This is an original project undertaken by me at ICICI Securities Limited, Chennai with a project duration of 2 months. This project work is bilaterally sound as the main aim was to market a finance product.
Transcript of "INVESTMENT OPPORTUNITIES AVAILABLE IN ICICI SECURITIES"
INVESTMENT OPPORTUNITIES AVAILABLE IN ICICI
Submitted in partial fulfillment of the requirements for the award of
Master of Business Administration
RAM.G (Reg. No. 3241319)
DEPARTMENT OF MANAGEMENT STUDIES
FACULTY OF BUSINESS ADMINISTRATION
JEPPIAAR NAGAR, RAJIV GANDHI SALAI,
CHENNAI – 600119. TAMILNADU.
(Established under Section 3 of UGC Act, 1956)
Jeppiaar Nagar, Rajiv Gandhi Salai, Chennai - 600 119
DEPARTMENT OF MANAGEMENT STUDIES
This is to certify that this Project Report is the bonafide work of Ram.G (Reg. No.
3241319) who carried out the project entitled “INVESTMENT OPPORTUNITIES
AVAILABLE IN ICICI SECURITIES” under our supervision from December 2013 to
Internal Guide External Guide
Mrs.S.JOYCE, MBA, Ph.D Mr.S.SUKUMAR
Head of the Department
Dr. S. MUTHUMANI
Submitted for Viva voce Examination held on_____________________
Internal Examiner External Examiner
Mrs.S.JOYCE, MBA, Ph.D
I RAM.G (Reg.No. 3241319) hereby declare that the Project Report entitled
“INVESTMENT OPPORTUNITIES AVAILABLE IN ICICI SECURITIES” done by me
under the guidance of Mrs.S.JOYCE, MBA, Ph.D (Internal) and Mr.S.SUKUMAR
(External) at ICICI SECURITIES Ltd., Chennai is submitted in partial fulfillment of the
requirements for the award of Master degree in Business Administration.
SIGNATURE OF THE CANDIDATE
My sincere thanks to our Honorable Founder and Chairman Col. Dr. JEPPIAAR.,
M.A., B.L., Ph.D, Chancellor, Sathyabama University, Tamil Nadu, Chennai, India for
his sincere endeavour in educating us in this premier institution.
I would like to express my deep gratitude and heartfelt thanks to our beloved Directors
Dr. Marie Johnson B.E., M.B.A.. M.Phil., Ph.D., and Dr. Mariazeena Johnson B.E.,
M.B.A., M.Phil., Ph.D., for motivating me to complete this project work.
I would like to place my graceful thanks to Dr. B. Sheela Rani, M.S. (By
Research), Ph.D., Vice Chancellor for the assistance and encouragement offered
throughout my project work period.
I express my heartfelt thanks to Dr. S. S. Rau, M.B.A., Ph.D., Registrar and
sincere thanks to Dr. K.V. Narayanan. M.E., Ph.D., Controller of Examinations,
Sathyabama University for their valuable support offered to conclude my project. I
wish to express my deep sense of gratitude to Dr. S. Muthumani Ph.D., Head of the
Department his valuable suggestions and encouragement offered throughout my
I wish to express my sincere thanks to my Internal Project Guide Mrs.S.Joyce,
MBA, Ph.D and External Project Guide Mr.S.Sukumar, Executive Sales Manager,
ICICI Securities, for their constant support at all the stages of the project work. I would
also like to thank all the Faculty Members, Department of Management Studies for their
help rendered to complete my project work in time.
The research work is undertaken on the Study of Investment opportunities with special
reference to ICICI Securities Ltd. The main objective of the research is to identify the
investment pattern of investors in ICICI Securities, particularly in Nanganallur area. The
secondary objective is to study the investment decisions of investors and to study the
difference between various investment options offered by ICICI Securities.
The research study conducted is descriptive in nature. Both primary and secondary
data are collected to meet the requirements. For collecting data a structured
questionnaire method is used as an instrument. The questionnaire consists of multiple
choices, open ended and close ended questions.
The sampling procedure followed in this study is convenient sampling, which is a non-
probability sampling and the sample size is 150.
Percentage analysis, Two-way ANOVA and Chi-Square Test were used for the
The study reveals that many investors alter their investment pattern when there are
The study found that investment objective of most of the investors’ is wealth
preservation and that most of the respondents invest daily.
The study indicated that investment in e-gold equity scheme is considered less risky.
Investments in mutual funds and F&O are considered as high risk.
The study reveals that many investors invest in the equity market with the hope of
growth of their investment in the future.
The study suggests that awareness level should be created about different investment
alternatives so that the investor may diversify his portfolio to reduce his risk.
Investment is an art provided it is well learnt. Learning to live with the anxiety of the
unknown is part of investing. Investing is not about gambling or speculation, it is about
taking reasonable risks to get steady rewards. Investment is as simple as jumping into
opportunities rather than conclusions. One can invest in capital market as it is beneficial
to him/her in three ways viz, Capital appreciation, Dividend and Bonus.
