SUMMER INTERNSHIP PROJECT WITH
AND
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A PROJECT REPORT ON
Study on Investors perception towards Equity shares in Mumbai
SUBMITTED BY NAME = SWAPNIL DILIP PUROHIT SPECIALISATION = MARKETING DIV = A, ROLL NO = 54 BATCH = 2010 - 2011 UNDER THE GUIDANCE OF PROF : SANDEEP SAWANT CORE FACULTY - MARKETING
UNIVERSITY OF MUMBAI KOHINOOR BUSINESS SCHOOL, KURLA, MUMBAI.
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DECLARATION
I, Swapnil Dilip Purohit hereby declare that the project reportentitled “ Study on investors perception towards Equity shares in Mumbai” carried out at “Edelweiss Broking Limited” is my work submitted in partial fulfillment of the requirement for degree of MASTER OF MANAGEMENT STUDIES(MMS), UNIVERSITY OF MUMBAI from KOHINOOR BUSINESS SCHOOL KURLA, MUMBAI and not submitted for award of any degree, diploma, fellowship or any similar titles or prizes.
DATE:
SIGNATURE :
PLACE: MUMBAI
STUDENTS NAME: SWAPNIL DILIP PUROHIT
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CERTIFICATE
This is to certify that the project entitled “STUDY ON INVESTORS PERCEPTION ON EQUITY SHARES IN MUMBAI” is successfully completed by “SWAPNIL DILIP PUROHIT” during the second year of her course, in partial fulfilment of the Masters Degree in Management Studies, under the University of Mumbai, through KOHINOOR BUSINESS SCHOOL, Kurla, Mumbai-400070.
Date:
Place: Mumbai PROF. SANDEEP SAWANT
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ACKNOWLEDGEMENT
No task is a single man’s effort as there are various factors, situations and people combine together to form the background for the accomplishment of any task. This project report bears the imprint of some very important people, both from my institution, Kohinoor business school as well as the Organization (Edelweiss Broking Ltd.), who are directly or indirectly related in shaping up this project. I am highly grateful and sincerely acknowledge valuable contributions imparted by these imminent people towards the completion of this project. I would like to thank sincerely my Company Guide, Mr. Anshuman Bhargava (Team manager) Edelweiss, Mumbai, for his useful guidance and inputs. I am grateful to the Organizational members of Edelweiss for their help and support throughout the project. Most importantly, I deeply want to express my profound gratitude and thankfulness to Prof. Sandeep Sawant for having faith in my endeavours and abilities. Knowledge gained from him will always inspire and encourage me to scale new heights in the future. I thank all the respondents who have given their precious time to answer my questionnaire during the survey for primary data collection.
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TABLE OF CONTENTS
SR. NO 1 2 3
CONTENT
EXECUTIVE SUMMARY RESEARCH OBJECTIVE RESEARCH METHODOLOGY
? Research approach ? Research design ? Sampling units ? Sampling design ? Sampling techniques ? Sampling size
PAGE. NO 8 10 12
12 13 13 14 14 14 15
? Data collection
4 5 6
LIMITATIONS OF STUDY COMPANY PROFILE INTRODUCTION TO TOPIC
? What is equity share ? Indian equity market
16 17 31
31 33 36
? Impact of recession on Indian market
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ANALYSIS AND FINDINGS ?
Things to be known about investor before meeting
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? Investors perception towards equity according to income levels and caste
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? Ratio of equity share investors in general 44 investors ? Total portion of income invested for investments out of 100 ? Purpose of investment for equity share investors ? Factors considered before investing in equity shares ? Period of investment ? Monitoring of investment ? Services expected from broker ? Other findings (script) 51 52 54 55 49 48 46
8 9 10
CONCLUSION ANNEXURE REFERENCES
56 58 61
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1 EXECUTIVE SUMMARY
Edelweiss Capital is a financial services company based in Mumbai, India. Edelweiss Capital Limited provides investment banking, institutional equities, private client broking, asset management, wealth management, insurance broking and wholesale financing services to corporate, institutional and high net worth individual clients. It operates from 43 other offices in 19 Indian cities. Since its commencement of business in 1996, it has grown into a diversified Indian financial services company organized under agency and capital business lines operated by the Company and its thirteen subsidiaries. The project is a comprehensive study of Investors perception towards Equity Shares. It talks about various perception people have about Equity shares in Mumbai. As Mumbai is a metropolitan city we get people from all caste, creed, religion, etc as a result the responses we got were quite varied. Also people from same caste, creed and religion differ in their educational background and income levels to a very large extent. This factor creates various perceptions. Also perception depends on experiences of some in share market (positive or negative) The project will also focus on the strength of the company and at the same time try to identify the weaknesses so that it can be overcome. A comparative analysis of Edelweiss in relation to other broking firms has also been done.
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As an intern I talked with clients and other people to know how they think when it comes to investing in equity shares and then try to find out why particular thought process is.
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2 RESEARCH OBJECTIVE
? To know the thought process before investing in equity shares ? To categories various perceptions ? To know the opportunities and challenges
The project titled “Study on Investor’s Perception towards Equity share in Mumbai” being carried out for Edelweiss Broking Limited, Mumbai. The evaluation of financial planning has been increased through decades, which is best seen from customer point of view. Now a day’s investment of saving has assumed great importance. People are more inclined towards making investment throughout their savings as they are aware of market volatility. As far as research methodology is concerned, a sample of 100 respondents has taken and method of sampling used is Non probability sampling. It is assumed that data collected are fresh i.e. primary Data. It is assumed that all data collected are unbiased. The main objective of this project is to make the people aware about Equity share and know their perception towards Equity share According to the study of the markets, it is being observed that there are lots of financial instruments available in the markets and as far as Equity share is concerned, My responsibility as a Management Trainee is to make people aware about equity shares and know their thought process when it comes to investing in it. In this project the great emphasis is given to the investor’s mind in respect to investment in Equity share where not only he can maximize his wealth but also go for Tax Saving Scheme.
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I hope Edelweiss broking limited, Mumbai will recognize this as well as take more references from this project report.
The project is conducted for the following objective:-
? To determine the purpose of investment.
? To study their investment capabilities as compared to their savings.
? To gain an understanding and knowledge of investment criteria of corporate investors especially for Equity share.
? To analyze risk bearing capacity of investors.
? To understand investor’s attitude for making investment i.e. whether they will prefer to go for long term, midterm or short term period.
? To understand whether investors are monitoring their investment regularly or not.
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3 RESEARCH METHODOLOGY
? Primary Data: Was collected through questionnaires design and conducting a survey. ? Secondary Data: website was used Books, Journals, Company
RESEARCHMETHODOLOGY
Marketing Research is the systematic and objective identification, Collection, analysis dissemination and use of the purpose of improving decision making related to the identification and solution of the problem and opportunities in marketing. The data are collected using the most appropriate method, analyzed, interpreted and inferences are drawn. Finally the finding are presented in the form of a report that allows the information to be used for the purpose of the management decision – making.
3.1RESEARCH APPROACH
Qualitative as well as Quantitative approach has been used for this research. But the stress was basically on the quantitative approach.
Quantitative Approach
Quantitative data involves the generation of data in a quantitative form which can be subjected to rigorous analysis in a formal and rigid fashion.
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Qualitative Approach:
It is concerned with subjective assessment of opinions and behavior.
3.2RESEARCH DESIGN
Research Design is the pre-selection of techniques for collection and analysis of data by considering two important factors in mind:Availability of Time Purpose of Research In other words, Research Design is like a road map to researcher which tells him about each and every turning point that comes. This call for developing the most efficient plan for gathering the necessary information design a research plan, decision on the data source, research approaches, research instrument, sampling plan & contact methods . Descriptive Research is used in studying the investor’s perception towards Mutual Fund as a Research design and Cross sectional studies is done to check the authenticity of Data. Descriptive Research is those studies which are concerned with describing the characteristics of a particular individual or group.
3.3SAMPLING UNITS Sampling units consists of Investors Total of 100 units constitute the sample for study.
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3.4SAMPLING DESIGN
Sampling
is one of the most fundamental concepts underlying any research work. Most research studies attempt to make generalization or draw inferences regarding the population, based on their study of a part of the population that is the sample. The sample data enables the researcher to correctly estimate the population parameters. There are two method of sampling methods: 1. Probability Method 2. Non – Probability Method As far as study is concerned, I have used Non- Probability sampling as well as Snowball Sampling. Basically my Sample consists of Retail investors as well as corporate investors. On the basis of this sampling, I have made my project and finally come on the findings and conclusion.
3.5SAMPLING TECHNIQUE
As far as Sampling Technique is concerned, a nicely prepared Questionnaire has been filed by the Investors at the time of handling their queries. As we know most of the corporate investors don’t have sufficient time to fill up the form so it was found convenient to fill the information at the time of handling queries.
3.6SAMPLING SIZE
Sample Size --- 100 Respondents Sample Type --- Due care was taken that all the 100 respondents included in the sample were investors of some shape and size. In other
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words, Efforts were also made to include investors who had varying levels of investment frequency and invested amount.
3.7DATA COLLECTION
Data can be collected in two ways:1) Primary Data 2) Secondary Data
As study has been conducted on Investor’s perception towards EQUITY SHARE, Primary method of Data collection are used. It is assumed that all data collected are totally unbiased.
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4 LIMITATIONS OF STUDY
? Duration of project is not enough to make a conclusion on such a vast subject time constraint has become a big limitation.
? The sample size being taken for drawing a conclusion was too small to get a accurate result.
? Changing the mentality of people for investing in a particular financial product is very difficult task.
