking
houses in India and incorporated in 1987. Today, Angel has emerged as a premium Indian stock-
broking and wealth management house, with an absolute focus on retail business and a
commitment to provide "Real Value for Money" to all its clients.

ANGEL’S BUSINESS

 Equity Trading
 Commodities
 Portfolio Management Services
 Mutual Funds
 Life Insurance
 Personal Loans
 IPO
 Depository Services
 Investment Advisory

ANGEL GROUP

 Angel Broking Ltd.

 Angel Commodities Broking Ltd.
 Angel Securities Ltd.

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ANGEL’S VISION

To provide best value for money to investors through innovative products, trading/ investments
strategies, state of the art technology and personalized service.

ANGEL’S MOTTO
To have complete harmony between quality-in-process and continuous improvement to deliver
exceptional service that will delight our Customers and Clients.

ANGEL’S ORGANIZATIONAL STRUCTURE

Central support
Office (CSO)

Regional Office Regional Office Regional Office

Branches Branches

Angel Clients Business

Associates

Angel Clients

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MANAGEMENT

Name Designation & Department

Mr. Dinesh Thakkar Founder, Chairman & Managing Director

Mr. Lalit Thakkar Director-Research

Mr. Amit Majumdar Chief Strategy Officer

Mr. Sachinn Joshi Executive Director & CFO

Mr. Vinay Agarwal Executive Director-Equity Broking

Mr. Nikhil Daxini Executive Director-Sales & Marketing

Mr. Hitungshu Debnath Executive Director-Distribution & Wealth Management

Mr. Mudit Kulshreshtra Executive Director-Business intelligence & Analytics

Mr. Santanu Syam Executive Director-Operations

Mr. Ketan Shah Associate Director-Information Technology

Ms. Pinky Kothari Associate Director-Sales & Marketing

Ms. Naveen Mathur Associate Director-Commodities & Currencies

Online Trading (Equity and Derivatives)

Angel provides guidance in the exciting world of stock market with suitable trading solutions
and value-added tools and services to enhance your trading experience and managing stock
portfolios will seem like child’s play. Angel’s e-broking services are specially designed for net-
savvy traders and investors who prefer operating from their home or office, through the
internet. Customer can access three different e-broking platforms, each other tailored to meet
different needs.

Angel Investor

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  Browser based platform for investors – simple as internet surfing.
 Static Quotes refreshed.
 Works behind firewalls.
 BSE, NSE, F&O, MCX & NCDEX – all on a single screen.
 MCX Currency.

Angel Trade

 Browser based platform for active investors & traders.

 Real time quotes.
 Multiple exchanges - BSE, NSE, F&O, MCX & NCDEX – on a single screen.
 MCX Currency.
 No installation required.
 Advantage of mobility.

Angel Diet

 Application based platform, ideal for day traders.

 Streaming quotes for continues rates refresh.
 Speedy execution of trade.
 BSE, NSE, F&O, MCX & NCDEX – on a single screen.
 MCX Currency.
While all platforms are user friendly & require simple navigation, client also has access to an
integrated 24x7 back office to handle queries/resolve issues.

Quality Research

 Wide range of daily, weekly and special Research reports.

 Expert Sector Analysts with professional industry experience.

Advisory

 Real-time market information with News updates.

 Investment Advisory services.
 Dedicated Relationship Managers.
 Portfolio Management Services.

Support

 24x7 Web-enabled Back Office.

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  Centralized Help Desk.
 Live Chat support system.

Commodities

Angel aims to harness the immense potential of the Commodities market by providing
customer a simple yet effective interface, research and knowledge. Angel provides user-friendly
online platforms for commodity trading in the leading commodity exchanges. The Commodities
Research team provides clients with a total update of commodities across the board. With a
well spread marketing team, Angel Commodities are able to tap clients across states and ensure
that Angel gain their confidence to maintain long term client relationships. Angel also offers an
Angel Commodity Privilege Scheme (ACPS) wherein the investor gets value added and
customized services. Thus, the entire spectrum works towards one goal – Client Satisfaction.

THE ANGEL ADVANTAGE

Online Trading

 Three different online products tailored for traders & investors.

 Single screen customized Market-Watch for MCX & NCDEX with BSE & NSE.
 Streaming quotes.

Top quality Research

 In house research on more than 25 commodities.
 Highly skilled Analysts with professional industry experience.
 Daily, Weekly and Monthly Research Reports.

Pro-active Relationship Management

 Active advisory desk.
 Efficient & nationwide network.
 Seminars, workshops and investment camps for investors.

PMS (PORTFOLIO MANAGEMENT SERVICES)

Portfolio Management needs expert guidance so that client can arrange the right opportunities
to the right funds thereby earning good returns and steady growth. Angel is a registered firm
with SEBI for PMS. In PMS the fund manager has the discretionary power to invest and control
the fund. Minimum fund a customer has to invest in any registered PMS is 5lakh. Angel’s

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Portfolio Management Services (PMS) takes into consideration your risk bearing capacity and
return expectations. After a thorough analysis, Angel’s dedicated Relationship Managers chalk
out investment strategies and avenues that best suit your risk-return appetite. Angel has 3
different schemes of PMS.

Angel Bluechip Fund: The objective of the scheme is to generate capital appreciation in
medium to long term through equity and equity related instruments mainly comprising of large
cap companies. The fund manager of this scheme is Phani Sekhar.

Investment Strategy

 Focus on large cap stocks, quality mid cap stocks may be considered.
 Shielding investors from cyclical fluctuations.
 Combination of top down and bottom up approaches for selecting stocks.
 Portfolio comprising growth and value stocks.
 Allocation of sectors and stocks to be dynamically structured in tune with changes in
broader market conditions.
Parameters Guiding the Investment Decision
 70% allocation to large cap companies.
 Exposure to any sector to be less than 25% of the portfolio size.
 Exposure to any script to be less than 10% of the portfolio size.
Investor profile
The suggested time horizon for Angel Bulechip Fund is 12-15months, which makes it ideal for
investors with low to moderate risk appetite.

Angel growth Fund: The objective of the scheme is to render capital appreciation in medium to
long term, through equity and equity related instruments largely comprising of mid cap and
small cap companies. The fund manager of this scheme is Phani Sekhar.

Investment Strategy

 Focus on growth segments: infrastructure, services, manufacturing and domestic

consumption.
 More preference on mid cap and small cap stocks, quality large cap stocks may be
considered depending on market conditions.

Parameters Guiding the Investment Decision

 Exposure to any sector to be less than 25% of the portfolio size.
 Exposure to any script to be less than 10% of the portfolio size.

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  Portfolio comprising growth and value stocks, but strong on growth stocks.

Investor profile
The suggested time horizon for Angel Growth Fund is 15-18months, which makes it ideal for
investors with moderate risk appetite.