Out of the Indian population of 1.21 billion people (as on Dec 2013), only 2% are
into the capital market. The study is oriented with analyzing the investment opportunities
available in ICICI Securities. As such, the study also includes analysis of the investment
pattern of investors according to their portfolio and decisions taken by them when
making an investment.
An investment refers to the commitment of funds at present, in anticipation of
some positive rate of return in future. Today the spectrum of investment is indeed wide.
An investment is confronted with array of investment avenues. Among all investment,
investment in equity is in best high proportion. This is because the history of stock
market is booming and bursts overnight millionaires, an instant pauper.
Indian economy is doing indeed well in recent years. The study has been
undertaken to analyze the investment pattern of investors in ICICI Securities residing in
Nanganallur. The main reasons behind the study are the factors investment decision,
time horizon, frequency of investment and the risk taking ability of the investors. The
percentage of Indian investors investing in the Indian equity market is very less as
compared to foreign investors.
A financial market is a mechanism that allows people to easily buy and sell
(trade) financial securities (such as stocks and bonds), commodities (such as precious
metals or agricultural goods), and other fungible items of value at low transaction costs
and at prices that reflect the efficient market hypothesis.
Financial markets have evolved significantly over several hundred years and are
undergoing constant innovation to improve liquidity. The Indian financial market has
also grown substantially. The Indian stock markets are now amongst the best in the
world in terms of modernizations and the technology. India was among the few
countries, which was not badly affected by the contagion effects of the Asian crisis of
1997. Policy makers attribute this to the slow and cautious pace of capital account
Today–with the ‘feel good’ factor about India in the global arena rising, increased
confidence of the investors in the Indian market, Sensex looking more attractive than
ever before, foreign exchange reserves at an all-time high of more than $140 billion – is
the most vulnerable period for the regulators of the Indian financial sector, particularly
SEBI and RBI.
The financial markets can be divided into different subtypes:
1. Capital market which consists of: Stock markets, which provide financing through the
issuance of shares or common stock, and enable the subsequent trading thereof.
2. Bond market, which provide financing through the issuance of Bonds, and enable the
subsequent trading thereof.
3. Commodity markets, which facilitate the trading of commodities.
4. Money market, which provide short term debt financing and investment.
Money market has the following investment alternatives:
1. Derivatives market, which provide instruments for the management of financial
2. Futures market, which provide standardized forward contracts for trading
products at some future date.
3. Insurance market, which facilitates the redistribution of various risks.
4. Foreign exchange market, which facilitates the trading of foreign exchange.
The capital markets consist of primary markets and secondary markets. Newly
formed (issued) securities are bought or sold in primary markets. Secondary markets
allow investors to sell securities that they hold or buy existing securities.
ICICI Securities Limited amongst the leading Brokerage Houses and the value
based financial services which make it preferred service provider. As India’s fastest
growing financial services conglomerate, with deep moorings in the Indian economy for
over five decades, ICICI Group of companies have endeavored to contribute to address
the challenges posed to the community in multiple ways.
The ICICI group has following companies which include: ICICI Bank, ICICI
Prudential Life Insurance Company, ICICI Securities Limited, ICICI Securities Primary
Dealership Limited, ICICI Lombard General Insurance Company, ICICI Prudential Asset
Management Company, and ICICI Venture.
It provides prime brokerage services in the area of Equity, Commodities,
Derivatives Depository services, IPO Underwritings, Mutual Fund Distribution, insurance
product distribution, the company also provides investment management services like
Portfolio Management Services, Portfolio Advisory Services.
The study will be focusing on the investment pattern adopted by the investors,
areas of investment available to investors and how their behavior is changing. They are
now leaving behind the traditional approach of investment like fixed deposits, gold, post
office schemes, bank deposits etc.
Investors are now looking towards new diversification of their wealth by making
investment in mutual funds, capital market, derivatives, insurance, ETF(Exchange
traded funds) etc. Like most developed and developing countries Indian investors are
searching for new investment avenues.
Mutual funds have become one of the largest financial intermediaries in the
leading world economies. Every person has his/her own set of plans for savings to meet
any financial adversity in future that suddenly occurs and to be a market leader the
company has to be aware of its competitors and investors behavior as the competition
is very high.
A mutual fund is a form of collective investment that pools money from many
investors and invests their money in stocks, bonds, short-term money market
instruments, and/or other securities. In a mutual fund, the fund manager trades the
fund’s underlying securities, realizing capital gains or losses, and collects the dividend
or interest income.
The investment proceeds are then passed along to the individual investors.
Similarly there are various other investment products in the Indian Financial Market
such as fixed income securities, bond, equity shares, public deposits, commercial
paper, certificate of deposits etc. Many individuals find investments to be fascinating
because they can actively participate in the decision making process and see the
results of their choices.
Not all investment will be profitable as investors will not always
make the correct investment decision over the period of years, however one should
earn a positive return on a diversified portfolio. In addition there is a thrill from the major
success, along with the agony associated with the stock that dramatically rose after you
sold or did not buy. Both the big fish you catch and the big fish that get away can make
Investment is not a game but a serious subject that can have a major effect on
the investor’s future well being. Virtually everyone makes investment. Even if the
individual does not select specific assets such as stock, investment are still made
through participation in pension plans, and employee saving program or through
purchase of life insurance or a home. Each of these investments has a common
characteristic such as potential returns and the risk one must bear.