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5 COMPANY PROFILE
Edelweiss, a rare flower found in Switzerland. You will discover in our identity: A graphic flower that represents ideas. Around it, the protective arms of the letter ‘e’: We believe ideas create wealth, but values protect it. It is the practice of this core thought that has led to Edelweiss becoming one of the leading financial services company in India. Its current businesses include investment banking, securities broking, and investment management. We provide a wide range of services to corporations, institutional investors and high net-worth individuals. The core inspiring thought of ‘ideas creating wealth and values protecting it’ is translated into an approach that is led by entrepreneurship and creativity and protected by intellectual rigor, research and analysis. Edelweiss Capital Limited (ECL) was conceived as a public limited company on 11th November 1995. Now the company is one of India's fastest growing integrated investment banking companies. The Group's services include investment banking, institutional equities, private client broking, asset management, wealth management, insurance broking, wholesale financing and mutual funds. ECL has built strong corporate, institutional and investor relationships backed by a research-driven approach and a proven ability to capitalize on emerging market trends. The Company had received its certificate for commencement of business on
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16th January of the year 1996. As at March of the year 2000, ECL had acquired Cross border Investments Private Limited and it became as subsidiary. The Company obtained the Futures & Options license in the year 2001. Edelweiss Securities Limited formerly known as Rooshnil Securities Private Limited was acquired in July of the year 2002; this also converted as subsidiary of the company. In the same year of 2002, the Cross border Investments Private Limited was registered as a Non Banking Financial Company. The year 2004 witnessed the foray of the company into the businesses of commodity broking and in the year 2005 entered into insurance advisory business. ECL Finance Limited was incorporated in the year 2005 under the control of the company. During the year 2006, the company made NBFC registration of ECL Finance Limited and managed the first Qualified Institutional Placement under the new regulatory framework in India. Edelweiss Real Estate Advisors Private Limited was also incorporated in the identical year of 2006 and the Edelcap Securities and Transaction Services Private Limited which was earlier Tiffin Investments Private Limited were acquired in December of the same year 2006. The Initial Public Offering of the company was successfully issued in the year 2007 with the tune of 691.86 crore. During the year same year 2007, ECL had obtained the Clearing Member License. As of May 2008, the company had received final regulatory approval from the Securities & Exchange Board of India (SEBI) to start its mutual fund business. Edelweiss Liquid Fund & Edelweiss Liquid plus Fund was launched through its asset management company in September of the year 2008
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Edelweiss Capital is basically a financial company which provides its services in investment banking, asset management & wealth management. It also deals with stock broking. As we all know that it has finally decided to come up with a initial public offering with 8.30 million shares of face value of Rs 5, and it is following 100% book building process for it. The best part of the story is that a few big foreign investors from US, UK, Spain have already taken 34 % stake in the company before its proposed IPO. The 34% stake is basically held by GIC Singapore, greater pacific, Galleon, AmeriCorps ventures and Lehman Brothers. The price band of the stock is fixed at Rs 725 to Rs 825 each. It has already opened its subscription on November 15th.The Company is expecting to rake in Rs 608 corers at lower price band and RS 692 crores at the upper price band. Major reasons for bringing the IPO: Enhancement of margin maintenance with stock exchanges.
Establishing additional offices and acquisition of office infrastructure. Enhancing the existing technological capacity and loan prepayment. Meanwhile the investment banking major Lehman brothers has said that “Edelweiss has a unique business model, strong brand and deeply rooted in the Indian market to go after mid size clients where others reach are still poor.” In the recent times the company had a very good deal when it purchased 26 % stake in Deccan Aviation by Kingfisher. The company has announced Rs 109 crores as profit in the last fiscal with a income of 371 crores.The
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IPO has been assigned a Crisil IPO grading of 4/5 which clearly indicates a above average performance. And the latest news is that it has already been subscribed 45 times. So with all these facts we guess it is worth to invest in this IPO
Board of Directors
Mr. Rashesh Shah Rashesh Shah, Chairman of the Edelweiss Group has over 20 years of experience in public and private markets in India. Mr. Shah’s focus on innovation and his passion for growth through expansion into related/adjacent markets has been a key differentiator for Edelweiss. Mr. Shah’s relentless focus is on organization building and human capital development. Under his stewardship over a period of 15 years, Edelweiss has seamlessly grown into a fully diversified financial services company. Mr. Shah serves on the Boards of various companies as well as on the Executive Committee of the National Stock Exchange and is serving the third term as the Chairman of the Capital Markets Committee of FICCI. He has recently been appointed as Chairperson, ASSOCHAM National Council on Capital Markets. His academic qualifications include an MBA from Indian Institute of Management, Ahmedabad, a Diploma in International Trade from the Indian Institute of Foreign Trade, New Delhi and a Bachelors degree in Science from the University of Mumbai.
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Mr. Venkat Ramaswamy Executive Director and Head of Investment Banking and Co-Founder of Edelweiss. Mr. Venkat Ramaswamy has previously worked with the Spartek Emerging Opportunities Fund and ICICI, where he worked on project-based lending to large corporates, analyzing and evaluating investment decisions. He subsequently managed the Spartek Fund that focused on making equity investments in small and emerging companies. He brings significant experience and expertise on client relationships to Edelweiss. Mr. Ramaswamy holds an MBA from the University of Pittsburgh and is an Electronics Engineer.
Mr. Narendra Jhaveri
Mr. Jhaveri, on his return from U.K., after a brief stint with NCAER as Senior Economist, joined the Economics Dept. of the Reserve Bank of India in 1965. He shifted to ICICI in 1974 as Chief Economist and then moved to project finance. Mr. Jhaveri has served as an Independent Director on the Boards of several leading Indian companies besides acting as an advisor to several of them on diverse matters related to business. He also serves as the Chairman of the IMC Economic Research and Training Foundation. Over a span of his long professional career Mr. Jhaveri, apart from giving frequent lectures on subjects related to Indian Financial System, Capital Market, Economic
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Development
and
Corporate
Governance, has contributed a large number of articles in Indian Economic dailies and specialized journals. He holds a Masters Degree in Economics from Gujarat University. He has also obtained M.Sc. in Economics from the London School of Economics, specializing in public finance and with 40 years of experience.
Mr. Kunna Chinniah
Mr. Kunna Chinniah is Executive Vice President with GIC Special Investments ("GIC SI"). GIC SI is the private equity arm of the Government of Singapore Investment Corporation ("GIC"). Mr Chinniah oversees the Asian private equity business for GIC SI. Mr Chinniah began his career in 1982 as a Senior Field Engineer with Schlumberger Wireline Services in the Middle East. He joined GIC in 1989 and between 1989 and 1997, he held various positions with the Special Investments Department of GIC in the North America and Europe Divisions including the position of Regional Manager, on separate occasions, for Europe and North America, overseeing private equity investments in both regions. He was also GIC's representative in Frankfurt. He was based in Frankfurt from March 1992 to February 1995 and in San Francisco from November 1989 to April 1991 and from March 1995 to November 1997. His last position prior to his return to Singapore in November 1997 was Regional Manager, North America Division of the Special Investments Department. Mr Chinniah is a Chartered Financial Analyst. He obtained his Bachelor of Engineering
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(Electrical) degree from the National University of Singapore in 1982 and completed a Master of Business Administration in 1989 from the University of California (Berkeley). In 1997, he attended the World Bank Executive Programme conducted by Harvard University.
Mr. P.N. Venkatachalam Mr. P.N. Venkatachalam has over 40 years of experience in the banking sector in India and abroad. Mr. Venkatachalam joined the State Bank of India as a probationary officer on April 1967 and retired on March 2004 as a managing director. He served briefly as member of the Interim Pension Fund Regulatory Authority of India, New Delhi in 2004 and has served as a director on the board of Small Industries Development Bank of India. Mr. Venkatachalam is presently the Chairman of Laser Soft Infosystems Limited and a director of Khazana Jewellery Private Limited. He holds a Masters of Arts degree in Economics and is a Certified Associate from the Indian Institute of Bankers.Mr. Venkatachalam joined our Board on August 9, 2007.
Mr. Berjis Desai Mr. Berjis Desai, is an Independent Director on the Board of Directors of the Company. Mr. Desai is the Managing Partner, J. Sagar & Associates, one of India's leading law firms. He holds a Masters in Law. He is an
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Advocate and a Solicitor. He has been in practice for 30 years and has rich and varied experience in the legal field, with particular emphasis on corporate law and legislation related to Merger & Acquisition, derivatives, securities & financial laws, international business laws and international commercial arbitration. Mr. Desai is also on the Board of various listed companies as an Independent Director.
Mr. Sanjiv Misra Mr. Sanjiv Misra is a finance professional with over 25 years of Asia Pacific and global experience with organizations like Citigroup, Salomon Brothers and Goldman Sachs. Mr. Misra is currently the President of Phoenix Advisers Pte Ltd, an advisory and principal investing firm. He is also a member of the Board of Trustees of Singapore Management University (SMU), the SMU Enterprise Board, the Board of Directors of the National University Health System (NUHS), and the Investment and Audit Committee of the Ministry of Health Holdings (MOHH) of the Government of Singapore. He is also a member of the Investment (IC) Committee of SMU and Chairman of the Audit and Risk Committee of NUHS and a former member of the Board of Directors of Global Investments Ltd. Mr. Misra is a Senior Advisor with Apollo Management; he is also ChairmanAsia, and a member of the Board of Directors of Unitus Capital, a financial advisory and investment firm targeting social businesses and impact investing opportunities. Prior to joining Phoenix Advisers, Mr. Misra spent eleven years at Citigroup where he headed several key businesses. His last assignment was as the Head of the Asia Pacific Corporate Bank where
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he managed a team of over 400 bankers in the Hong Kong hub and across 16 countries in Asia Pacific. He also headed the Asia Pacific Investment Banking at Citigroup/Salomon Smith Barney. Prior to joining Salomon Brothers in 1997, Mr. Misra spent over 10 years in the Investment Banking Division at Goldman Sachs & Co in New York, Hong Kong and Singapore. During this stint he was responsible for establishing and heading the firm’s business presence in India, including the establishment of Goldman Sachs' joint ventures in India. Mr. Misra holds a Bachelor of Arts degree in economics from St Stephen’s College, Delhi University, a post-graduate diploma in management from IIM, Ahmedabad and a Master of Management from the J L Kellogg Graduate School of Management at Northwestern University, where he graduated as a member of the Beta Gamma Sigma Honors Society.
BUSINESS APPROACH
Client Focus Edelweiss is driven by the emphasis we place on building long-term relationships with our clients. We work closely with our clients to equip them with the ability to address large, fast-growing market opportunities. Our emphasis on long-term relationships also means that we have a significant ongoing involvement with almost all of the clients that we work with.
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Execution Orientation we focus obsessively on delivering high quality execution through our experienced team of professionals. Each team is led by senior personnel and is highly research and ideas driven. We place strong emphasis on confidentiality and integrity in a sensitive business environment.
Culture Edelweiss fosters a culture that is entrepreneurial and results-driven and that emphasizes teamwork and intellectual rigour. Our team is encouraged to display higher levels of initiative, drive, and hunger for learning and taking on additional responsibility.
Professional Integrity We place a strong emphasis on confidentiality, honesty and integrity in our business dealings. We expect our people to maintain high ethical standards, both in their professional and personal lives. We strive to be fair in all our dealings. We respect our competitors.
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Research Driven All our businesses are built on a research and analytics foundation. Our understanding of underlying market trends and strong analytical expertise has resulted in a demonstrated ability to identify emerging trends and themes early. We seek to provide the highest quality research and investment opinions to our clients.