Angel Lotus: The newest PMS scheme of Angel is Angel Lotus. In this scheme Angel build
client’s wealth by discovering the hidden gems in the stock market through strong focus on
fundamental analysis and active portfolio management. It is a multi cap PMS scheme. It is a
close ended PMS scheme. The fund manager of this scheme is Rajen Shah.

DEPOSITORY SERVICES

Clients can enjoy the dual benefits of trading and depository services under one roof and
experience efficient, risk-free and prompt depository service. Angel is registered as a
Depository Participant with CDSL.

ANGEL ADVANTAGE

 Automated pay-in facility.

 Access information – Anytime, Anywhere.
 Quarterly Demat statements with valuation.
 Statements on demand.
 View Demat A/C statement online.
 Competitive transaction charges.
 No risk of loss, wrong transfer, mutilation or theft of share certificates.
 Hassle free automated pay-in of your sell obligation with no need for physical
instruction.

SOME NEW SERVICES OF ANGEL

M Connect

The Angel M Connect service has been launched to allow Retail Investors to access important
data on their mobiles at free of cost, such as:

 Market News/Analysis & Expert Views 24x7.

 Stock Updates and Market Statistics.

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  Real time Equity, F&O, Commodities and MF rates on a single platform.
 Top 10 Local and Global indices.
 Back Office Data i.e. Ledger, Open positions, Holdings, PMS.

Prepaid Brokerage
Prepaid brokerage is a scheme where ANGEL provides the facility of brokerage vouchers to the
prospective clients by giving them special brokerage rate with time validity, in turn taking a
commitment of absolute brokerage amount from them.

Features

 Zero Account Opening Charges.

 Attractive Brokerage Rates with each Prepaid Vouchers.
 Free DP AMC for 1 year.
 Vouchers available staring from Rs. 2000 – Rs. 250000.
 SMS Alerts for Activation / Renewal / Expiry
 Assured Gifts worth thousands with every account opened.
 Easy & Fast recharge from Anywhere – Anytime.
 Free Wealth Management Application with every Account.

E CHOPDA

E Chopda (Personal Wealth Accountant) is a value added Wealth Management Application

tendered by Angel Broking to its clients for managing their Wealth, Personal Finance and
Taxation. It helps the client in the following ways:

 Manage and Plan their Investments.

 Manage Personal and Family Portfolio.
 Accounting and Tax Planning.
 Eliminates cumbersome paper work as you get details of all your finances in just one
click.
Features
 Comprehensive Financial Planning Application.
 Integrated Wealth Management, Accounting & Taxation.
 Automatic generation of Income Statements and ITR’s.
 Automatic updation of Investments done through “Angel”.
 Facility to record Investments made outside “Angel”.
 Integrated SIP / EMI / Retirement Calculators.
 Graphical representation of Assets & Liabilities.
 User friendly interface for easy navigation.
 Work Online & Offline.
 Print / Export your Financial Information to Excel / PDF.
 Automatic Version Upgrade.

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Departmental analysis
Strategic departments at CSO

Angel has its central support office (CSO) situated at Mumbai. All the strategic departments of
Angel are there at the CSO. There are 3 centers of the CSO all situated at Mumbai. The various
departments are given below:

Akruti Trade Centre

• Risk Management
• Online Surveillance & Central Dealing Desk
• Information Technology
• Operations
• Compliance
• Demat / DP & Pledge
• Help-Desk
Acme Plaza
• Equity Research
• Institutional Dealing
• E-Broking
• Business Development
• Corporate Finance
• Corporate Communication
• Human Resources
• Web Development
• Product Development
Premier House
• Accounts
• Commodities
• Currencies
• Quality Assurance

DEPARTMENT AT THE REGIONAL BRANCHES

The major departments at the regional branches of Prince Anwar shah road and Lord Sinha
road(Kolkata) were as follows:

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DEALING DEPARTMENT: This department was at Lord Sinha road(Kolkata).

Tasks involved: The main task of this department was doing share trading on the customers’
behalf so that the customer has a minimum loss and maximum gain. The dealers were selected
after a rigorous interview. They were provided with computer terminals with software like
ODIN installed into it for the purpose of share trading.

Responsibilities: To keep the customer informed about the decisions regarding trading and
change in his portfolio and to prevent losses. The dealers also had landline telephone in front of
their desks to be in touch with the customer always and inform him/her before taking any
major decision.

KYC DEPARTMENT (KNOW YOUR CUSTOMER): This department was located at Prince Anwar
shah road branch.

Tasks involved: The main task was to fill up and check the form details of the customer, match
each signature and ensure that the customer has signed at all the requisite places, have pasted
photographs wherever required and done all the formalities on paper.

Responsibilities: The major responsibility of this department was to avoid any legal
complication and adhere to the rules and regulation regarding documentation. The department
ensured authenticity and validity of the customer details.

RISK DEPARTMENT: This department was located at Lord Sinha road (Kolkata).

Tasks involved: The major task was to assess the credit worthiness of the client and to decide
on the exposure which could be given to a client. The clients were evaluated according to their
past performance and the department decided whether and how much exposure to be given.

Responsibilities: Ensuring financial safety of the company by not allowing credit to unworthy
customers and also to improve business by providing credit facilities to worthy customers.

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CHAPTER 3
RESEARCH METHODOLOGY
INTRODUCTION
A research is mainly carried out in order to generate accurate information that helps in decision
making. Research can also be defined as an objective and systematic process of gathering,
recording and analyzing data for aid in making business decisions.
As it is well known that research aids the process of knowledge formation and serves as an
important source of providing guidelines to different business, government and social
organisations, this research work undertaken by me focuses mainly on the idea of investment
preferences of individuals. This research work mainly aims at analyzing the profile of the
investors and what are the different factors that an investor analyses before investing. During
my study I came across the fact that there were a lot of factors influencing investors’ decision
about where to invest. The level of knowledge, awareness about investment avenues, proper
guidance, number of dependants, risk appetite and age were some of the major factors that
significantly influenced the invest preferences.

The knowledge of the critical perspectives or philosophy of science, techniques of data

collection and tools or methods of analyzing data are essential for undertaking research in a
systematic manner. For that reason I made a thorough reading of the existing literature and
book that carried relevant information along with gathering information through secondary
sources.

RESEARCH DESIGN
A research design can be mainly classified into three types depending on the extent of
knowledge and literature already available on the research topic. The three types of research
design are as follows:
1. EXPLORATORY: which is used when the research is carried out for the first time and there is
not any adequate amount of information on the topic

2. DESCRIPTIVE: Simply describes characteristics of samples and determines frequency with

which something occurs or how two variables vary together. This research design is carried on

23 | P a g e
to estimate proportions of people in a specified population who behave in a certain way and to
make specific predictions.

3.EXPERIMENTAL DESIGN: A controlled method of observation in which the value of one or

more independent variables is changed in order to assess its causal effects on one or more
dependent variables.

The research design of my study is primarily descriptive as a lot of research work has already
been done in the area of investment preferences.