The future is uncertain, and one must determine how much risk he/she is willing
to bear since higher return is associated with accepting more risk. The individual should
start by specifying investment goals. Once these goals are established, the individual
should be aware of the mechanics of investing and the environment in which investment
decisions are made.
These include the processes by which securities are issued and subsequently
bought and sold, the regulations and tax laws that have been enacted by various levels
of government, and the sources of information concerning investment that are available
to the individual.
This study has been undertaken in ICICI Securities Ltd., which was incorporated
in the year 2000, offering a wide range of services including investment banking,
institutional broking, retail broking and private wealth management.
This project contains the investment opportunities available in ICICI Securities as
well as the investment pattern of investors particularly in Nanganallur area, who are the
clients of ICICI Securities Ltd., which has the largest customer base of 26 lakhs
customers all over India and provides a complete bouquet of products in equity, debt,
forex, depository, derivatives and allied services in India.
1.1 PROBLEM STATEMENT
The statement of the problem under study is to analyze the investment pattern of
investors and their investment decision on different investment alternatives provided by
ICICI. This problem tries to identify the investors’ framework of investment based on
different equity products offered by ICICI Securities Ltd.
FIG 1.1 CHART SHOWING PERFORMANCE OF DIFFERENT INVESTMENT
PORTFOLIOS AS ON JANUARY, 2014
1.2 OBJECTIVES OF THE STUDY
To study the investment pattern of investors in ICICI Securities
Ltd., particularly in Nanganallur area.
To find the most preferred investment product by the investors
of ICICI Securities.
To study about the investment decisions of investors.
To study about the different investment alternatives provided
by ICICI Securities Ltd.
1.3SCOPE OF THE STUDY
The primary market starts from broad environmental factors to the industry, which
influences the share price and finally analyzing the companies’ potentiality by
considering possible risk associated with securities for investing public.
Since the share prices of the company is empirically found to depend up to 50%
on the performance of the industry and the economy, studying those related field
provide insights for selecting different products of ICICI Securities.
The time horizon, income and risk factors play a significant role while selecting
particular product of ICICI, as it can create an opportunity for one product and may not
for the other, the analyzing impact of income and risk on investment pattern of investors
The study shows that frequency of investment, factors determining investment
decision, income level and investment objective play more significant role in deciding
the investment pattern. So analyzing the factors that affect investment pattern of
investors and other investment criteria provide more valuable insights.
Indian capital markets have been receiving global attention, especially from
sound investors, due to the improving macroeconomic fundamentals. No two investors
are alike. Their investment depends upon the risk profile, time horizon and savings
made. There is a greater scope as ICICI Securities provide tailor made portfolio for all
class of investors and traders as well.
For the world financial markets, an exposure in a regulated market has always
been the safest investment choice. Though, currently, there are concerns about
commodities in the Indian market, these can be addressed by taking a closer look at the
scenario. A comparison of the regulated and unregulated marketplace will help to
understand how risk can be avoided.
1.4LIMITATIONS OF THE STUDY
• The study is limited only to 150 investors.
• The study is limited to investors of ICICI Securities
• The study covers the respondents in Nanganallur area alone.
• Interpretations drawn in this study are based on the assumption that the
respondents have given correct information.
• The economy and industry have a wide picture so it becomes very difficult in real
time to encompass the broader views of all the investors in the given period of
• Besides the study has limitation of time, place and resources.
2.1 INDUSTRY PROFILE
Most of the trading in the Indian stock market takes place on its two stock exchanges:
the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The BSE
has been in existence since 1875. The NSE, on the other hand, was founded in 1992
and started trading in 1994.
However, both exchanges follow the same trading mechanism, trading hours,
settlement process, etc. At the last count, the BSE had about 4,700 listed firms,
whereas the rival NSE had about 1,200. Out of all the listed firms on the BSE, only
about 500 firms constitute more than 90% of its market capitalization; the rest of the
crowd consists of highly illiquid shares.
Almost all the significant firms of India are listed on both the exchanges. NSE enjoys a
dominant share in spot trading, with about 70% of the market share, as of 2009, and
almost a complete monopoly in derivatives trading, with about a 98% share in this
market, also as of 2009.
Emerging markets like India, are fast becoming engines for future growth.
Currently, only a very low percentage of the household savings of Indians are invested in
the domestic stock market, but with GDP growing at 7-8% annually and a stable financial
market, investors might see more money joining the race.
India started permitting outside investments only in the 1990s. Foreign
investments are classified into two categories: foreign direct investment (FDI) and
foreign portfolio investment (FPI). All investments, in which an investor takes part in the
day-to-day management and operations of the company, are treated as FDI, whereas
investments in shares without any control over management and operations, are treated
Trading at both the exchanges takes place through an open electronic limit order book,
in which order matching is done by the trading computer. There are no market
makers or specialists and the entire process is order-driven, which means that market
orders placed by investors are automatically matched with the best limit orders.