Business Principles
‘Ideas create, values protect’ is how we define what Edelweiss believes in. But when we say ‘values protect’ what do we mean? Here’s a handy guide to the values and principles we will live by and live up to.
We will be a Thinking Organization. We will constantly bring ‘thought’ to everything we do. Our clients’ and our own success depends on our ability to use greater ideation and more imagination in our approach.
We will be Fair to our clients, our employees and all stake holders. We want our clients and our employees to be ‘richer’ for their relationship with us.
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We will take care of our People seriously. Our policies – in spirit and in letter – will ensure transparency and equal opportunity for all. We will go beyond the normal goals of attracting, recruiting, retaining and rewarding fine talent: We will ensure that every individual in Edelweiss has an opportunity to achieve their fullest potential.
We will operate as a Partnership, internally and externally. Though individuals are very often brilliant, we believe teamwork and collaboration will always ensure a better and more balanced organization. We will also treat our clients as partners and show them the same respect and consideration that we would toward our internal team members.
We will focus on the Long Term. Though the world will change a lot in the coming years and our assumptions for the future may not hold up, we will reflect on the long-term implications of our actions. Even when making short-term decisions we will be aware of the long-term implications.
We will focus on Growth for our clients, employees and shareholders.
Our Reputation and image is more important than any financial reward. Reputation is hard to build and even harder to rebuild. Reputation will be impacted by our ability to think for our clients, maintain confidentiality and by our adherence to our value system.
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We will Obey and Comply with the rules of the land. We will maintain the highest standard of integrity and honesty. When we are unclear we will seek clarifications.
We will respect Risk. Our business is going to be a constant challenge of balancing risk and reward. Our ability to constantly keep one eye on risk will guide us through this fine balance.
Our Financial Capital is a critical resource for growth. We will endeavour to grow, protect, and use our financial capital wisely.
EDELWEISS BROKING &FINANCE (P)LTD Member: The National Stock Exchange (NSE); Member: Bombay Stock Exchange Ltd. (BSE); Cash & Derivatives Segments Member:Calcutta Stock Exchange Association (CSE) Depository Participant: Central Depository Service (I) Ltd. (CDSL) EDELWEISS COMMODITIES (P) LTD. Member: Multi-Commodity Exchange (MCX) Member: National Commodity & Derivatives Exchange (NCDEX) Member: National Multi-Commodity Exchange of India Limited (NMCE)
Promoter Group and Intellectual Capital The EDELWEIS team comprises a diverse group of talented and experienced individuals whose expertise and guidance will enable you to
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meet your investment objectives. We owe our success to the combined efforts of our Promoters and executives, both at the senior and junior management level.
? ? ? ? ? ? ? ?
Mr. Rashesh Shah
- Founder,chairman & CEO
Mr. Vanket Ramaswami –Executive director Deepak mittal Himanshu kaji Naresh kothari Rujan panjwani Vikas khemani Ravi Bubna -CEO Edelweiss Tokio LIfeinsurance company ltd. -president and group coo -precident and head,equity capital market -president and head treasury -president and head,institutional head -president and head wholesale financing
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6 INTRODUCTION OF TOPIC
6.1What is equity share?
A Joint ownership of a property by one or more owner-investors and one or more owner-occupants. The owner-investors get the benefit of depreciation, and the owner-occupants can treat a part of their monthly mortgage payments as rent, and benefit from tax write-offs for interest and property taxes. When the property is sold, both types of owners share in the profit or loss realized from the sale. Equity is the stockholders' proportionate share (ownership interest) in the corporation's capital stock and surplus. An owner's equity in business is equal to the business's assets minus its liabilities. Equity share also called as stock market can be defined as a medium for trading of company stocks apart from securities. The range of participants in the stock market varies from small individual stock investors to large hedge fund to traders. These is to facilitate the exchange on a predetermined price. The purpose of a stock exchange is to facilitate the exchange of securities between buyers and sellers, thus providing a market place. Equity shares are another name for a share or stock that represents an ownership in a company in one its most basic forms. They become available if a company needs capital or money to operate as a business, it
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can generate the required funds by selling ownership in the company. This means that the company issues equity shares for a fair price and these shares represent ownership in the company for anyone who purchases the shares. These shares are an ownership in the company and give the owner the right to have a share in the profits of the firm. When there is no difference in the class of the share, then all the shares of the company considered as equity shares.
Equity is defined as 'the residual interest in the assets of the company after deducting all its liabilities such as long term borrowing for rising loan capital in the form of debenture either single debenture, debenture issued of series or debenture stock finance.'
An equity share is a document issued by a company which entitles the shareholder to be one of the owners of the company. One of these shares can be purchased from a stock market and by owning one you can earn a portion of its profits and even sell it to receive a capital gain. However, you also run a risk of making a capital loss if you have sold the share at a price below your buying price so be extremely careful when purchasing equity shares as there is a risk in doing so.
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The British English term for the word refers solely to the stock market and is so commonly used that is almost replaces the word stock itself.
6.2Indian Equity Market
The Indian Equity Market is also the other name for Indian share market or Indian stock market. The forces of the market depend on monsoons, global findings flowing into equities in the market and the performance of various companies. The Indian market of equities is transacted on the basis of two major stock indices, National Stock Exchange of India Ltd. (NSE) and The Bombay Stock Exchange (BSE), the trading being carried on in a dematerialized form. The physical stocks are in liquid form and cannot be sold by the investors in any market. Two types of funds are there in the Indian Equity Market; Venture Capital Funds and Private Equity Funds. The equity indexes are correlated beyond the boundaries of different countries with their exposure to common calamities like monsoon which would affect both India and Bangladesh or trade integration policies and close connection with the foreign investors. From 1995 onwards, both in terms of trade integration and FIIs India has made an advance. All these have established a close relationship between the stock market indexes of India stock market and those of other countries. The Stock derivative adds up all futures and options on all individual stocks. This stock index
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derivative was found to have gone up from 12 % of NSE derivatives turnover in 2002 to 35 % in 2004. The Indian Equity Market also comprise of the Debt Market, dominated by primary dealers, banks and wholesale investors. Indian Equity Market at present is a lucrative field for the investors and investing in Indian stocks are profitable for not only the long and mediumterm investors, but also the position traders, short-term swing traders and also very short term intra-day traders. In terms of market capitalization, there are over 2500 companies in the BSE chart list with the Reliance Industries Limited at the top. The SENSEX today has rose from 1000 levels to 8000 levels providing a profitable business to all those who had been investing in the Indian Equity Market. There are about 22 stock exchanges in India which regulates the market trends of different stocks. Generally the bigger companies are listed with the NSE and the BSE, but there is the OTCEI or the Over the Counter Exchange of India, which lists the medium and small sized companies. There is the SEBI or the Securities and Exchange Board of India which supervises the functioning of the stock markets in India.
In the Indian market scenario, the large FMCG companies reached the top line with a double-digit growth, with their shares being attractive for investing in the Indian stock market. Such companies like the Tata Tea, Britannia, to name a few, have been providing a bustling business for the Indian share market. Other leading houses offering equally beneficial
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stocks for investing in Indian Equity Market, of the SENSEX chart are the two-wheeler and three-wheeler maker Bajaj Auto and second largest software exporter Infosys Technologies. Other than some restricted industries, foreign investment in general enjoys a majority share in the Indian Equity Market. Foreign Institutional Investors (FII) need to register themselves with the SEBI and the RBI for operating in Indian stock exchanges. In fact from the Indian stock market analysis it is known that in some specific industries foreigners can have even 100% shares. In the last few years with the facility of the Online Stock Market Trading in India, it has been very convenient for the FIIs to trade in the Indian stock market. From an analysis on the Indian Equity Market it can be said that the increase in the foreign investments over the years no doubt have accentuated the dynamism of the Indian market of equities. Foreign investors are allowed to buy Indian equity for the purpose of converting the equity into ADR or GDR.
Thus, the growing financial capital markets of India being encouraged by domestic and foreign investments is becoming a profitable business more with each day. If all the economic parameters are unchanged Indian Equity Market will be conducive for the growth of private equities and this will lead to an overall improvement in the Indian economy.
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6.3 Impact of recession on Indian market
The recession in the US market and the global meltdown termed as Global recession have engulfed complete world economy with a varying degree of recessional impact. World over the impact has diversified and its impact can be observed from the very fact of falling Stock market, recession in jobs availability and companies following downsizing in the existing available staff and cutting down of the perks and salary corrections. Globally the financial sector sacking the existing base of employees in high numbers in US the major example being CITI Group same still followed by others in hospitality industry Jet and Kingfisher Airlines too. The cut in salary for the pilots being 90 % can anyone imagine such a huge cut in salary. In the globalized market scenario, the impact of recession at one place/ industry/ sector peculate down to all the linked industry and this can be truly interpreted from the current market situation which is faced by the world since approx 2 month and still the situation is not in control in spite of various measures taken to fight back the recession in the market. The badly hit sector is being the financial sector, and major issue being the "LIQUIDITY Crises" in the market. In-spite of the various measures to subsidies the impact of the recession and cut down the inflation present nothing really sound have been done.
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Various steps taken by RBI to curb the recession in the economy and counter act the prevailing situation. The sudden drying-up of capital inflows from the FDI which were invested in Indian stock markets for greater returns visualizing the Potential Higher Returns flying back is continuing to challenge liquidity management. At the heart of the current liquidity tightening is the balance of payments deficit, and this NRI deposit move should help in some small way. To curb the liquidity crises the RBI will continue to initiate liquidity measures as long as the current unusually tight domestic liquidity environment prevails. The current step to curb these being lowering of interest rates and reduction of PLR. However, the big-picture story remains unchanged – all countries in the world with current account deficits and strong credit cycles are finding it difficult to bring cost of capital down in the current environment. India is no different. New measures do not change our view on the growth outlook. Indeed, we remain concerned about the banking sector and financial sector. The BOP- Balance of Payment deficit – at a time when domestic credit demand is very high – is resulting in a vicious loop of reduced access to liquidity, slowing growth, and increased risk-aversion in the financial system. In total the recession have turned down the growth process and have set the minds of economists and others for finding out the real solution to sustain the economic growth and stability of the market which is desired for the smooth running of the economy.
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Complete business/ industry is in dolled rum situation and this situation persist for a longer duration will create the small business to vanish as they have lower stability and to run smoothly require continuous flow of liquidity which is derived from the market. In present situation down fall in one sector one day leads to a negative impact on the other sector thus all together everyone feel the impact of the Financial crises with the result of the current recession which started in US and slowly and gradually due to linked global world have impacted everyone. Solution for the problem still remain at the top of the mind of every one, still everyone facing the impact of recession but how long is the major question which is of great importance.