SAMPLE PROFILE:
The sample surveyed for the study was mainly Kolkata based investors especially private sector
employees and government sector employees and businessmen. The data was provided by the
company whom I contacted on phone and also visited to have a face-to-face talk.

Almost 90% of the investors were in the age group of 30-40 and were corporate employees
with high income of 30000-60000. 99% of the investors were male which shows that female
investors are very few in kolkata.

TOOLS AND METHODS OF DATA COLLECTION:

The tool primarily used for data collection is questionnaire consisting of 10 questions which
mainly tries to find out the customers' profile, their future financial objectives and their method
of investment in order to fulfill the objective.

The different methods of data collection are as follows:

1. Personal interviews
2. Telephonic interviews

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 DATA PROCESSING AND ANALYSIS

Occupation

Frequency Valid Percent

Private sector 57 57.0

employees

Government 30 30.0
service

Businessman 11 11.0

self-employed 2 2.0

Total 100 100.0

Out of the 100 respondents, 57 were private sector employees, 30 were in government jobs,
11were businessmen and 2 were self-employed.

Age

Frequency Valid Percent

25-30 27 27.0

30-35 33 33.0

35-40 28 28.0

above 12 12.0
40

Total 100 100.0

Out of the 100 respondents, 27 were in the age group 25-30, 33 were in the age-group 30-35,
28 were in the age-group 35-40 and 12 were in the age group above 40.

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 Monthly income

Valid
Frequency Percent

10000-20000 3 3.0

20001-30000 17 17.0

30001-40000 29 29.0

40001-50000 32 32.0

50001-60000 13 13.0

60001-70000 6 6.0

Total 100 100.0

Out of the 100 respondents, as many as 32 respondents were in the high-income group of
40000-50000, 29 had 20000-30000 as their monthly income, 17 were in the range of 20000-
30000, 3 in the range of 10000-20000, 13 were in the age group 50000-60000 and only 6 were
in the very high income group as 60000-70000

Future financial objective

Valid
Frequency Percent

buying a house 27 27.0

buying a car 17 17.0

children's 30 30.0
education

daughter's 8 8.0
marriage

Others 18 18.0

Total 100 100.0

26 | P a g e
 Out of the 100 respondents, 27 had buying a house as their main objective, 17 had buying a car,
30 had children’s education, 8 had their daughter’s marriage and 18 had other objectives like
saving for retirement, foreign tour etc.

Investment avenue

Valid
Frequency Percent

mutual fund 36 36.0

shares and stocks 33 33.0

bank fixed deposit 30 30.0

national savings 1 1.0

certificates

Total 100 100.0

About 36% of the respondents were interested in mutual fund, 33% in shares and stocks and
30% in bank fixed deposits, and 1 percent in national savings certificates.

Goal achievement(investment)

Frequency Valid Percent

Yes 82 82.0

No 2 2.0

can't 16 16.0
say

Total 100 100.0

27 | P a g e
Out of the 100 respondents, 82 believed that their investment planning will help them in
achieving their goals while 2 said they did not believed. As many as 16 were not sure of the fact
that whether they will be able to achieve their goal or not.

Future objective and investment

Frequency Valid Percent

yes 94 94.0

no 6 6.0

Total 100 100.0

Out of the 100 respondents 94 said their choice of investment avenues were done keeping in
mind the future objective while only 6 said they did not pay much attention to selecting the
investment avenue for meeting their financial objective.

Stocks is wise decision

Frequency Valid Percent

yes 70 70.0

no 30 30.0

Total 100 100.0

Out of the 100 respondents 70 believed that investing in stocks is a wise decision and 30
believed that it was not.

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 Heard about angel broking

Frequency Valid Percent

yes 70 70.0

no 30 30.0

Total 100 100.0

Out of the 100 respondents, as many as 70 had heard the name of the company ANGEL
BROKING and only 30 did not hear.

Ready to take risk

Frequency Valid Percent

yes 54 54.0

no 46 46.0

Total 100 100.0

Out of the 100 respondents 54 were ready to take more risks to get more returns and 46 were
not ready to take more risks to get returns.

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 Is anxious of stock fluctuation

Freque Valid
ncy Percent

Yes 48 48.0

No 52 52.0

Total 100 100.0

Out of the 100 respondents, as many as 52 were not anxious by stock market fluctuation and
were likely to behave rationally while 48 were anxious about market fluctuation.

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 Future financial objective * Investment avenue Cross tabulation

Investment avenue

national Total
mutual shares and bank fixed savings
fund stocks deposit certificates

buying a house 10 9 8 0 27

buying a car 8 6 2 1 17

children's 9 9 12 0 30
education

daughter's 4 1 3 0 8
marriage

Others 5 8 5 0 18

Total 36 33 30 1 100

Out of the 27 respondents who had buying a house as their main objective, as many as 10
respondents thought investing in mutual funds is the best followed by stocks and shares. Out of
the 30 respondent who had their childrens’ education as primary future financial objective, as
many as 12 respondents thought bank fixed deposit was the best option.

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 Future financial objective * age Cross tabulation

Age

25-30 30-35 35-40 above 40 Total

Future buying a 8 9 10 0 27
financial house
objective
buying a car 9 5 2 1 17

children's 6 12 7 5 30
education

daughter's 0 0 5 3 8
marriage

Others 4 7 4 3 18

Total 27 33 28 12 100

Out of 27 people in the age-group 25-30 years as many as 8 people had buying house as their
main objective.
Out of 33 people in the age-group 30-35 years, a majority of 12 people had children’s education
as their main objective followed by buying a house for 9 respondents and 5 were interested in
buying a car. 7 were also interested in other objectives like foreign tour, saving for their parents
etc.
Out of 28 people in the age-group 35-40 years, 10 had their financial objective as buying a
house while 7 respondents had priorities like children’s education. Only 2 were interested in
buying a car.
Out of the 12 people in the age group above 40 years, 3 had some other objectives like saving
for medical expenses etc while 5 had children’s education as main objective followed by 3 who
had daughter’s marriage and an equal number 1 had buying house as his main objective.

32 | P a g e
 monthly income * Investment avenue Cross tabulation

Investment avenue

national Total
shares and bank fixed savings
mutual fund stocks deposit certificates

monthly 10000- 2 1 0 0 3
income 20000

20001- 7 3 6 1 17
30000

30001- 10 10 9 0 29
40000

40001- 13 11 8 0 32
50000

50001- 3 4 6 0 13
60000

60001- 1 4 1 0 6
70000

Total 36 33 30 1 100

Out of the 3 respondents with monthly income between 10000-20000, 2 were interested in
mutual fund, people in middle income group of 20000-30000 were more keen on investing in
mutual fund as well as fixed interest bearing securities like bank fixed deposits. Out of 17
people in the age group 20000-30000, 7 were interested in investing in mutual fund and 6 were
interested in bank fixed deposit.

33 | P a g e
LIMITATIONS
1. Unwillingness to talk and share any kind of information
2. Some clients were out of station due to which it was not possible to meet them
3. March-april being end of financial year, many investors were not willing to make fresh
investments or entertain any kind of financial advisory from any broking house.