As a result, buyers and sellers remain anonymous. The advantage of an order
driven market is that it brings more transparency, by displaying all buy and sell orders in
the trading system.
However, in the absence of market makers, there is no guarantee that orders will
be executed. All orders in the trading system need to be placed through brokers, many
of which provide online trading facility to retail customers.
Institutional investors can also take advantage of the direct market access (DMA)
option, in which they use trading terminals provided by brokers for placing orders
directly into the stock market trading system.
SETTLEMENT CYCLE AND TRADING HOURS
Equity spot markets follow a T+2 rolling settlement. This means that any trade taking
place on Monday, gets settled by Wednesday. All trading on stock exchanges takes
place between 9:15 am and 3:30 pm, Indian Standard Time (+ 5.5 hours GMT), Monday
Delivery of shares must be made in dematerialized form, and each exchange has
its own clearing house, which assumes all settlement risk, by serving as a central
The two prominent Indian market indexes are Sensex and Nifty. Sensex is the oldest
market index for equities; it includes shares of 30 firms listed on the BSE, which
represent about 45% of the index’s free-float market capitalization. It was created in
1986 and provides time series data from April 1979, onward.
Another index is the S&P CNX Nifty; it includes 50 shares listed on the NSE,
which represent about 62% of its free-float market capitalization. It was created in 1996
and provides time series data from July 1990, onward.
The overall responsibility of development, regulation and supervision of the stock
market rests with the Securities & Exchange Board of India (SEBI), which was formed in
1992 as an independent authority. Since then, SEBI has consistently tried to lay down
market rules in line with the best market practices. It enjoys vast powers of imposing
penalties on market participants, in case of a breach.
For making portfolio investment in India, one should be registered either
as a foreign institutional investor (FII) or as one of the sub-accounts of one of the
registered FIIs. Both registrations are granted by the market regulator, SEBI. Foreign
institutional investors mainly consist of mutual funds, pension funds, endowments,
sovereign wealth funds, insurance companies, banks, asset management companies
At present, India does not allow foreign individuals to invest directly into its
stock market. However, high-net-worth individuals (those with a net worth of at least
$US50 million) can be registered as sub-accounts of an FII.
Foreign institutional investors and their sub accounts can invest directly into any of the
stocks listed on any of the stock exchanges.
Most portfolio investments consist of investment in securities in the
primary and secondary markets, including shares, debentures and warrants of
companies listed or to be listed on a recognized stock exchange in India. FIIs can also
invest in unlisted securities outside stock exchanges, subject to approval of the price by
the Reserve Bank of India.
Finally, they can invest in units of mutual funds and derivatives traded on
any stock exchange. An FII registered as a debt-only FII can invest 100% of its
investment into debt instruments. Other FIIs must invest a minimum of 70% of their
investments in equity. The balance of 30% can be invested in debt. FIIs must use
special non-resident rupee bank accounts, in order to move money in and out of India.
The balances held in such an account can be fully repatriated.
The government of India prescribes the FDI limit and different ceilings have been
prescribed for different sectors. Over a period of time, the government has been
progressively increasing the ceilings. FDI ceilings mostly fall in the range of 26-100%.
By default, the maximum limit for portfolio investment in a particular listed firm, is
decided by the FDI limit prescribed for the sector to which the firm belongs. However,
there are two additional restrictions on portfolio investment. First, the aggregate limit of
investment by all FIIs, inclusive of their sub-accounts in any particular firm, has been
fixed at 24% of the paid-up capital. However, the same can be raised up to the sector
cap, with the approval of the company’s boards and shareholders.
Secondly, investment by any single FII in any particular firm should not exceed
10% of the paid-up capital of the company. Regulations permit a separate 10% ceiling on
investment for each of the sub-accounts of an FII, in any particular firm. However, in
case of foreign corporations or individuals investing as a sub-account, the same ceiling is
only 5%. Regulations also impose limits for investment in equity-based derivatives
trading on stock exchanges.
2.2 COMPANY PROFILE
ICICI Group offers a wide range of banking products and financial
services to corporate and retail customers through a variety of delivery channels and
through its specialized group companies and subsidiaries in the areas of personal
banking, investment banking, life and general insurance, venture capital and asset
management. With a strong customer focus, the ICICI Group Companies have
maintained and enhanced their leadership positions in their respective sectors.
ICICI Bank is India’s second-largest bank with total assets of Rs.
4,736.47 billion (US$ 93 billion) at March 31, 2012 and profit after tax Rs. 64.65 billion
(US$ 1,271 million) for the year ended March 31, 2012. The Bank has a network of 2,791
branches and 10,021 ATMs in India, and has a presence in 19 countries, including India.
ICICI Prudential Life Insurance is a joint venture between ICICI
Bank, a premier financial powerhouse, and Prudential plc, a leading international
financial services group headquartered in the United Kingdom. ICICI Prudential Life was
amongst the first private sector insurance companies to begin operations in December
2000 after receiving approval from Insurance Regulatory Development Authority (IRDA).