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7 ANALYSIS AND FINDINGS
7.1 FOLLOWING THINGS MUST BE KNOWN BEFORE MEETING CLIENT OR INVESTOR ? Investor awareness:
The policy maker may take initiative to create awareness among the investors about the nature of advertisement, stock broker service and the level of sensex prevailing in a detailed way to enable the investors to take correct decision.
? Investor education and investment decision:
The investors must possess the knowledge of the availability of the grievances measures available and the economic size of the investment that may be taken care of.
?
Impact of risk factor:
As the risk factor plays an important role in taking decision on the type of script to be selected and on the pattern of investment to be made,
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adequate attention may be paid to bring to limelight the risk factors involved in the particular script in a way understandable to the investors.
Lastly, the life style under different economic conditions may be considered by the capital issuers at the time of issue to enable the prospective investors to select this investment avenue.
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7.2 Investor’s perception towards equity shares in Mumbai, according to income levels and caste.
120% 100% 80% 60% 40% 20% 0% INCOME OVER INCOME FROM INCOME FROM INCOME FROM 10 LAKHS 7- 10 LAKHS 5 - 7 LAKHS 2- 5 LAKHS BELOW 2 LAKHS GUJRATI MARATHI OTHERS
GUJRATIS It was found through study that gujratis are very keen investors as they have financial backing and have their own business. They can bear losses. They monitor their investments daily many also do intraday trading.
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MARATHIS Marathi’s are not that much into investments as most of them do services and don’t have enough financial. They can’t afford to take risks as most of their income is spend on necessary things.
MUSLIMS During my internship I also found out that Muslim who have their own business in zaveri bazaar are huge investors.
INCOME LEVEL 1) Income over 10 lakhs (per annum) Almost all people who have income over 10lakhs invest in stock market as they have enough money and can afford loss.
2) Income from 7 – 10 lakhs (per annum) People of this income level also invest money. to get more
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3) Income from 5 – 7 lakhs (per annum) People from this income level have interest in investing but are little cautious as they have money but don’t want to risk it in unnecessary investment they prefer going to safer investment options.
4) Income from 2 – 5 lakhs (per annum) Not much people from this category goes for investing in equity as most of their incomes are spent in necessary household things and remaining goes for savings so they don’t prefer taking risk. If they do invest they go for long term investing.
5) Income below 2 lakhs (per annum) People whose income is below 2 lakhs need money as their income is not sufficient but many don’t have enough knowledge about stock market.
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7.3 Ratio of equity share investors in general investors:
Investors a) Equity share investors b) Mutual fund investors c) Insurance investors d) Bank investors e) Other investors
Respondent 41 27 10 17 5 7.3Table
Ratio of equity share investors in general investors
Other investors , 5 Bank investors , 17 Insurance investors , 10 Mutual fund investors , 27 Equity share investors, 41
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7.3Diagram
Following Patterns were observed:-
A) 41 % respondents in category equity share signify a positive trend towards growing popularity of equity share as an investment alternative.
B) 27 % respondents who are investing in MF shows that still people believe in investing their money in mutual fund
C) 17 % Respondent invest in bank as they are very conservative people and always try to invest their money in safer financial product.
D) 10% investors invest their money in insurance to protect their future and secure their life.
E) This shows that still 59% are untapped which need to be focused on as it leads to complete 100% and it really helps the equity share industry to grow at much faster pace than the way they are going on.
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7.4 Total proportion of income invested for Investment out of Rs 100.
Proportion of income A) Up to Rs 10 B) Rs 10 to Rs 20 C) Rs 20 to Rs 30 D) More than Rs 30 7.2 Table Respondent 28 27 35 10
Total proportion of income to Investment out of Rs 100.
40 35 30 25 20 15 10 5 0 Up to Rs 10 Rs 10 to Rs 20 Rs 20 to Rs 30 Up to Rs 10, 28 Rs 10 to Rs 20 , 27 Rs 20 to Rs 30 , 35 D) More than Rs 30, 10 D) More than Rs 30
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7.4Diagram
Following Patterns were observed:? 28% respondent invests up to 10% income in equity share as they don’t have enough income and cannot afford to take huge risk. ? 27% respondent invests up to 10% to 20% income in equity share. ? 35% respondent invests up to 20% to 30% income in equity share. These people are experienced people and want to earn more money. ? 10% respondent invests more than 30% income in equity share. They can afford it as they have good income and have financial backing.
? Male Respondents were much likely to invest a greater proportion of their incomes than Female’s respondents. In fact all the 10 respondents in category ‘D’ were males. ? Only 10% respondent invest their more than 30% income in equity share
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7.5 Purpose of investment for equity share Investors
Purpose A) Tax Saving B) Returns C) Only Saving D) Both Tax Saving & Returns 7.3 Table
Respondent 18 45 9 28
Purpose of investment for equity share Investors
50 45 40 35 30 25 20 15 10 5 0 tax saving return only saving both tax saving and rreturn
Purpose of investment for equity share Investors
7.5Diagram
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Following Patterns were observed:A) 48% Investors are more inclined to get better returns as they want to maximize their Wealth that is they are ready to take risk because higher the risk more the return so equity share industry should try to attract such type of investors.
B) In fact 28% people are considering both Tax Saving as well as Returns.
7.5 Factors which investors consider before making investment in Equity share
Factors a) Track record b) Brand name c) Services d) Research team 7.5 Table Respondent 9 32 46 13
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Respondent
Respondent 50 40 30 20 10 0 9 a) Track record b) Brand name c) Services 46 32 13 d)Rearch team
7.5 Diagram
Following Patterns were observed:? 46% investors consider better service before taking decision of investment. These people have little knowledge in stock market so they rely on brokers services , these people are also busy in their own work and don’t have much time to look after their investment. ? 36% investors consider brand image before taking decision of investment. As good brand represent trust and skills.
? 13% investors consider research team before taking decision of investment as market keeps on changing every time continuous research is needed to make sure money is invested in right place
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? 9% investors consider track record before taking decision of investment.
7.6 Period of investment:Time Horizon 0-1 year 1-3 year 3-5 year 7.6 Table Respondent 15% 28% 57%
Period of investment
0-1 year, 15
3-5 year, 57
1-3 year, 28
7.6 Diagram
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Following Patterns were observed:? 57% respondent wants to invest their money for 3-5 year or long time; it was observed that such kind of investors doesn’t want to take risk also. As in long term market does increase. ? 28% respondent wants to save their money for 1-3 year or mid time.
? 15% respondents want to invest their money for 0-3 year or short term; it was observed that such kind of investors take high risk and immediate income.
7.7 Monitoring of investment in equity share
eriod A) Daily B) Weekly C) Monthly D) Occasionally 7.7 Table
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Respondent 43 25 20 12
Following Patterns were observed:
? DAILY BASIS: from the questionnaire I observed that 43%
respondent monitoring their investments on daily basis they are also short term as they are looking for opportunity as soon as value rises they take out their money. ? WEEKLY BASIS: I observed that 25% of the respondent monitor their investment on weekly basis
? MONTHLY BASIS: data shows that 20% of the total respondent monitors their investment on monthly basis. ? OCCASIONALLY BASIS: study shows that only 12% respondents are not keen interested in their investment they monitor their investment occasionally. They invest their money on intention of long term basis.
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7.8
SERVICES INVESTORS EXPECT FROM THEIR RESPECTIVE BROKER ? INVESTORS WANT CLEAR INFORMATION ABOUT THEIR INVESTMENT ? PROMPT SERVICE WITH ACCURATE STUDY ON VISION TOWARDS VOLATILITY OF EQUITY MARKET. ? CONTINUOUS UPDATE ONE CLICK ACCESS TO THE WEB AND ONLINE FACILITIES ABOUT EQUITY MARKET.
? BEST MARKET ANALYSES THOSE CAN PREDICT INFORMATION ABOUT MARKET VOLATILITY. ? BETTER RESEARCH TEAM WHICH CONTINUOUS WORK ON MARKET RESEARCH. ? INVESTORS WANTS MAXIMUM SUCCESS RATIO. ? BROKER SHOULD NOT TAKE ANY TYPE OF HIDDEN CHARGES. CAN
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? TAKE MINIMUM MAINTAINANCE CHARGES. ? BROKER SHOULD HAVE EXPERIENCED FINANCIAL ADVISER.
7.9 OTHER FINDINGS The script given to us during internship for talking on the phone with clients needs some changes as the original script that was given to us did not work well. The script that was earlier given to us included the word broking, investment, advisory call etc I noticed that clients did not respond to these words well they kept the phone and did not show interest. They were hesitant to talk when they heard these words.
So I made my own script and discussed it with my sir I started getting good responses immediately, so I request Edelweiss to follow the script made by me.
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8 CONCLUSION
?
There is a great potential knowledge is rising.
in equity share as income levels and
? Since Rate of Interest on Bank deposit is falling people will be attracted towards investments in equity share because of high rate of returns.
? People of young age group are ready to take risk and they can be targeted for investment in equity share.
? Now the people are more inclined to make an investment in equity oriented schemes as they are aware of the fact that market is very volatile and they can make money through top notch equity share.
? Before investing in equity share, Investors consider more of services and brand name sectors in which assets allocation is made rather than giving due consideration to track record and research team.
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? Only few investors are ready to take high risk; maximum investors are ready to take moderate risk and some investor not ready to take risk.
? Male invest a greater proportion of their incomes than Female’s respondents.
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9 ANNEXURE
9.1 Questionnaire Project Title Study of investor’s perception towards Equity Market
Que.1) Personal details of investor: Name: Profession: Address: Contact no: Caste:Age: Gender:Email: -
Que.2) Have you made any investment? a) Yes b) No
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Que. 3) What’s your preferable area of investment? a) Equity share c) Insurance b) Mutual fund d) Bank e) Other
Que. 4) What’s your purpose of investment? a) Tax saving b) Return c) Only saving
d) Both taxes saving & return
Que.5) What will be your term of investment? a) 1-3 years b) 1-3 years c) 3-5 years
Que. 6) What is your risk appetite? a) Low b) Moderate c) High
Que. 7) What proportion of your investment contributes to equity share? a) Up to 10% c) 20-30% b) 10-20% d) More than 30
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Que. 8) What factors you consider while selecting stock broker? a) Track record team b) Brand name c) Services d) Research
Que.9) How often do you monitor your investment? a) Daily c) Monthly b) Weekly d) Occasionally
Que.10) According to you what additional services you expect from your Broker?