FINDINGS AND DATA INTERPRETATION

 Mutual fund are a popular source of investment among kolkatans. This shows they want
to invest in shares and prefer the institutional route rather than participating
individually. Popularity of share trading and investing in bank was same. People are
assured of higher returns and want to invest in stocks.

 People in the age group (b)25-30 years mainly stated their financial objective as buying a
house or a car. Among the respondents in the age-group (c) 30-35 years, the primary
objective was childrens’ education followed by buying a house and buying a car. Among
the people in age group (d)35-40 years buying a house was the top priority along with
childrens’ education and daughters’ marriage Among the people in age group (e) above
40 years, other objectives like saving for contingency plans and post-retirement
requirements were topmost priority.

 Riskless investment avenues like bank FDs and national savings certificate are popular
among people who have childrens’ education as their primary objective. People who
had buying a house as the primary future objective were more keen in investing in
mutual fund and stocks and shares.

 People in the high income group 30000-60000 opted for mutual funds and stocks and
shares as major avenue of investment.

 Also in general people are more assured of their returns given that they are willing to
take risk, by investing in mutual funds.

 Insurance is one product that all investors wanted to opt for in order to cover the life
risk. Otherwise there were very few people who wanted to invest in insurance

34 | P a g e
  The people who wanted to invest in equity market mainly were high income group
people mainly working in private sector. Servicemen were apprehensive towards
investing in equity market.

 Most of the investors were not anxious toward stock market fluctuation and opted to
keep their cool at times of bullish or bearish trend. So they were unlikely to adopt an
irrational behavior like buying at times of higher valuation and selling at times of bearish
market adding to panic of market.

 Investors in Kolkata were ready to take risk and believed that investing in stock is a wise
decision.

 More than half of the population surveyed was ready to take risk to get more returns
and therefore they were more interested in stock market.

 ANGEL BROKING LTD. has a good name and was a popular brand in the field of providing
investment advices and share trading.

RECOMMENDATIONS
1. Dealers and relationship managers should advise customers to practice patience and
take a rational decision while investing in stock market.
2. Relationship managers who are the companies face for the customers should help the
clients to learn more and more about the stock market by giving them the correct
information.
3. The dealers and company can make an effort to promote SYSTEMATIC INVESTMENT
PLANNIG(SIP) by educating the customers and showing the clients the benefits of that.
4. People in the age group 10000-20000 were not so much interested in investing in stock
market and were apprehensive of losing their money. The broking house should make
an effort to infuse confidence in these investors by giving them right and customized
advice.

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FUNDAMENTAL ANALYSIS OF TELECOM
SECTOR

INTRODUCTION
WHAT IS FUNDAMENTAL ANALYSIS?
Fundamental Analysis involves examining the economic, financial and other qualitative and
quantitative factors related to a security in order to determine its intrinsic value.

It attempts to study everything that can affect the security's value, including macroeconomic
factors (like the overall economy and industry conditions) and individually specific factors (like
the financial condition and management of companies).

Fundamental analysis, which is also known as quantitative analysis, involves delving into a
company’s financial statements (such as profit and loss account and balance sheet) in order to
study various financial indicators (such as revenues, earnings, liabilities, expenses and assets).
Such analysis is usually carried out by analysts, brokers and savvy investors.

Benefits of fundamental analysis

Fundamental analysis helps in:

1. Identifying the intrinsic value of a security.

2. Identifying long-term opportunities since it involves real-time data.

Fundamental Analysis Tools

These are the most popular tools of fundamental analysis.

1. Earnings per Share – EPS

2. Price to Earnings Ratio – P/E
3. Projected Earning Growth – PEG

36 | P a g e
 4. Price to Sales – P/S
5. Price to Book – P/B
6. Dividend Payout Ratio
7. Dividend Yield
8. Book Value
9. Return on Equity

INDIAN TELECOM SECTOR

The first wind of reforms in telecommunications sector came in 1980s when the private sector
was allowed in telecommunications equipment manufacturing. In 1985, Department of
Telecommunications (DOT) was established. It was an exclusive provider of domestic and long-
distance service that would be its own regulator (separate from the postal system). In 1986,
two wholly government-owned companies were created: the Videsh Sanchar Nigam Limited
(VSNL) for international telecommunications and Mahanagar Telephone Nigam Limited (MTNL)
for service in metropolitan areas.

Telecommunication sector in India can be divided into two segments: Fixed Service
Provider (FSPs), and Cellular Services. Fixed line services consist of basic services, national or
domestic long distance and international long distance services. The state operators (BSNL and
MTNL), account for almost 90 per cent of revenues from basic services.

Cellular services can be further divided into two categories: Global System for Mobile
Communications (GSM) and Code Division Multiple Access (CDMA). The GSM sector is
dominated by Airtel, Vodafone-Hutch, and Idea Cellular, while the CDMA sector is dominated
by Reliance and Tata Indicom. Opening up of international and domestic long distance
telephony services are the major growth drivers for cellular industry. Cellular operators get
substantial revenue from these services, and compensate them for reduction in tariffs on

37 | P a g e
airtime, which along with rental was the main source of revenue. The reduction in tariffs for
airtime, national long distance, international long distance, and handset prices has driven
demand.

FUTURE GROWTH PROSPECTUS OF TELECOM SECTOR IN INDIA

Market shares of Major Public and Private Players

Both fixed line and mobile segments serve the basic needs of local calls, long distance calls and
the international calls, with the provision of broadband services in the fixed line segment and
GPRS in the mobile arena. Traditional telephones have been replaced by the codeless and the
wireless instruments. Mobile phone providers have also come up with GPRS-enabled
multimedia messaging, Internet surfing, and mobile-commerce.

The much-awaited 3G mobile technology is soon going to enter the Indian telecom market. The
GSM, CDMA, WLL service providers are all upgrading them to provide 3G mobile services.
Along with improvement in telecom services, there is also an improvement in manufacturing. In
the beginning, there were only the Siemens handsets in India but now a whole series of new
handsets, such as Nokia's latest N-series, Sony Ericsson's W-series, Motorola's PDA phones,
Micromax etc. have come up. Touch screen and advanced technological handsets are gaining
popularity. Radio services have also been incorporated in the mobile handsets, along with other
applications like high storage memory, multimedia applications, multimedia games, MP3
Players, video generators, Camera's, etc. The value added services provided by the mobile
service operators contribute more than 10% of the total revenue.

Growth remained robust in the GSM mobile space, with the same growing its subscriber base
by 96 m, thus contributing to about 70% of the total incremental subscriber addition for the
entire Indian telecom market. After a strong 76% YoY increase in subscriptions during FY08, the
GSM industry recorded another good performance during FY08, growing subscriber base by
50% YoY to about 289 m.