ICICI Prudential Life’s capital stands at Rs. 47.91 billion (as of March 31, 2012) with
ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For FY 2012,
the company garnered Rs.140.22 billion of total premiums and has underwritten over 13
million policies since inception
ICICI Lombard General Insurance Company, is a joint venture
between ICICI Bank Limited, India’s second largest bank with consolidated total assets
of over USD 91 billion at March 31, 2012 and Fairfax Financial Holdings Limited, a
Canada based USD 30 billion diversified financial services company engaged in general
insurance, reinsurance, insurance claims management and investment management.
ICICI Lombard GIC Ltd. Is the largest private sector general insurance company in India.
ICICI Prudential Asset Management is the third largest mutual fund with average
asset under management of Rs. 688.16 billion and a market share (mutual fund) of
10.34% as on March 31, 2012. The Company manages a comprehensive range of
mutual fund schemes and portfolio management services to meet the varying investment
needs of its investor’s through 117 branches spread across the country.
ICICI Venture is one of the largest and most successful alternative asset
managers in India with funds under management of over US$ 2 billion. It has been a
pioneer in the Indian alternative asset industry since its establishment in 1988, having
managed several funds across various asset classes over multiple economic cycles.
ICICI Venture is a wholly owned subsidiary of ICICI Bank.
ICICI Securities Ltd is the largest integrated securities firm covering the needs of
corporate and retail customers through investment banking, institutional broking, retail
broking and financial product distribution businesses. Among the many awards that ICICI
Securities has won, the noteworthy awards for 2012 were: Asiamoney `Best Domestic
Equity House for 2012; ‘BSE IPF D&B Equity Broking Awards 2012’ under two
categories:- Best Equity Broking House – Cash Segment and Largest E-Broking House;
the Chief Learning Officer Award from World HRD Congress for Innovation in Learning
category. IDG India’s CIO magazine has recognized ICICI Securities as a recipient of
CIO 100 award in 2009, 2010, 2011 and 2012. I-Sec won this awards 4 times in a row for
which the CIO Hall of Fame award was additionally conferred in 2012.
ICICI Securities Primary Dealership Limited (‘I-Sec PD’) is the largest primary
dealer in Government Securities. It is an acknowledged leader in the Indian fixed income
and money markets, with a strong franchise across the spectrum of interest rate
products and services – institutional sales and trading, resource mobilization, portfolio
management services and research. One of the first entities to be granted primary
dealership license by RBI, I-Sec PD has made pioneering contributions since inception
to debt market development in India under discretionary portfolio management.
I-Sec PD’s leadership position and research expertise have been consistently
recognized by domestic and international agencies. In recognition of their performance in
the Fixed Income market, they have received the following awards:
“Best Domestic Bond House” in India – 2007, 2005, 2004, 2002 by Asia Money
“Best Bond House” – 2009, 2007, 2006, 2005, 2004, 2001 by Finance Asia
“Best Domestic Bond House” – 2009 by The Asset Magazine’s annual Triple A
Ranked volume leader – by Greenwich Associates in 2010 Asian Fixed-Income
Investors Study. Ranked 5th
in ‘Domestic Currency Asian Credit’ with market
share of 4.5%, Only Domestic entity to be ranked.
“Best Debt House in India” – 2012 by EUROMONEY
ICICI SECURITIES LIMITED- AN OVERVIEW
ICICI Securities Ltd is an integrated securities firm offering a wide range of services
including investment banking, institutional broking, retail broking, private wealth
management, and financial product distribution.
ICICI Securities sees its role as ‘Creating Informed Access to the Wealth of the
Nation’ for its diversified set of clients that include corporates, financial institutions, high
net-worth individuals and retail investors. Headquartered in Mumbai, ICICI Securities
operates out of 66 cities and towns in India and global offices in Singapore and New
ICICI Securities Inc., the step down wholly owned US subsidiary of the company
is a member of the Financial Industry Regulatory Authority (FINRA) / Securities Investors
Protection Corporation (SIPC). ICICI Securities Inc. activities include Dealing in
Securities and Corporate Advisory Services in the United States. ICICI Securities Inc. is
also registered with the Monetary Authority of Singapore (MAS) and operates a branch
office in Singapore.
PRODUCTS AND SERVICES
o Trading in shares: ICICIdirect.com offers various options to the investors while
trading in shares.
o Cash Trading: This is a delivery based trading system, which is generally done
with the intention of taking delivery of shares or monies.
o Margin Trading: Investors can do an intra-settlement trading up to 3 to 4 times
of their available funds, wherein they take long buy/ short sell positions in
stocks with the intention of squaring off the position within the same day
o MarginPLUS Trading: Through MarginPLUS investors can do an intra-
settlement trading up to 25 times of their available funds, wherein they take
long buy/ short sell positions in stocks with the intention of squaring off the
position within the same day settlement cycle
o CallNTrade®: CallNTrade® allows investors’ to call on a local number in their
city and trade on the telephone through Customer Service Executives of ICICI.