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10 BIBILOGRAPHY:
Online resources
1) www.google.com 2) www.moneycontrol.com 3) www.investopedia.com
Journals
1) Times of India 2) Economic Times
Magazine 1) Business today
Books 1) Investment management
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doc_773273051.docx
AND
1
A PROJECT REPORT ON
Study on Investors perception towards Equity shares in Mumbai
SUBMITTED BY NAME = SWAPNIL DILIP PUROHIT SPECIALISATION = MARKETING DIV = A, ROLL NO = 54 BATCH = 2010 - 2011 UNDER THE GUIDANCE OF PROF : SANDEEP SAWANT CORE FACULTY - MARKETING
UNIVERSITY OF MUMBAI KOHINOOR BUSINESS SCHOOL, KURLA, MUMBAI.
2
DECLARATION
I, Swapnil Dilip Purohit hereby declare that the project reportentitled “ Study on investors perception towards Equity shares in Mumbai” carried out at “Edelweiss Broking Limited” is my work submitted in partial fulfillment of the requirement for degree of MASTER OF MANAGEMENT STUDIES(MMS), UNIVERSITY OF MUMBAI from KOHINOOR BUSINESS SCHOOL KURLA, MUMBAI and not submitted for award of any degree, diploma, fellowship or any similar titles or prizes.
DATE:
SIGNATURE :
PLACE: MUMBAI
STUDENTS NAME: SWAPNIL DILIP PUROHIT
3
CERTIFICATE
This is to certify that the project entitled “STUDY ON INVESTORS PERCEPTION ON EQUITY SHARES IN MUMBAI” is successfully completed by “SWAPNIL DILIP PUROHIT” during the second year of her course, in partial fulfilment of the Masters Degree in Management Studies, under the University of Mumbai, through KOHINOOR BUSINESS SCHOOL, Kurla, Mumbai-400070.
Date:
Place: Mumbai PROF. SANDEEP SAWANT
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ACKNOWLEDGEMENT
No task is a single man’s effort as there are various factors, situations and people combine together to form the background for the accomplishment of any task. This project report bears the imprint of some very important people, both from my institution, Kohinoor business school as well as the Organization (Edelweiss Broking Ltd.), who are directly or indirectly related in shaping up this project. I am highly grateful and sincerely acknowledge valuable contributions imparted by these imminent people towards the completion of this project. I would like to thank sincerely my Company Guide, Mr. Anshuman Bhargava (Team manager) Edelweiss, Mumbai, for his useful guidance and inputs. I am grateful to the Organizational members of Edelweiss for their help and support throughout the project. Most importantly, I deeply want to express my profound gratitude and thankfulness to Prof. Sandeep Sawant for having faith in my endeavours and abilities. Knowledge gained from him will always inspire and encourage me to scale new heights in the future. I thank all the respondents who have given their precious time to answer my questionnaire during the survey for primary data collection.
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TABLE OF CONTENTS
SR. NO 1 2 3
CONTENT
EXECUTIVE SUMMARY RESEARCH OBJECTIVE RESEARCH METHODOLOGY
? Research approach ? Research design ? Sampling units ? Sampling design ? Sampling techniques ? Sampling size
PAGE. NO 8 10 12
12 13 13 14 14 14 15
? Data collection
4 5 6
LIMITATIONS OF STUDY COMPANY PROFILE INTRODUCTION TO TOPIC
? What is equity share ? Indian equity market
16 17 31
31 33 36
? Impact of recession on Indian market
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ANALYSIS AND FINDINGS ?
Things to be known about investor before meeting
6
39
39
? Investors perception towards equity according to income levels and caste
41
? Ratio of equity share investors in general 44 investors ? Total portion of income invested for investments out of 100 ? Purpose of investment for equity share investors ? Factors considered before investing in equity shares ? Period of investment ? Monitoring of investment ? Services expected from broker ? Other findings (script) 51 52 54 55 49 48 46
8 9 10
CONCLUSION ANNEXURE REFERENCES
56 58 61
7
1 EXECUTIVE SUMMARY
Edelweiss Capital is a financial services company based in Mumbai, India. Edelweiss Capital Limited provides investment banking, institutional equities, private client broking, asset management, wealth management, insurance broking and wholesale financing services to corporate, institutional and high net worth individual clients. It operates from 43 other offices in 19 Indian cities. Since its commencement of business in 1996, it has grown into a diversified Indian financial services company organized under agency and capital business lines operated by the Company and its thirteen subsidiaries. The project is a comprehensive study of Investors perception towards Equity Shares. It talks about various perception people have about Equity shares in Mumbai. As Mumbai is a metropolitan city we get people from all caste, creed, religion, etc as a result the responses we got were quite varied. Also people from same caste, creed and religion differ in their educational background and income levels to a very large extent. This factor creates various perceptions. Also perception depends on experiences of some in share market (positive or negative) The project will also focus on the strength of the company and at the same time try to identify the weaknesses so that it can be overcome. A comparative analysis of Edelweiss in relation to other broking firms has also been done.
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As an intern I talked with clients and other people to know how they think when it comes to investing in equity shares and then try to find out why particular thought process is.
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2 RESEARCH OBJECTIVE
? To know the thought process before investing in equity shares ? To categories various perceptions ? To know the opportunities and challenges
The project titled “Study on Investor’s Perception towards Equity share in Mumbai” being carried out for Edelweiss Broking Limited, Mumbai. The evaluation of financial planning has been increased through decades, which is best seen from customer point of view. Now a day’s investment of saving has assumed great importance. People are more inclined towards making investment throughout their savings as they are aware of market volatility. As far as research methodology is concerned, a sample of 100 respondents has taken and method of sampling used is Non probability sampling. It is assumed that data collected are fresh i.e. primary Data. It is assumed that all data collected are unbiased. The main objective of this project is to make the people aware about Equity share and know their perception towards Equity share According to the study of the markets, it is being observed that there are lots of financial instruments available in the markets and as far as Equity share is concerned, My responsibility as a Management Trainee is to make people aware about equity shares and know their thought process when it comes to investing in it. In this project the great emphasis is given to the investor’s mind in respect to investment in Equity share where not only he can maximize his wealth but also go for Tax Saving Scheme.
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I hope Edelweiss broking limited, Mumbai will recognize this as well as take more references from this project report.
The project is conducted for the following objective:-
? To determine the purpose of investment.
? To study their investment capabilities as compared to their savings.
? To gain an understanding and knowledge of investment criteria of corporate investors especially for Equity share.
? To analyze risk bearing capacity of investors.
? To understand investor’s attitude for making investment i.e. whether they will prefer to go for long term, midterm or short term period.
? To understand whether investors are monitoring their investment regularly or not.
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3 RESEARCH METHODOLOGY
? Primary Data: Was collected through questionnaires design and conducting a survey. ? Secondary Data: website was used Books, Journals, Company
RESEARCHMETHODOLOGY
Marketing Research is the systematic and objective identification, Collection, analysis dissemination and use of the purpose of improving decision making related to the identification and solution of the problem and opportunities in marketing. The data are collected using the most appropriate method, analyzed, interpreted and inferences are drawn. Finally the finding are presented in the form of a report that allows the information to be used for the purpose of the management decision – making.
3.1RESEARCH APPROACH
Qualitative as well as Quantitative approach has been used for this research. But the stress was basically on the quantitative approach.
Quantitative Approach
Quantitative data involves the generation of data in a quantitative form which can be subjected to rigorous analysis in a formal and rigid fashion.
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Qualitative Approach:
It is concerned with subjective assessment of opinions and behavior.
3.2RESEARCH DESIGN
Research Design is the pre-selection of techniques for collection and analysis of data by considering two important factors in mind:Availability of Time Purpose of Research In other words, Research Design is like a road map to researcher which tells him about each and every turning point that comes. This call for developing the most efficient plan for gathering the necessary information design a research plan, decision on the data source, research approaches, research instrument, sampling plan & contact methods . Descriptive Research is used in studying the investor’s perception towards Mutual Fund as a Research design and Cross sectional studies is done to check the authenticity of Data. Descriptive Research is those studies which are concerned with describing the characteristics of a particular individual or group.
3.3SAMPLING UNITS Sampling units consists of Investors Total of 100 units constitute the sample for study.
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3.4SAMPLING DESIGN
Sampling
is one of the most fundamental concepts underlying any research work. Most research studies attempt to make generalization or draw inferences regarding the population, based on their study of a part of the population that is the sample. The sample data enables the researcher to correctly estimate the population parameters. There are two method of sampling methods: 1. Probability Method 2. Non – Probability Method As far as study is concerned, I have used Non- Probability sampling as well as Snowball Sampling. Basically my Sample consists of Retail investors as well as corporate investors. On the basis of this sampling, I have made my project and finally come on the findings and conclusion.
3.5SAMPLING TECHNIQUE
As far as Sampling Technique is concerned, a nicely prepared Questionnaire has been filed by the Investors at the time of handling their queries. As we know most of the corporate investors don’t have sufficient time to fill up the form so it was found convenient to fill the information at the time of handling queries.
3.6SAMPLING SIZE
Sample Size --- 100 Respondents Sample Type --- Due care was taken that all the 100 respondents included in the sample were investors of some shape and size. In other
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words, Efforts were also made to include investors who had varying levels of investment frequency and invested amount.
3.7DATA COLLECTION
Data can be collected in two ways:1) Primary Data 2) Secondary Data
As study has been conducted on Investor’s perception towards EQUITY SHARE, Primary method of Data collection are used. It is assumed that all data collected are totally unbiased.
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4 LIMITATIONS OF STUDY
? Duration of project is not enough to make a conclusion on such a vast subject time constraint has become a big limitation.
? The sample size being taken for drawing a conclusion was too small to get a accurate result.
? Changing the mentality of people for investing in a particular financial product is very difficult task.