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Increasing choice and one of the lowest tariffs in the world have made the cellular services in
India an attractive proposition for the average consumer. The segment’s subscriber base has
grown by over 50% YoY in FY09. Policy measures like lowering of taxes on the cellular industry
and benefits of enhanced FDI limits shall further the prospects of the cellular industry

The leading cellular service providers have the following number of subscribers as in FY 09:

Service Provider No. of CDMA Subscribers No. of GSM Subscribers

Reliance 2.75 crores 38.76 lakhs

Tata 1.07 crores

Airtel 3.37 crores

MTNL 24.98 lakhs

BSNL 2.44 crores

Hutch 2.44 crores

Idea 1.3 crores

Spice 25.56 lakhs

BPL 10.62 lakhs

Aircel 48 lakhs

SOURCE:www.trai.gov.in

39 | P a g e
Bharti Airtel has the largest customer base with 31% market share, followed by Hutch and BSNL
with each holding 22% market share.

Changing Scenario

The Indian telecommunications has been zooming up the growth curve at a feverish pace,
emerging as one of the key sectors responsible for India's resurgent economic growth. India is
set to surpass US to become the second largest wireless network in the world with a subscriber
base of over 300 million by April, according to the Telecom Regulatory Authority of India (Trai).
The month of April 2009 saw India’ wireless subscriber base that currently stands at 250.93
million surpassing that of the US to become the second wireless network in the world.

The year 2008 saw India achieving significant distinctions: having the world's lowest call rates
(2-3 US cents), the fastest growth in the number of subscribers (15.31 million in 4 months), the
fastest sale of million mobile phones (in a week), the world's cheapest mobile handset (US$
17.2) and the world's most affordable color phone (US$ 27.42) and largest sale of mobile
handsets (in the third quarter).

Segment-wise growth

Wireless segment has emerged as the preferred mode of telephone service by the consumers,
reflected in the rising share of mobile phone connections to total connections. The share of
mobile phones has increased from 71.69 per cent at the end of March 2007 to 87.29 per cent at
the end of April 2009. While total mobile subscriber base was 269.3 million, wire line subscriber
base was 39.21 million. Consequently, overall tele-density has increased to 26.89 per cent at
the end of April 2009.

In fact, since 1999, mobile subscriber base has been growing at a CAGR of around 85 per cent.
And, while about 8 million new subscribers are being added every month in mobile segment,
there has been a decline in the total number of wire line subscribers.

40 | P a g e
Also, private sector has become the dominant player in the industry. While public sector
companies added 53.6 million subscribers during 1998-2008, private companies have added a
whopping 133.58 million subscribers during the same period.

The dominance has been much more pronounced in the mobile market, where private
operators have added 124.68 million subscribers, while public sector operators added only
31.79 million subscribers.

Investment Growth

The booming domestic telecom market has been attracting accelerating amount of investment.
In fact, the surge in mobile services market is likely to see investment worth about US$ 24
billion by 2010, going by industry estimates owing to the growing number of mobile subscribers
which is estimated to increase to 60 billion by 2012, according to Standard Chartered Bank,
implying a mobile in the hands of every second person in the country.

The cumulative FDI inflows from April 2000 to December 2008 have been US$ 3.62 billion,
accounting for 7.99 per cent of the total FDI inflows into the country. In fact, the surge in
mobile services market is likely to see investment worth about US$ 24 billion by 2010, going by
industry estimates. This is understandable, when seen that the number of mobile subscribers is
estimated to increase to 60 billion by 2012, according to Standard Chartered Bank, implying a
mobile in the hands of every second person in the country.

Buoyed by the rapid surge in the subscriber base, huge investments are being made into this
industry.

 Maxis Communications-owned mobile service provider Aircel is planning to invest close

to US$ 5 billion over the next four years in India for network enhancement and
expansion.
 Srei Group's Quippo Telecom Infrastructure Ltd (QTIL) plans to invest US$ 3 billion in
2008-09 to ramp up its telecom infrastructure business to grow both organically and
inorganically.
41 | P a g e
  The Central public sector enterprises (CPSEs) have lined up investments of US$ 35.09
billion in infrastructure sectors like telecom energy and power for 2008-09.
 Vodafone Essar will invest US$ 6 billion over the next three years in a bid to increase its
mobile subscriber base from 40 million at present to over 100 million.


Key players in Indian Telecom Industry

Bharti Airtel

Business profile

Established in 1995 by Sunil Mittal as a Public Limited Company, Airtel is the largest telecom
service provider in Indian telecom sector. With market capitalization of over Rs. 1,360 billion,
Airtel has 31% of total market share of GSM service providers. Providing GSM services in all the
23 circles, Airtel was the first private player in telecom sector to connect all states of India. Also,
Airtel is the first mobile service provider to introduce the lifetime prepaid services and
electronic recharge systems.After establishing itself in the domestic market, Airtel is now
spreading its wings in US by providing its mobile service under the name 'CALLHOME' to the
NRIs.

Bharti Airtel is one of India's leading private sector providers of telecommunications services
based on an aggregate of 64,268,047 customers as on March 31, 2008, consisting of 61,984,721
GSM mobile and 2,283,326 Bharti Telemedia subscribers.

42 | P a g e
The businesses at Bharti Airtel have been structured into three individual strategic business
units (SBU’s) - mobile services, telemedia services (ATS) & enterprise services. The mobile
services group provides GSM mobile services across India in 23 telecom circles, while the ATS
business group provides broadband & telephone services in 94 cities. The enterprise services
group has two sub-units - carriers (long distance services) and services to corporate. All these
services are provided under the Airtel brand.

The 700-million strong rural markets in India is the biggest single market in the world and Airtel
is rapidly expanding its footprint in the rural areas of the country. It has already connected over
3.2-lakh villages and plans to reach 5 lakh by 2010.

This rapid roll out is witnessing a large number of customers joining Airtel’s network from the
rural areas of the country.

Company shares are listed on The Stock Exchange, Mumbai (BSE) and The National Stock
Exchange of India Limited (NSE).

RECENT NEWS

- Economic Times ‘Company of the year 2007’ award for corporate excellence.

- Outlook Money-NDTV Profit award in the Best Value Creator category in October

- Ranked 3rd globally for best returns to the shareholders by the Business Week Magazine

in ‘The Infotech 100’ list in July 2007

- Airtel was chosen as the second most trusted service brand in India in the

Prestigious ‘Most Trusted Brands 2007 Survey’ conducted by the Economic Times

Brand Equity.

43 | P a g e
-Bharti Airtel has won the CNBC-TV18 India Business Leader Award for the Outstanding
Company of the year, 2007

Sunil Bharti Mittal, Chairman & Group CEO

- GSM Association Chairman’s Award 2008

- Chosen for Padma Bhushan Awards in 2007

Bharti Airtel, the country’s largest telecommunication company, won 3G spectrum in 13 circles.
Of these, it ranks first in seven circles and second in four circles.