This facility is currently available in over 11 major states across India.
o Trading on NSE/BSE: Through ICICIdirect.com, investors’ can trade on NSE
as well as BSE.
o Market Order: Investors could trade by placing market orders during market
hours that allows them to trade at the best obtainable price in the market at the
time of execution of the order.
o Limit Order: Allows an investor to place a buy/sell order at a price defined by
him/her. The execution can happen at a price more favorable than the price,
which is defined by the investor. Limit orders can be placed by investor during
holidays & non market hours too.
o FUTURES - Through ICICIdirect.com, investors can now trade in index and
stock futures on the NSE. In futures trading, investors’ can take buy/sell
positions in index or stock(s) contracts having a longer contract period of
up to 3 months.
Trading in FUTURES is simple. If, during the course of the contract
life, the price moves in investors’ favour (i.e. rises in case investor have a buy
position or falls in case investor have a sell position), investor makes a profit.
o OPTIONS - An option is a contract, which gives the buyer the right to buy
or sell shares at a specific price, on or before a specific date. For this, the
buyer has to pay to the seller some money, which is called premium. There
is no obligation on the buyer to complete the transaction if the price is not
favorable to him.
To take the buy/sell position on index/stock options, investor has to place
certain % of order value as margin. With options trading, investor can leverage
on his/her trading limit by taking buy/sell positions much more than what he/she
could have taken in cash segment.
ICICI Direct offers a simple and convenient way to trade and hedge the currency
risk in four pair of Currencies- Dollar, Euro, Pound and Japanese Yen against
Indian Rupee. By offering the choice of trading in different asset class of
Currencies ICICI offers investors’ the opportunity to diversify their portfolio.
Since the process of selecting the right mutual fund is complex and tedious, the
experts from ICICI have researched the funds and using certain criterion have
created a choice of funds. ICICI Direct offers facilities like making a lump sum
investment, redemption, switches within same funds, setting up systematic
investment plans etc.
EXCHANGE TRADED FUNDS
Exchange Traded Funds or ETFs are securities that are traded, like individual
stocks, on an exchange. Unlike regular open-end mutual funds, ETFs can be
bought and sold throughout the trading day like any stock. Most ETFs charge
lower annual expenses than many mutual funds. As with stocks, one must pay a
brokerage to buy and sell ETF units.
Term life insurance ensures that family of the insured receives a large lump sum
amount, called the sum assured, in the unfortunate event of death of the
policyholder. By offering this benefit at extremely competitive rates, Term
insurance plans provide an opportunity to get the protection of insurance cover at
extremely affordable prices.
General Insurance products cover Health, Home, Motor and Travel, and help
protect the financial health of the investor from unforeseen events that strike close
to home. ICICI Lombard is the leading private general insurance company and
has one of the best products.
FIXED DEPOSITS & BONDS
o CORPORATE FIXED DEPOSITS: ICICI offers a range of Corporate Fixed
Deposits varying in tenures, interest rates & institutions to suit the
investment needs of the investor. The deposit schemes have been
specially chosen from high-safety options to ensure that investors’ enjoy
the twin benefits of returns and protection.
o BONDS: Bond refers to a security issued by a company, financial institution
or government which offers regular or fixed payment of interest in return on
the amount borrowed money for a certain period of time.
Thus by purchasing a bond, an investor loans money for a fixed
period of time at a predetermined interest rate. While the interest is paid to
the bond holder at regular intervals, the principal amount is repaid at a later
date, known as the maturity date.
ICICIdirect offers a wide variety of Loan Products from ICICI bank to suit
customer requirements. ICICI strives to provide best products and services
to its customers at their doorstep.
In today's busy world assessing one's tax well in advance and investing in
right tax saving products with optimum returns seems to be a difficult task.
Along with this also comes the pain of standing in long queues for filing the
tax returns timely. ICICI offers the following tax services:
Computation of taxable income and tax payable
Advice on tax optimization investments
Filing of tax return with the tax authorities
ICICIdirect.com's eLocker helps its customers with the convenience
and flexibility to store and retrieve their important documents when they
need them. They can store scanned copies of their Passport, PAN,
Agreements or even medical reports securely under their ICICI direct
account. With eLocker, they can store documents in one central secure
location and know that their documents are just a few clicks away.
Trade Racer is a trading platform which provides investors with Live
streaming quotes & Research Calls, integrated fund transfer system along
with multiple watch list facility. Power-packed with new features, Trade Racer
gives investors’ the power to identify market opportunities while enjoying the
attractive new look and feel of the trading terminal.
BOARD OF DIRECTORS
ICICI Securities Limited.
Ms. Chanda D. Kochhar, Chairperson
Mr. Uday Chitale
Mr. Narendra Murkumbi
Ms. Zarin Daruwala
Mr. Anup Bagchi, Managing Director & CEO
Mr. Ajay Saraf, Executive Director
Mr. Ketan Patel
ICICI Securities Holding Inc.
Mr. Sandeep Batra, Director
Mr. Sriram Iyer, Director
Mr. Warren Law
ICICI Securities, Inc.