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5 COMPANY PROFILE
Edelweiss, a rare flower found in Switzerland. You will discover in our identity: A graphic flower that represents ideas. Around it, the protective arms of the letter ‘e’: We believe ideas create wealth, but values protect it. It is the practice of this core thought that has led to Edelweiss becoming one of the leading financial services company in India. Its current businesses include investment banking, securities broking, and investment management. We provide a wide range of services to corporations, institutional investors and high net-worth individuals. The core inspiring thought of ‘ideas creating wealth and values protecting it’ is translated into an approach that is led by entrepreneurship and creativity and protected by intellectual rigor, research and analysis. Edelweiss Capital Limited (ECL) was conceived as a public limited company on 11th November 1995. Now the company is one of India's fastest growing integrated investment banking companies. The Group's services include investment banking, institutional equities, private client broking, asset management, wealth management, insurance broking, wholesale financing and mutual funds. ECL has built strong corporate, institutional and investor relationships backed by a research-driven approach and a proven ability to capitalize on emerging market trends. The Company had received its certificate for commencement of business on
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16th January of the year 1996. As at March of the year 2000, ECL had acquired Cross border Investments Private Limited and it became as subsidiary. The Company obtained the Futures & Options license in the year 2001. Edelweiss Securities Limited formerly known as Rooshnil Securities Private Limited was acquired in July of the year 2002; this also converted as subsidiary of the company. In the same year of 2002, the Cross border Investments Private Limited was registered as a Non Banking Financial Company. The year 2004 witnessed the foray of the company into the businesses of commodity broking and in the year 2005 entered into insurance advisory business. ECL Finance Limited was incorporated in the year 2005 under the control of the company. During the year 2006, the company made NBFC registration of ECL Finance Limited and managed the first Qualified Institutional Placement under the new regulatory framework in India. Edelweiss Real Estate Advisors Private Limited was also incorporated in the identical year of 2006 and the Edelcap Securities and Transaction Services Private Limited which was earlier Tiffin Investments Private Limited were acquired in December of the same year 2006. The Initial Public Offering of the company was successfully issued in the year 2007 with the tune of 691.86 crore. During the year same year 2007, ECL had obtained the Clearing Member License. As of May 2008, the company had received final regulatory approval from the Securities & Exchange Board of India (SEBI) to start its mutual fund business. Edelweiss Liquid Fund & Edelweiss Liquid plus Fund was launched through its asset management company in September of the year 2008
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Edelweiss Capital is basically a financial company which provides its services in investment banking, asset management & wealth management. It also deals with stock broking. As we all know that it has finally decided to come up with a initial public offering with 8.30 million shares of face value of Rs 5, and it is following 100% book building process for it. The best part of the story is that a few big foreign investors from US, UK, Spain have already taken 34 % stake in the company before its proposed IPO. The 34% stake is basically held by GIC Singapore, greater pacific, Galleon, AmeriCorps ventures and Lehman Brothers. The price band of the stock is fixed at Rs 725 to Rs 825 each. It has already opened its subscription on November 15th.The Company is expecting to rake in Rs 608 corers at lower price band and RS 692 crores at the upper price band. Major reasons for bringing the IPO: Enhancement of margin maintenance with stock exchanges.
Establishing additional offices and acquisition of office infrastructure. Enhancing the existing technological capacity and loan prepayment. Meanwhile the investment banking major Lehman brothers has said that “Edelweiss has a unique business model, strong brand and deeply rooted in the Indian market to go after mid size clients where others reach are still poor.” In the recent times the company had a very good deal when it purchased 26 % stake in Deccan Aviation by Kingfisher. The company has announced Rs 109 crores as profit in the last fiscal with a income of 371 crores.The
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IPO has been assigned a Crisil IPO grading of 4/5 which clearly indicates a above average performance. And the latest news is that it has already been subscribed 45 times. So with all these facts we guess it is worth to invest in this IPO
Board of Directors
Mr. Rashesh Shah Rashesh Shah, Chairman of the Edelweiss Group has over 20 years of experience in public and private markets in India. Mr. Shah’s focus on innovation and his passion for growth through expansion into related/adjacent markets has been a key differentiator for Edelweiss. Mr. Shah’s relentless focus is on organization building and human capital development. Under his stewardship over a period of 15 years, Edelweiss has seamlessly grown into a fully diversified financial services company. Mr. Shah serves on the Boards of various companies as well as on the Executive Committee of the National Stock Exchange and is serving the third term as the Chairman of the Capital Markets Committee of FICCI. He has recently been appointed as Chairperson, ASSOCHAM National Council on Capital Markets. His academic qualifications include an MBA from Indian Institute of Management, Ahmedabad, a Diploma in International Trade from the Indian Institute of Foreign Trade, New Delhi and a Bachelors degree in Science from the University of Mumbai.
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Mr. Venkat Ramaswamy Executive Director and Head of Investment Banking and Co-Founder of Edelweiss. Mr. Venkat Ramaswamy has previously worked with the Spartek Emerging Opportunities Fund and ICICI, where he worked on project-based lending to large corporates, analyzing and evaluating investment decisions. He subsequently managed the Spartek Fund that focused on making equity investments in small and emerging companies. He brings significant experience and expertise on client relationships to Edelweiss. Mr. Ramaswamy holds an MBA from the University of Pittsburgh and is an Electronics Engineer.
Mr. Narendra Jhaveri
Mr. Jhaveri, on his return from U.K., after a brief stint with NCAER as Senior Economist, joined the Economics Dept. of the Reserve Bank of India in 1965. He shifted to ICICI in 1974 as Chief Economist and then moved to project finance. Mr. Jhaveri has served as an Independent Director on the Boards of several leading Indian companies besides acting as an advisor to several of them on diverse matters related to business. He also serves as the Chairman of the IMC Economic Research and Training Foundation. Over a span of his long professional career Mr. Jhaveri, apart from giving frequent lectures on subjects related to Indian Financial System, Capital Market, Economic
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Development
and
Corporate
Governance, has contributed a large number of articles in Indian Economic dailies and specialized journals. He holds a Masters Degree in Economics from Gujarat University. He has also obtained M.Sc. in Economics from the London School of Economics, specializing in public finance and with 40 years of experience.
Mr. Kunna Chinniah
Mr. Kunna Chinniah is Executive Vice President with GIC Special Investments ("GIC SI"). GIC SI is the private equity arm of the Government of Singapore Investment Corporation ("GIC"). Mr Chinniah oversees the Asian private equity business for GIC SI. Mr Chinniah began his career in 1982 as a Senior Field Engineer with Schlumberger Wireline Services in the Middle East. He joined GIC in 1989 and between 1989 and 1997, he held various positions with the Special Investments Department of GIC in the North America and Europe Divisions including the position of Regional Manager, on separate occasions, for Europe and North America, overseeing private equity investments in both regions. He was also GIC's representative in Frankfurt. He was based in Frankfurt from March 1992 to February 1995 and in San Francisco from November 1989 to April 1991 and from March 1995 to November 1997. His last position prior to his return to Singapore in November 1997 was Regional Manager, North America Division of the Special Investments Department. Mr Chinniah is a Chartered Financial Analyst. He obtained his Bachelor of Engineering
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(Electrical) degree from the National University of Singapore in 1982 and completed a Master of Business Administration in 1989 from the University of California (Berkeley). In 1997, he attended the World Bank Executive Programme conducted by Harvard University.
Mr. P.N. Venkatachalam Mr. P.N. Venkatachalam has over 40 years of experience in the banking sector in India and abroad. Mr. Venkatachalam joined the State Bank of India as a probationary officer on April 1967 and retired on March 2004 as a managing director. He served briefly as member of the Interim Pension Fund Regulatory Authority of India, New Delhi in 2004 and has served as a director on the board of Small Industries Development Bank of India. Mr. Venkatachalam is presently the Chairman of Laser Soft Infosystems Limited and a director of Khazana Jewellery Private Limited. He holds a Masters of Arts degree in Economics and is a Certified Associate from the Indian Institute of Bankers.Mr. Venkatachalam joined our Board on August 9, 2007.
Mr. Berjis Desai Mr. Berjis Desai, is an Independent Director on the Board of Directors of the Company. Mr. Desai is the Managing Partner, J. Sagar & Associates, one of India's leading law firms. He holds a Masters in Law. He is an
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Advocate and a Solicitor. He has been in practice for 30 years and has rich and varied experience in the legal field, with particular emphasis on corporate law and legislation related to Merger & Acquisition, derivatives, securities & financial laws, international business laws and international commercial arbitration. Mr. Desai is also on the Board of various listed companies as an Independent Director.
Mr. Sanjiv Misra Mr. Sanjiv Misra is a finance professional with over 25 years of Asia Pacific and global experience with organizations like Citigroup, Salomon Brothers and Goldman Sachs. Mr. Misra is currently the President of Phoenix Advisers Pte Ltd, an advisory and principal investing firm. He is also a member of the Board of Trustees of Singapore Management University (SMU), the SMU Enterprise Board, the Board of Directors of the National University Health System (NUHS), and the Investment and Audit Committee of the Ministry of Health Holdings (MOHH) of the Government of Singapore. He is also a member of the Investment (IC) Committee of SMU and Chairman of the Audit and Risk Committee of NUHS and a former member of the Board of Directors of Global Investments Ltd. Mr. Misra is a Senior Advisor with Apollo Management; he is also ChairmanAsia, and a member of the Board of Directors of Unitus Capital, a financial advisory and investment firm targeting social businesses and impact investing opportunities. Prior to joining Phoenix Advisers, Mr. Misra spent eleven years at Citigroup where he headed several key businesses. His last assignment was as the Head of the Asia Pacific Corporate Bank where
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he managed a team of over 400 bankers in the Hong Kong hub and across 16 countries in Asia Pacific. He also headed the Asia Pacific Investment Banking at Citigroup/Salomon Smith Barney. Prior to joining Salomon Brothers in 1997, Mr. Misra spent over 10 years in the Investment Banking Division at Goldman Sachs & Co in New York, Hong Kong and Singapore. During this stint he was responsible for establishing and heading the firm’s business presence in India, including the establishment of Goldman Sachs' joint ventures in India. Mr. Misra holds a Bachelor of Arts degree in economics from St Stephen’s College, Delhi University, a post-graduate diploma in management from IIM, Ahmedabad and a Master of Management from the J L Kellogg Graduate School of Management at Northwestern University, where he graduated as a member of the Beta Gamma Sigma Honors Society.
BUSINESS APPROACH
Client Focus Edelweiss is driven by the emphasis we place on building long-term relationships with our clients. We work closely with our clients to equip them with the ability to address large, fast-growing market opportunities. Our emphasis on long-term relationships also means that we have a significant ongoing involvement with almost all of the clients that we work with.
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Execution Orientation we focus obsessively on delivering high quality execution through our experienced team of professionals. Each team is led by senior personnel and is highly research and ideas driven. We place strong emphasis on confidentiality and integrity in a sensitive business environment.
Culture Edelweiss fosters a culture that is entrepreneurial and results-driven and that emphasizes teamwork and intellectual rigour. Our team is encouraged to display higher levels of initiative, drive, and hunger for learning and taking on additional responsibility.
Professional Integrity We place a strong emphasis on confidentiality, honesty and integrity in our business dealings. We expect our people to maintain high ethical standards, both in their professional and personal lives. We strive to be fair in all our dealings. We respect our competitors.
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Research Driven All our businesses are built on a research and analytics foundation. Our understanding of underlying market trends and strong analytical expertise has resulted in a demonstrated ability to identify emerging trends and themes early. We seek to provide the highest quality research and investment opinions to our clients.