Reliance Communications

Business Profile

Established in 2002, Reliance communication is the wholly owned subsidiary of Anil Dhirubhai
Ambani Group of Companies providing the telecommunication services.
Reliance offers prepaid and postpaid mobile services with R-world and fixed line services with
broadband services. Having its operations in 673 cities, Reliance Communications offers a wide
range of telephony services. The company's business line varies from providing Fixed Line
Telephony services to wireless mobile telephony services.

Reliance is the only telecom company that is providing mobile services over both- CDMA and
GSM networks. With an optical fiber network of 80,000 kms, the company aims at providing
best services to its customers. It also has 15,000 Base Transceiver Stations across the country

44 | P a g e
providing reliable wireless network, it is India’s leading integrated telecommunication company
with over 48 million customers.

Reliance Mobile (formerly Reliance India Mobile), launched on 28 December 2002, coinciding
with the joyous occasion of the late Dhirubhai Ambani’s 70th birthday, was among the initial
initiatives of Reliance Communications. It marked the auspicious beginning of Dhirubhai’s
dream of ushering in a digital revolution in India. Today, they can proudly claim that we were
instrumental in harnessing the true power of information and communication, by bestowing it
in the hands of the common man at affordable rates.

Recent developments

-Reliance Globalcom acquires U.K. based Global Managed Network Services provider VANCO
Group Limited

Data presentation

Bharti airtel

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Annual results in brief (Rs crore)

Mar ' 09 Mar ' 08 Mar ' 07

Sales 25,703.51 17,794.43 11,228.68

Operating profit 10,501.03 7,116.95 3,881.83

Interest 483.71 255.84 225.60

Gross profit 10,253.18 6,954.67 3,718.13

EPS (Rs) 32.90 21.27 10.62

Annual results in details (Rs crore)

Mar ' 09 Mar ' 08 Mar ' 07

Other income 235.86 93.56 61.90

Stock adjustment - - -

Raw material - - -

Power and fuel - - -

Employee expenses 1,366.64 1,148.98 788.16

Excise - - -

Admin and selling expenses 3,727.86 - -

Research and development

- - -
expenses

Expenses capitalized - - -

Other expenses 10,107.98 9,528.50 6,558.69

Provisions made - - -

Depreciation 3,280.63 2,353.30 1,432.35

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 Taxation 728.35 568.15 273.71

Net profit / loss 6,244.20 4,033.22 2,012.07

Extra ordinary item - - -

Prior year adjustments - - -

Equity capital 1,897.91 1,895.93 1,893.88

Equity dividend rate - - -

Agg.of non-prom. shares (Lacs) 6475.58 7402.88 10325.93

Agg.of non promoter Holding (%) 34.12 39.04 54.52

OPM (%) 40.85 40.00 34.57

GPM (%) 39.53 38.88 32.93

NPM (%) 24.07 22.55 17.82

Balance sheet
Mar ' 09 Mar ' 08 Mar ' 07

Sources of funds

Owner's fund

Equity share capital 1,897.91 1,895.93 1,893.88

Share application money 57.63 30.00 12.13

Preference share capital - - -

Reserves & surplus 18,283.82 9,515.21 5,437.42

Loan funds

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 Secured loans 52.42 266.45 2,863.37

Unsecured loans 6,517.92 5,044.36 1,932.92

Total 26,809.71 16,751.95 12,139.72

Uses of funds

Fixed assets

Gross block 28,115.65 26,509.93 17,951.74

Less : revaluation reserve 2.13 2.13 2.13

Less : accumulated depreciation 9,085.00 7,204.30 4,944.86

Net block 19,028.52 19,303.51 13,004.75

Capital work-in-progress 2,751.08 2,375.82 2,341.25

Investments 10,952.85 705.82 719.70

Net current assets

Current assets, loans & advances 8,439.38 5,406.81 3,338.88

Less : current liabilities & provisions 14,362.33 11,042.67 7,272.80

Total net current assets -5,922.95 -5,635.86 -3,933.92

Miscellaneous expenses not written 0.20 2.66 7.94

Total 26,809.71 16,751.95 12,139.72

Notes:

Book value of unquoted investments 9,379.62 580.43 476.52

Market value of quoted investments 1,574.29 125.85 243.99

Contingent liabilities 7,140.59 7,615.04 4,740.34

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 Number of equity shares outstanding
18979.07 18959.34 18938.79
(Lacs)

Ratios (Rs crore)

Mar ' 09 Mar ' 08 Mar ' 07

Per share ratios

Reported EPS (Rs) 21.27 10.62 6.53

Dividend per share - - -

Operating profit per share (Rs) 38.57 21.32 16.17

Book value (excl rev res) per share (Rs) 60.17 38.67 24.12

Book value (inclusive rev res) per share

60.18 38.68 24.13
(Rs.)

Net operating income per share (Rs) 94.45 59.45 43.93

Profitability ratios

Operating margin (%) 40.83 35.86 36.81

Gross profit margin (%) 27.69 23.14 24.29

Net profit margin (%) 22.42 17.80 14.83

Adjusted cash margin (%) 36.38 31.57 28.74

Reported return on net worth (%) 35.35 27.47 27.08

Return on long term funds (%) 30.03 21.28 20.41

Leverage ratios

Long term debt / Equity 0.43 0.61 0.98

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 Total debt/equity 0.46 0.65 1.10

Owners fund as % of total source 68.24 60.45 47.55

Fixed assets turnover ratio 0.75 0.72 0.74

Liquidity ratios

Current ratio 0.48 0.45 0.52

Quick ratio 0.47 0.44 0.48

Inventory turnover ratio 374.50 634.52 257.80

Payout ratios

Dividend payout ratio (net profit) - - -

Dividend payout ratio (cash profit) - - -

Earning retention ratio 100.00 100.00 100.00

Cash earnings retention ratio 100.00 100.00 100.00

Coverage ratios

Adjusted cash flow time total debt 0.81 1.34 2.13

Financial charges coverage ratio 26.21 17.22 9.52

Fin. charges coverage ratio (post tax) 24.13 16.08 8.54

Component ratios

Long term assets / total Assets 0.78 0.80 0.79

Bonus component in equity capital (%) 79.98 80.06 81.81

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General observation

 Sales: - Sales figures of 2009 have shown an increase by 44.45% as compared to 2008
figures and an increase by 129% as compared to 2007 figures. Overall there was
significant increase in sales and it was reflected in the figures of gross profit as well as
net profit also.
 Net profit: - The Net profit has increased by 55% as compared to 2008 figures and an
increase by 210% as compared to 2007 figures. There was constant increase in the net
profit of the company because of the performance and services offered to the
customers.
 Total debt/equity: - The figure shows that there was continuous decrease in the total
debt of the company. A low ratio will quite satisfactory from creditor’s angle and there
is a good scope for borrowing of funds according to equity capital of the company. Low
ratio may not be very much satisfactory for shareholders because the company is
sacrificing the benefits of trading on equity in this case.
 EPS :- Earnings per share in 2006 was around 6.53 times which rose to around 10.62
times in 2007 and increased to about 21.27 times in 2008 and increased to about 32.90
times in 2009. EPS is one of the criteria of measuring the performance of a company. If
earnings per share increases the possibility of a higher dividend paid by the company
increases.
 Secured and unsecured loans: - There was vast decrease in the secured loans and
significant increase in the unsecured loans. It will increase the interest burden on the
net profit of the company. It was reflected in the annual results of the company that
interest amount is increased by 90% as compared to 2008 interest figures and by 115%
as compared to 2007 figures.
 Current ratio: - current ratio has in constant position from 2006-08 but it also shows
that the liquidity position has to be improved for achieving the standard ratio i.e. 2:1.