Mr. Anup Bagchi, Chairman
Mr. Ajay Saraf
Mr. Jaideep Goswami
Mr. Subir Saha
Mr. Robert Ng
AWARDS AND RECOGNITION
ICICIdirect.com, won the ‘Outlook Money Best e- Brokerage Award’ eighth time
in a row. Previously, the firm won the award in 2004, 2005, 2007, 2008, 2009,
2010 and 2011.
ICICI Securities won the ‘Outlook Smart use Technology eRetailer of the year
2013’ conferred by FIHL in association with HomeShop18.com.
ICICIdirect.com won the ‘Stock Broker of the Year’ award at the Money Today
FPCIL Awards 2012.
ICICI Securities Business Partners (Sub Broker channel) won the ‘Franchisor of
the Year’ at the Franchise Awards 2012 for the fourth time in a row.
ICICI Securities won the ‘BSE IPF D&B Equity Broking Awards 2012’ under two
o Best Equity Broking House – Cash Segment
o Largest E-Broking House
ICICI Securities won the ‘Chief Learning Officer Award’ from World HRD
Congress for Innovation in Learning category.
ICICI Securities won the ‘Grand Jury Award’ for ‘Commendable performance by
National Financial Advisor (Retail) – Online’ at the CNBC TV 18 – Financial
Advisor Awards 2011. The awards 31ecognize India’s best Financial Advisors.
ICICI Securities Business Partners (Sub Broker channel) won the ‘Franchisor of
the Year at the Franchise Awards 2011’, third time in a row.
ICICI Securities awarded the Asiamoney `Best Domestic Equity House’ for 2012
Vikash Mantri tops The Wall Street Journal’s Asia’s Best Analysts survey in the
media sector for 2010
ICICI Securities has awarded as the Best Investment Bank 2008 by Global
The Corporate Finance group also was awarded a runner-up Best Merchant
Banker by Outlook Money in 2007.
ICICI Securities topped the Prime Database League Tables 2007 for money
raised through IPOs/FPOs.
The equities team was adjudged the ‘Best Indian Brokerage House-2003’ by
ICICI direct has also won the ‘CNBC AWAAZ 2007 Consumer Award’ for the
Most Preferred Brand of Financial Advisory Services.
‘Best Broker’ – Web 18 Genius of the Web Awards 2007
Fairfax Business Media has recognized ICICI Securities as a recipient of ‘CIO
100 Asia’ award in 2013.
ICICI Securities has been awarded the ‘NASSCOM IT Innovation Awards 2013’.
‘CIO Masters for Collaboration and Cloud’ was awarded by Biztech2 (Network
18) in 2013.
ICICI Securities has been conferred by Dataquest in 2012
o Business Technology Excellence award
o Business Technology Innovation award
IDG India has recognized ICICI Securities as a recipient of CIO 100 award in
2009, 2010, 2011 and 2012, four times in a row.
IDG India has conferred the CIO Hall of Fame award in 2012.
EMC Transformers Award was presented for best use of IT to transform business
CIO Masters for Virtualization was awarded by Biztech2 (Network 18) in 2012
ICICI Securities was the Bloomberg UTV CXO Awards Finalist for Best Utilization
of IT to Transform Business in 2011
ICICI Securities was conferred the Gold CIO award jointly by CIOL and
Dataquest at the Enterprise Awards 2010
ICICI Securities was the NASSCOM CNBC IT User Awards Finalist in 2009 and
Indian Bank’s Association Business Technology Awards was presented for Best
Online Trading Platform in 2006 and 2007
The Indian capital market has changed dramatically over the past decade, since 2000.
Changes have also been taking place in government regulations and technology. The
expectations of the investors are also changing. The only inherent feature of the capital
market, which has not changed is the 'risk' involved in investing in corporate securities.
Managing the risk is emerging as an important function of both large scale and
small-scale investors. Risk management of investing in corporate securities is under
active and extensive discussion among academicians and capital market operators.
"Switching from security to security accomplishes nothing but to increase
transactions costs and harm performance. Thus, even if markets are less than fully
efficient, indexing is likely to produce higher rates of return than active portfolio
management. Both individual and institutional investors will be well served to employ
indexing for, at the very least, the core of their equity portfolio”, (Malkiel, 2005).
While behavioral literature focuses on how individual investors manage their
portfolios and that how an active portfolio management offers various strategies for
beating the benchmarks. Among investors a common tendency of holding losers for
long and selling winners quickly has been pointed out by Shefrin and Statman (1985).
They named it as the disposition effect. They related their findings to the concepts
of “loss aversion”, the issue of “self -control”, “mental accounting”, and the “aspiration to
Diversification and risk-management techniques are crucial concepts in the
portfolio theory. However mostly investors fail to diversify their portfolios properly. It is
because they determine risks at individual asset level instead of determining at portfolio
3.1 PAST RESEARCH WORK ABOUT THE INVESTMENT
BASIC INVESTMENT RULES
Grewal S.S and Navjot Grewall revealed some basic investment rules and rules for
selling shares. They warned the investors not to buy unlisted shares, as Stock
Exchanges do not permit trading in unlisted shares.