Business Principles
‘Ideas create, values protect’ is how we define what Edelweiss believes in. But when we say ‘values protect’ what do we mean? Here’s a handy guide to the values and principles we will live by and live up to.
We will be a Thinking Organization. We will constantly bring ‘thought’ to everything we do. Our clients’ and our own success depends on our ability to use greater ideation and more imagination in our approach.
We will be Fair to our clients, our employees and all stake holders. We want our clients and our employees to be ‘richer’ for their relationship with us.
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We will take care of our People seriously. Our policies – in spirit and in letter – will ensure transparency and equal opportunity for all. We will go beyond the normal goals of attracting, recruiting, retaining and rewarding fine talent: We will ensure that every individual in Edelweiss has an opportunity to achieve their fullest potential.
We will operate as a Partnership, internally and externally. Though individuals are very often brilliant, we believe teamwork and collaboration will always ensure a better and more balanced organization. We will also treat our clients as partners and show them the same respect and consideration that we would toward our internal team members.
We will focus on the Long Term. Though the world will change a lot in the coming years and our assumptions for the future may not hold up, we will reflect on the long-term implications of our actions. Even when making short-term decisions we will be aware of the long-term implications.
We will focus on Growth for our clients, employees and shareholders.
Our Reputation and image is more important than any financial reward. Reputation is hard to build and even harder to rebuild. Reputation will be impacted by our ability to think for our clients, maintain confidentiality and by our adherence to our value system.
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We will Obey and Comply with the rules of the land. We will maintain the highest standard of integrity and honesty. When we are unclear we will seek clarifications.
We will respect Risk. Our business is going to be a constant challenge of balancing risk and reward. Our ability to constantly keep one eye on risk will guide us through this fine balance.
Our Financial Capital is a critical resource for growth. We will endeavour to grow, protect, and use our financial capital wisely.
EDELWEISS BROKING &FINANCE (P)LTD Member: The National Stock Exchange (NSE); Member: Bombay Stock Exchange Ltd. (BSE); Cash & Derivatives Segments Member:Calcutta Stock Exchange Association (CSE) Depository Participant: Central Depository Service (I) Ltd. (CDSL) EDELWEISS COMMODITIES (P) LTD. Member: Multi-Commodity Exchange (MCX) Member: National Commodity & Derivatives Exchange (NCDEX) Member: National Multi-Commodity Exchange of India Limited (NMCE)
Promoter Group and Intellectual Capital The EDELWEIS team comprises a diverse group of talented and experienced individuals whose expertise and guidance will enable you to
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meet your investment objectives. We owe our success to the combined efforts of our Promoters and executives, both at the senior and junior management level.
? ? ? ? ? ? ? ?
Mr. Rashesh Shah
- Founder,chairman & CEO
Mr. Vanket Ramaswami –Executive director Deepak mittal Himanshu kaji Naresh kothari Rujan panjwani Vikas khemani Ravi Bubna -CEO Edelweiss Tokio LIfeinsurance company ltd. -president and group coo -precident and head,equity capital market -president and head treasury -president and head,institutional head -president and head wholesale financing
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6 INTRODUCTION OF TOPIC
6.1What is equity share?
A Joint ownership of a property by one or more owner-investors and one or more owner-occupants. The owner-investors get the benefit of depreciation, and the owner-occupants can treat a part of their monthly mortgage payments as rent, and benefit from tax write-offs for interest and property taxes. When the property is sold, both types of owners share in the profit or loss realized from the sale. Equity is the stockholders' proportionate share (ownership interest) in the corporation's capital stock and surplus. An owner's equity in business is equal to the business's assets minus its liabilities. Equity share also called as stock market can be defined as a medium for trading of company stocks apart from securities. The range of participants in the stock market varies from small individual stock investors to large hedge fund to traders. These is to facilitate the exchange on a predetermined price. The purpose of a stock exchange is to facilitate the exchange of securities between buyers and sellers, thus providing a market place. Equity shares are another name for a share or stock that represents an ownership in a company in one its most basic forms. They become available if a company needs capital or money to operate as a business, it
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can generate the required funds by selling ownership in the company. This means that the company issues equity shares for a fair price and these shares represent ownership in the company for anyone who purchases the shares. These shares are an ownership in the company and give the owner the right to have a share in the profits of the firm. When there is no difference in the class of the share, then all the shares of the company considered as equity shares.
Equity is defined as 'the residual interest in the assets of the company after deducting all its liabilities such as long term borrowing for rising loan capital in the form of debenture either single debenture, debenture issued of series or debenture stock finance.'
An equity share is a document issued by a company which entitles the shareholder to be one of the owners of the company. One of these shares can be purchased from a stock market and by owning one you can earn a portion of its profits and even sell it to receive a capital gain. However, you also run a risk of making a capital loss if you have sold the share at a price below your buying price so be extremely careful when purchasing equity shares as there is a risk in doing so.
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The British English term for the word refers solely to the stock market and is so commonly used that is almost replaces the word stock itself.
6.2Indian Equity Market
The Indian Equity Market is also the other name for Indian share market or Indian stock market. The forces of the market depend on monsoons, global findings flowing into equities in the market and the performance of various companies. The Indian market of equities is transacted on the basis of two major stock indices, National Stock Exchange of India Ltd. (NSE) and The Bombay Stock Exchange (BSE), the trading being carried on in a dematerialized form. The physical stocks are in liquid form and cannot be sold by the investors in any market. Two types of funds are there in the Indian Equity Market; Venture Capital Funds and Private Equity Funds. The equity indexes are correlated beyond the boundaries of different countries with their exposure to common calamities like monsoon which would affect both India and Bangladesh or trade integration policies and close connection with the foreign investors. From 1995 onwards, both in terms of trade integration and FIIs India has made an advance. All these have established a close relationship between the stock market indexes of India stock market and those of other countries. The Stock derivative adds up all futures and options on all individual stocks. This stock index
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derivative was found to have gone up from 12 % of NSE derivatives turnover in 2002 to 35 % in 2004. The Indian Equity Market also comprise of the Debt Market, dominated by primary dealers, banks and wholesale investors. Indian Equity Market at present is a lucrative field for the investors and investing in Indian stocks are profitable for not only the long and mediumterm investors, but also the position traders, short-term swing traders and also very short term intra-day traders. In terms of market capitalization, there are over 2500 companies in the BSE chart list with the Reliance Industries Limited at the top. The SENSEX today has rose from 1000 levels to 8000 levels providing a profitable business to all those who had been investing in the Indian Equity Market. There are about 22 stock exchanges in India which regulates the market trends of different stocks. Generally the bigger companies are listed with the NSE and the BSE, but there is the OTCEI or the Over the Counter Exchange of India, which lists the medium and small sized companies. There is the SEBI or the Securities and Exchange Board of India which supervises the functioning of the stock markets in India.
In the Indian market scenario, the large FMCG companies reached the top line with a double-digit growth, with their shares being attractive for investing in the Indian stock market. Such companies like the Tata Tea, Britannia, to name a few, have been providing a bustling business for the Indian share market. Other leading houses offering equally beneficial
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stocks for investing in Indian Equity Market, of the SENSEX chart are the two-wheeler and three-wheeler maker Bajaj Auto and second largest software exporter Infosys Technologies. Other than some restricted industries, foreign investment in general enjoys a majority share in the Indian Equity Market. Foreign Institutional Investors (FII) need to register themselves with the SEBI and the RBI for operating in Indian stock exchanges. In fact from the Indian stock market analysis it is known that in some specific industries foreigners can have even 100% shares. In the last few years with the facility of the Online Stock Market Trading in India, it has been very convenient for the FIIs to trade in the Indian stock market. From an analysis on the Indian Equity Market it can be said that the increase in the foreign investments over the years no doubt have accentuated the dynamism of the Indian market of equities. Foreign investors are allowed to buy Indian equity for the purpose of converting the equity into ADR or GDR.
Thus, the growing financial capital markets of India being encouraged by domestic and foreign investments is becoming a profitable business more with each day. If all the economic parameters are unchanged Indian Equity Market will be conducive for the growth of private equities and this will lead to an overall improvement in the Indian economy.
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6.3 Impact of recession on Indian market
The recession in the US market and the global meltdown termed as Global recession have engulfed complete world economy with a varying degree of recessional impact. World over the impact has diversified and its impact can be observed from the very fact of falling Stock market, recession in jobs availability and companies following downsizing in the existing available staff and cutting down of the perks and salary corrections. Globally the financial sector sacking the existing base of employees in high numbers in US the major example being CITI Group same still followed by others in hospitality industry Jet and Kingfisher Airlines too. The cut in salary for the pilots being 90 % can anyone imagine such a huge cut in salary. In the globalized market scenario, the impact of recession at one place/ industry/ sector peculate down to all the linked industry and this can be truly interpreted from the current market situation which is faced by the world since approx 2 month and still the situation is not in control in spite of various measures taken to fight back the recession in the market. The badly hit sector is being the financial sector, and major issue being the "LIQUIDITY Crises" in the market. In-spite of the various measures to subsidies the impact of the recession and cut down the inflation present nothing really sound have been done.
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Various steps taken by RBI to curb the recession in the economy and counter act the prevailing situation. The sudden drying-up of capital inflows from the FDI which were invested in Indian stock markets for greater returns visualizing the Potential Higher Returns flying back is continuing to challenge liquidity management. At the heart of the current liquidity tightening is the balance of payments deficit, and this NRI deposit move should help in some small way. To curb the liquidity crises the RBI will continue to initiate liquidity measures as long as the current unusually tight domestic liquidity environment prevails. The current step to curb these being lowering of interest rates and reduction of PLR. However, the big-picture story remains unchanged – all countries in the world with current account deficits and strong credit cycles are finding it difficult to bring cost of capital down in the current environment. India is no different. New measures do not change our view on the growth outlook. Indeed, we remain concerned about the banking sector and financial sector. The BOP- Balance of Payment deficit – at a time when domestic credit demand is very high – is resulting in a vicious loop of reduced access to liquidity, slowing growth, and increased risk-aversion in the financial system. In total the recession have turned down the growth process and have set the minds of economists and others for finding out the real solution to sustain the economic growth and stability of the market which is desired for the smooth running of the economy.
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Complete business/ industry is in dolled rum situation and this situation persist for a longer duration will create the small business to vanish as they have lower stability and to run smoothly require continuous flow of liquidity which is derived from the market. In present situation down fall in one sector one day leads to a negative impact on the other sector thus all together everyone feel the impact of the Financial crises with the result of the current recession which started in US and slowly and gradually due to linked global world have impacted everyone. Solution for the problem still remain at the top of the mind of every one, still everyone facing the impact of recession but how long is the major question which is of great importance.