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  Book value: - there was very good improvement in the book value of the company,
which reflects the amount remaining for each equity share at the time of winding up.

Analysis

 Interest coverage ratio :-

Net profit before interest and tax
Interest on long term liabilities

10253.18

483.71

= 21.196

 Price earnings ratio :-

Market price per equity share
EPS

= 798.7
32.90
= 24.276

 P/E ratio/Book value :-

= 24.276
60.17
= 0.403

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Reliance Communications

Annual results in brief (Rs crore)

Mar ' 08 Dec ' 07

Mar ' 09
Sales 13,416.19 11,725.26 8,584.97

Operating profit 4,882.46 4,476.60 3,276.94

Interest 445.17 232.38 162.84

Gross profit 4,447.75 4,280.87 3,149.84

EPS (Rs) 12.53 11.78 8.42

Annual results in details (Rs crore)

Mar ' 09 Mar ' 08

Other income 10.46 36.65

Stock adjustment - -

Raw material - -

Power and fuel - -

Employee expenses 858.65 684.40

Excise - -

Admin and selling expenses - 2,119.44

Research and development expenses - -

Expenses capitalized - -

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 Other expenses 7,675.08 4,444.82

Provisions made - -

Depreciation 1,843.66 1,836.12

Taxation 17.64 12.00

Net profit / loss 2,586.45 2,408.85

Extra ordinary item - -23.90

Prior year adjustments - -

Equity capital 1,032.01 1,022.31

Equity dividend rate - -

Agg.of non-prom. shares (Lacs) 6992.16 6798.04

Agg.of non promotor Holding (%) 33.88 33.25

OPM (%) 36.39 38.18

GPM (%) 33.13 36.40

NPM (%) 19.26 20.48

Balance sheet (Rs crore)

Mar ' 09

Sources of funds

Owner's fund

Equity share capital 1,022.31

Share application money -

Preference share capital -

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 Reserves & surplus 19,503.23

Loan funds

Secured loans 5,113.57

Unsecured loans 9,454.27

Total 35,093.38

Uses of funds

Fixed assets

Gross block 20,625.82

Less : revaluation reserve -

Less : accumulated depreciation 2,527.37

Net block 18,098.45

Capital work-in-progress 2,185.60

Investments 5,434.43

Net current assets

Current assets, loans & advances 20,107.04

Less : current liabilities & provisions 10,732.14

Total net current assets 9,374.90

Miscellaneous expenses not written -

Total 35,093.38

Notes:

Book value of unquoted investments 5,434.43

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 Market value of quoted investments -

Contingent liabilities 3,781.30

Number of equity shares outstanding (Lacs) 20446.15

Ratios (Rs crore)

Mar ' 09

Per share ratios

Reported EPS (Rs) 11.78

Dividend per share 0.50

Operating profit per share (Rs) 26.96

Book value (excl rev res) per share (Rs) 100.39

Book value (inclusive rev res) per share (Rs.) 100.39

Net operating income per share (Rs) 62.39

Profitability ratios

Operating margin (%) 43.21

Gross profit margin (%) 28.82

Net profit margin (%) 18.63

Adjusted cash margin (%) 32.35

Adjusted return on net worth (%) 11.43

Reported return on net worth (%) 11.73

Return on long term funds (%) 11.16

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 Leverage ratios

Long term debt / Equity 0.67

Total debt/equity 0.70

Owners fund as % of total source 58.48

Fixed assets turnover ratio 0.69

Liquidity ratios

Current ratio 1.87

Quick ratio 1.86

Inventory turnover ratio -

Payout ratios

Dividend payout ratio (net profit) 4.96

Dividend payout ratio (cash profit) 2.81

Earning retention ratio 94.91

Cash earnings retention ratio 97.15

Coverage ratios

Adjusted cash flow time total debt 3.48

Financial charges coverage ratio 12.45

Fin. charges coverage ratio (post tax) 10.30

Component ratios

Long term assets / total Assets 0.53

57 | P a g e
General observation

 Sales: - Sales figures of 2009 have shown an increase by 14.42% as compared to 2008
figures. Overall there was good stability in sales and it was reflected in the figures of
gross profit as well as net profit also.
 Net profit/loss: - The Net profit figures have improved by 7.37% as compared to 2008
figures. There was good stability in the net profit as well as sales figures of the company.
 Total debt/equity: - The figure shows that there was good stability in the total debt of
the company and there is good scope for borrowings. A low ratio will quite satisfactory
from creditor’s angle and there is a good scope for borrowing of funds as per the equity
capital of the company.
 EPS: - Earnings per share in 2007 were around 8.42 times which rose to around 11.78
times in 2008 and then improved to about 12.53 times in 2009. If earnings per share
improved then the possibility of a higher dividend paid by the company increases.
 Secured and Unsecured loans: - There was
sharp increase in the unsecured loans and the secured loans because company was new
at that time in 2008. It will increase the interest burden on the net profit of the
company. Still company maintains good EPS as well as net profit margin also.
 Current ratio: - Current ratio shows that the company has trying to maintain the current
ratio standard. Current ratio was below standard which need to increase in the current
assets of the company or decrease in the current liabilities of the company.
 Book value: - Book value of the company was in very good position. The book value
position in the ratio chart shows that the company has good amount of total assets as
compared to total liabilities. Book value reflects the amount remaining for each equity
share at the time of winding up.