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7 ANALYSIS AND FINDINGS
7.1 FOLLOWING THINGS MUST BE KNOWN BEFORE MEETING CLIENT OR INVESTOR ? Investor awareness:
The policy maker may take initiative to create awareness among the investors about the nature of advertisement, stock broker service and the level of sensex prevailing in a detailed way to enable the investors to take correct decision.
? Investor education and investment decision:
The investors must possess the knowledge of the availability of the grievances measures available and the economic size of the investment that may be taken care of.
?
Impact of risk factor:
As the risk factor plays an important role in taking decision on the type of script to be selected and on the pattern of investment to be made,
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adequate attention may be paid to bring to limelight the risk factors involved in the particular script in a way understandable to the investors.
Lastly, the life style under different economic conditions may be considered by the capital issuers at the time of issue to enable the prospective investors to select this investment avenue.
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7.2 Investor’s perception towards equity shares in Mumbai, according to income levels and caste.
120% 100% 80% 60% 40% 20% 0% INCOME OVER INCOME FROM INCOME FROM INCOME FROM 10 LAKHS 7- 10 LAKHS 5 - 7 LAKHS 2- 5 LAKHS BELOW 2 LAKHS GUJRATI MARATHI OTHERS
GUJRATIS It was found through study that gujratis are very keen investors as they have financial backing and have their own business. They can bear losses. They monitor their investments daily many also do intraday trading.
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MARATHIS Marathi’s are not that much into investments as most of them do services and don’t have enough financial. They can’t afford to take risks as most of their income is spend on necessary things.
MUSLIMS During my internship I also found out that Muslim who have their own business in zaveri bazaar are huge investors.
INCOME LEVEL 1) Income over 10 lakhs (per annum) Almost all people who have income over 10lakhs invest in stock market as they have enough money and can afford loss.
2) Income from 7 – 10 lakhs (per annum) People of this income level also invest money. to get more
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3) Income from 5 – 7 lakhs (per annum) People from this income level have interest in investing but are little cautious as they have money but don’t want to risk it in unnecessary investment they prefer going to safer investment options.
4) Income from 2 – 5 lakhs (per annum) Not much people from this category goes for investing in equity as most of their incomes are spent in necessary household things and remaining goes for savings so they don’t prefer taking risk. If they do invest they go for long term investing.
5) Income below 2 lakhs (per annum) People whose income is below 2 lakhs need money as their income is not sufficient but many don’t have enough knowledge about stock market.
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7.3 Ratio of equity share investors in general investors:
Investors a) Equity share investors b) Mutual fund investors c) Insurance investors d) Bank investors e) Other investors
Respondent 41 27 10 17 5 7.3Table
Ratio of equity share investors in general investors
Other investors , 5 Bank investors , 17 Insurance investors , 10 Mutual fund investors , 27 Equity share investors, 41
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7.3Diagram
Following Patterns were observed:-
A) 41 % respondents in category equity share signify a positive trend towards growing popularity of equity share as an investment alternative.
B) 27 % respondents who are investing in MF shows that still people believe in investing their money in mutual fund
C) 17 % Respondent invest in bank as they are very conservative people and always try to invest their money in safer financial product.
D) 10% investors invest their money in insurance to protect their future and secure their life.
E) This shows that still 59% are untapped which need to be focused on as it leads to complete 100% and it really helps the equity share industry to grow at much faster pace than the way they are going on.
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7.4 Total proportion of income invested for Investment out of Rs 100.
Proportion of income A) Up to Rs 10 B) Rs 10 to Rs 20 C) Rs 20 to Rs 30 D) More than Rs 30 7.2 Table Respondent 28 27 35 10
Total proportion of income to Investment out of Rs 100.
40 35 30 25 20 15 10 5 0 Up to Rs 10 Rs 10 to Rs 20 Rs 20 to Rs 30 Up to Rs 10, 28 Rs 10 to Rs 20 , 27 Rs 20 to Rs 30 , 35 D) More than Rs 30, 10 D) More than Rs 30
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7.4Diagram
Following Patterns were observed:? 28% respondent invests up to 10% income in equity share as they don’t have enough income and cannot afford to take huge risk. ? 27% respondent invests up to 10% to 20% income in equity share. ? 35% respondent invests up to 20% to 30% income in equity share. These people are experienced people and want to earn more money. ? 10% respondent invests more than 30% income in equity share. They can afford it as they have good income and have financial backing.
? Male Respondents were much likely to invest a greater proportion of their incomes than Female’s respondents. In fact all the 10 respondents in category ‘D’ were males. ? Only 10% respondent invest their more than 30% income in equity share
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7.5 Purpose of investment for equity share Investors
Purpose A) Tax Saving B) Returns C) Only Saving D) Both Tax Saving & Returns 7.3 Table
Respondent 18 45 9 28
Purpose of investment for equity share Investors
50 45 40 35 30 25 20 15 10 5 0 tax saving return only saving both tax saving and rreturn
Purpose of investment for equity share Investors
7.5Diagram
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Following Patterns were observed:A) 48% Investors are more inclined to get better returns as they want to maximize their Wealth that is they are ready to take risk because higher the risk more the return so equity share industry should try to attract such type of investors.
B) In fact 28% people are considering both Tax Saving as well as Returns.
7.5 Factors which investors consider before making investment in Equity share
Factors a) Track record b) Brand name c) Services d) Research team 7.5 Table Respondent 9 32 46 13
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Respondent
Respondent 50 40 30 20 10 0 9 a) Track record b) Brand name c) Services 46 32 13 d)Rearch team
7.5 Diagram
Following Patterns were observed:? 46% investors consider better service before taking decision of investment. These people have little knowledge in stock market so they rely on brokers services , these people are also busy in their own work and don’t have much time to look after their investment. ? 36% investors consider brand image before taking decision of investment. As good brand represent trust and skills.
? 13% investors consider research team before taking decision of investment as market keeps on changing every time continuous research is needed to make sure money is invested in right place
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? 9% investors consider track record before taking decision of investment.
7.6 Period of investment:Time Horizon 0-1 year 1-3 year 3-5 year 7.6 Table Respondent 15% 28% 57%
Period of investment
0-1 year, 15
3-5 year, 57
1-3 year, 28
7.6 Diagram
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Following Patterns were observed:? 57% respondent wants to invest their money for 3-5 year or long time; it was observed that such kind of investors doesn’t want to take risk also. As in long term market does increase. ? 28% respondent wants to save their money for 1-3 year or mid time.
? 15% respondents want to invest their money for 0-3 year or short term; it was observed that such kind of investors take high risk and immediate income.
7.7 Monitoring of investment in equity share
eriod A) Daily B) Weekly C) Monthly D) Occasionally 7.7 Table52
Respondent 43 25 20 12
Following Patterns were observed:
? DAILY BASIS: from the questionnaire I observed that 43%
respondent monitoring their investments on daily basis they are also short term as they are looking for opportunity as soon as value rises they take out their money. ? WEEKLY BASIS: I observed that 25% of the respondent monitor their investment on weekly basis
? MONTHLY BASIS: data shows that 20% of the total respondent monitors their investment on monthly basis. ? OCCASIONALLY BASIS: study shows that only 12% respondents are not keen interested in their investment they monitor their investment occasionally. They invest their money on intention of long term basis.
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7.8
SERVICES INVESTORS EXPECT FROM THEIR RESPECTIVE BROKER ? INVESTORS WANT CLEAR INFORMATION ABOUT THEIR INVESTMENT ? PROMPT SERVICE WITH ACCURATE STUDY ON VISION TOWARDS VOLATILITY OF EQUITY MARKET. ? CONTINUOUS UPDATE ONE CLICK ACCESS TO THE WEB AND ONLINE FACILITIES ABOUT EQUITY MARKET.
? BEST MARKET ANALYSES THOSE CAN PREDICT INFORMATION ABOUT MARKET VOLATILITY. ? BETTER RESEARCH TEAM WHICH CONTINUOUS WORK ON MARKET RESEARCH. ? INVESTORS WANTS MAXIMUM SUCCESS RATIO. ? BROKER SHOULD NOT TAKE ANY TYPE OF HIDDEN CHARGES. CAN
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? TAKE MINIMUM MAINTAINANCE CHARGES. ? BROKER SHOULD HAVE EXPERIENCED FINANCIAL ADVISER.
7.9 OTHER FINDINGS The script given to us during internship for talking on the phone with clients needs some changes as the original script that was given to us did not work well. The script that was earlier given to us included the word broking, investment, advisory call etc I noticed that clients did not respond to these words well they kept the phone and did not show interest. They were hesitant to talk when they heard these words.
So I made my own script and discussed it with my sir I started getting good responses immediately, so I request Edelweiss to follow the script made by me.
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8 CONCLUSION
?
There is a great potential knowledge is rising.
in equity share as income levels and
? Since Rate of Interest on Bank deposit is falling people will be attracted towards investments in equity share because of high rate of returns.
? People of young age group are ready to take risk and they can be targeted for investment in equity share.
? Now the people are more inclined to make an investment in equity oriented schemes as they are aware of the fact that market is very volatile and they can make money through top notch equity share.
? Before investing in equity share, Investors consider more of services and brand name sectors in which assets allocation is made rather than giving due consideration to track record and research team.
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? Only few investors are ready to take high risk; maximum investors are ready to take moderate risk and some investor not ready to take risk.
? Male invest a greater proportion of their incomes than Female’s respondents.
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9 ANNEXURE
9.1 Questionnaire Project Title Study of investor’s perception towards Equity Market
Que.1) Personal details of investor: Name: Profession: Address: Contact no: Caste:Age: Gender:Email: -
Que.2) Have you made any investment? a) Yes b) No
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Que. 3) What’s your preferable area of investment? a) Equity share c) Insurance b) Mutual fund d) Bank e) Other
Que. 4) What’s your purpose of investment? a) Tax saving b) Return c) Only saving
d) Both taxes saving & return
Que.5) What will be your term of investment? a) 1-3 years b) 1-3 years c) 3-5 years
Que. 6) What is your risk appetite? a) Low b) Moderate c) High
Que. 7) What proportion of your investment contributes to equity share? a) Up to 10% c) 20-30% b) 10-20% d) More than 30
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Que. 8) What factors you consider while selecting stock broker? a) Track record team b) Brand name c) Services d) Research
Que.9) How often do you monitor your investment? a) Daily c) Monthly b) Weekly d) Occasionally
Que.10) According to you what additional services you expect from your Broker?
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10 BIBILOGRAPHY:
Online resources
1) www.google.com 2) www.moneycontrol.com 3) www.investopedia.com
Journals
1) Times of India 2) Economic Times
Magazine 1) Business today
Books 1) Investment management
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