Analysis

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  Interest coverage ratio :-

Net profit before interest and tax

Interest on long term liabilities

= 4447.75

445.17

= 9.991

 Price earnings ratio :-

Market price per equity share

EPS

= 500.65
12.53
= 39.956

 P/E ratio/Book value :-

= 39.956
100.39
= 0.398

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 FINDINGS AND COMPARISON WITH OTHER MAJOR
PLAYERS
Airtel Idea TTML Reliance

Sales % 44.45 140 21 14.42

Net profit or loss % 55.00 276 -60 7.37

Total debt/equity 0.46 1.95 0.094 0.70

EPS 32.90 3.96 0.66 12.53

Secured loans and 90.00 0.69 0.50 91.56

unsecured loans %

Current ratio 0.48 1.14 0.37 1.87

Book value 60.18 8.40 -1.78 100.39

Interest coverage 21.196 7.18 1.839 9.991

P/E ratio 24.276 22.234 -24.19 39.956

P/E ratio/Book value 0.403 2.646 13.589 0.398

Observation

 Sales: - Sales figures of 2009 have shown that idea communication has very good
progress in the sales during the current year, overall there was significant increase in
sales and it was reflected in the figures of gross profit as well as net profit also.
 Net profit: - The Net profit figures shown that net profit of idea communication is
definitely high than other competing companies. There was constant increase in the net
profit of the company because of the performance and services offered to the
customers.
 Total debt/equity: - The figure shows that there was high ratio of idea communication
and lowest was TTML. A low ratio will quite satisfactory from creditor’s angle and there

60 | P a g e
 is a good scope for borrowing of funds according to equity capital of the company. Low
ratio may not be very much satisfactory for shareholders because the company is
sacrificing the benefits of trading on equity in this case.
 EPS: - Earnings per share of AIRTEL and RELIANCE communication are quite satisfactory
from shareholders angel. EPS is one of the criteria of measuring the performance of a
company. If earnings per share increases the possibility of a higher dividend paid by the
company increases.
 Secured and unsecured loans: - This criterion was tested by using the interest figures of
the companies. By calculating the percentage increase and decrease in the interest
amount we get the exact position of loans figures of the companies. Loans will increase
the interest burden on the net profit of the company. It was reflected in the annual
results of the company.
 Current ratio: - current ratio has been maintained by RELIANCE and up to some extent
IDEA also. It shows that the liquidity position of the companies achieving the standard
ratio i.e. 2:1.
 Book value: - there was very good improvement in the book value of the RELIANCE and
AIRTEL communications, which reflects the amount remaining for each equity share at
the time of winding up.
 Interest coverage: - interest coverage ratio of the TTML is not at all satisfactory it
indicates that profits are just equal to interest. Ratios of other companies are quite high
it means margin for creditors and lenders are very high.
 Price to Earning ratio: - It indicates the market value of every rupee of earnings.

So taking into consideration the above ratios & various tools of fundamental analysis we can
say the following preference should be made in order.

 Idea Communication
 Bharti Airtel
 Reliance Communication
 Tata Teleservices Maharashtra Limited (TTML)

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 RECOMMENDATIONS
TO INVESTORS:-

1) On the basis of company analysis, investors can be suggested to invest in all the three
companies with exception of TTML.

2) The fundamentals of all the companies are very strong, with exception of TTML.

3) AIRTEL is the best performer out of the pack.

4) IDEA is the emerging star of the pack.

5) Due to certain new norms laid down by the government ( delay in lauch of 3G facility,
Introduction of 1ps/sec billing system, etc) , investors should wait for some time and then
invest in this sector.

RECENT DEVELOPMENTS IN THE TELECOM SECTOR THAT

CAN AFECT VALUATION
 The 3G auction payout is not expected to drag down the financial performance of the
auction winners as much as the Street had anticipated earlier.
 The success of 3G will largely depend upon how quickly telcos roll out applications on
the new technology platform in metro cities and circle A regions.
 Bharti Airtel, the country’s largest telco, won 3G spectrum in 13 circles. Of these, it
ranks first in seven circles and second in four circles. The strategy makes sense since it
would be far easier to make 3G rollouts viable in circles where operators have a
leadership of subscriber base.
 Both Bharti and RCom have raised funds abroad, while Idea largely has domestic debt.
Industry trackers say that globally, the cost of funds is about 4%, while it is 10% at the
domestic level. This means Idea may have to shell out relatively more interest cost
compared to its bigger peers. This looks even starker, given the possibility high interest
rates in future.
 For long-term sustainable operations, a project’s IRR needs to be higher than the cost of
funds. At the final bid price, IRRs would have been less than 5%, which is way lower than
cost of funds, which typically hovers around 10%. But this fear no longer exists since
62 | P a g e
 operators have decided to adopt a circle-centric strategy. On the functional side, a lot
depends upon 3G’s success in metro areas. Some analysts feel that metros may offer
IRRs of 13-15%. IRRs in circles B and C may be 8-10%.

LEARNINGS FROM THE INTERNSHIP

The major learning during my internship were as follows

1. How to invest rationally in order to meet future financial objectives and obligations
2. How does a brokerage firm acquires clients and improves business
3. Online trading and share trading on terminal by using NSE approved software
4. Investor psyche while choosing a brokerage firm

ACHIEVEMENTS DURING INTERNSHIP

During my internship, I carried on my research and also added to the company business. My
achievements are as follows

1. Provided two leads by fixing appointment with clients

2. Helped the company to get 1 Demat account
3. Provided e-mail IDs of major corporate houses in order to give corporate presentation
as a part of promotional strategy
4. Got permission from secretaries of apartments for setting canopies which was also a
part of promotional activity

CONTRIBUTION TO THE COMPANY IN TERMS OF VALUE

ADDITION
Through my study I provided an insight to the company about how an investor thinks about his
future plan and how he wants to be guided when he approaches any brokerage firm. My study
also covered the area of client psyche, i.e what are the benefits any investor expects from a
brokerage firm and how the company can increase customer satisfaction level. Also the study
analyzed the importance of different promotional campaigns and suggested ways of increasing
the company’s visibility.

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 ANNEXURES

QUESTIONNAIRE:
NAME OF THE RESPONDENT:

OCCUPATION-

1. AGE:
(a)20-25 (b)25-30 (c)30-35 (d)35-40 (e)above 40

2. MONTHLY INCOME:

(1)10000-20000 (2)20001-30000 (3)30001-40000 (4)40001-50000 (5)50001-60000 (6)60001-

70000

3. What is your immediate future financial objective?

(1)Buying a house (2) buying a car (3) children’s education (4)daughters' marriage

(5)others

4. Which investment avenue you like most?

(1)LIC (2) Mutual fund (3)shares and stocks (4)bank fixed deposit (5) national savings certificates

5. Do you think the investment will help you achieve the goal?

(1)yes (2) no (3) can’t say

6. The investment avenues you chose was done only after seeing your future objective?

(1) Yes (2) no

7. Do you think investing in shares and stocks is a wise decision?

(1) Yes (2) no

8. Have you heard about brokerage firms like Angel Broking?

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(1) Yes (2) no

9. Do you think you are ready to take more risk for getting more returns?

(1) Yes (2) no

10.Do you get anxious when the stock market fluctuates?

(1) Yes (2) no

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BIBLIOGRAPHY

1. Investment analysis and portfolio management by PRASANNA CHANDRA

2. Investments- analysis and behaviour BY MARK HIRSCHEY AND JOHN NOFSINGER
3. Investment-an introduction BY HERBERT B. MAYO
4. Investments: analysis and management BY JACK CLARK FRANCAIS
5. Investment management BY V.K. BHALLA
6. Financial decision making BY KHAN AND JAIN
7. www.google.com
8. www.investopedia.com
9. www.moneycontrol.com
10. NCFM MODULES OF NSE

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