Another rule that they specify is not to buy inactive shares, ie, shares in which
transactions take place rarely. The main reason why shares are inactive is because
there are no buyers for them. They are mostly shares of companies, which are not
A third rule according to them is not to buy shares in closely-held companies
because these shares tend to be less active than those of widely held ones since they
have a fewer number of shareholders. They caution not to hold the shares for a long
period, expecting a high price, but to sell whenever one earns a reasonable reward.
Preethi Singh disclosed the basic rules for selecting the company to invest in. She
opined that understanding and measuring return and risk is fundamental to the
investment process. According to her, most investors are 'risk averse'. To have a higher
return the investor has to face greater risks.
She concludes that risk is fundamental to the process of investment. Every
investor should have an understanding of the various pitfalls of investments. The
investor should carefully analyze the financial statements with special reference to
solvency, profitability, EPS, and efficiency of the company.
IMPORTANCE OF THE RATE OF RETURN IN INVESTMENTS
Jack Clark Francis (1986) revealed the importance of the rate of return in investments
and reviewed the possibility of default and bankruptcy risk. He opined that in an
uncertain world, investors cannot predict exactly what rate of return an investment will
However he suggested that the investors can formulate a probability distribution
of the possible rates of return. He also opined that an investor who purchases corporate
securities must face the possibility of default and bankruptcy by the issuer. Financial
analysts can foresee bankruptcy. He disclosed some easily observable warnings of a
firm's failure, which could be noticed by the investors to avoid such a risk.
IMPORTANCE OF THE RATE OF RETURN IN INVESTMENTS
David.L.Scott and William Edward4 (1990) reviewed the important risks of owning
common stocks and the ways to minimize these risks. They commented that the
severity of financial risk depends on how heavily a business relies on debt.
Financial risk is relatively easy to minimize if an investor sticks to the common
stocks of companies that employ small amounts of debt. They suggested that a
relatively easy way to ensure some degree of liquidity is to restrict investment in stocks
having a history of adequate trading volume.
NATURE OF MARKET RISK
Lewis Mandell (1992) reviewed the nature of market risk, which according to him is very
much 'global'. He revealed that certain risks that are so global that they affect the entire
investment market. Even the stocks and bonds of the well-managed companies face
He concluded that market risk is influenced by factors that cannot be predicted
accurately like economic conditions, political events, mass psychological factors, etc.
Market risk is the systemic risk that affects all securities simultaneously and it cannot be
reduced through diversification.
Nabhi Kumar Jain (1992) specified certain tips for buying shares for holding and also for
selling shares. He advised the investors to buy shares of a growing company of a
growing industry. Buy shares by diversifying in a number of growth companies operating
in a different but equally fast growing sector of the economy.
He suggested selling the shares the moment company has or almost reached the
peak of its growth. Also, sell the shares the moment you realise you have made a
mistake in the initial selection of the shares. The only option to decide when to buy and
sell high priced shares is to identify the individual merit or demerit of each of the shares
in the portfolio and arrive at a decision.
PRINCIPLES DETERMINING SUCCESS IN STOCK MARKET
Carter Randal (1992) offered to investors the underlying principles of winning on the
stock market. He emphasized on long-term vision and a plan to reach the goals. He
advised the investors that to be successful, they should never be pessimists.
He advised the investors to watch and invest. He insisted that investors should
do a market watch so that they would be aware of the market fluctuations which help
them to invest in growing companies that perform well in stocks as well as the market.
He revealed that though there has been a major economic crisis almost every
year, it remains true that patient investors have consistently made money in the equities
market. He concluded that investing in the stock market should be an un-emotional
endeavour and suggested that investors should own a stock if they believe it would
SPECULATIVE CHARACTER OF INDIAN STOCK MARKET
L.C.Gupta (1992) revealed the findings of his study that there is existence of wild
speculation in the Indian stock market. The over speculative character of the Indian
stock market is reflected in extremely high concentration of the market activity in a
handful of shares to the neglect of the remaining shares and absolutely high trading
velocities of the speculative counters.
He opined that, short- term speculation, if excessive, could lead to "artificial
price". An artificial price is one which is not justified by prospective earnings, dividends,
financial strength and assets or which is brought about by speculators through rumours,
manipulations, etc. He concluded that such artificial prices are bound to crash sometime
or other as history has repeated and proved.
Yasaswy N.J. (1993) disclosed how 'turnaround stocks' offer big profits to bold investors
and also the risks involved in investing in such stocks. Turnaround stocks are stocks
with extraordinary potential and are relatively under priced at a given point of time.
He also revealed that when the economy is in recession and the fundamentals
are weak, the stock market, being a barometer of the economy, also tends to be
depressed. A depressed stock market is an ideal hunting ground for 'bargain hunters',
who are aggressive investors.
Sooner or later recovery takes place which may take a very long time. He
concluded that the investors' watch work is 'caution' as he may lose if the turnaround
strategy does not work out as anticipated.
FUTURES AS A TOOL TO COVER SHORT-TERM RISKS
Sunil Damodar (1993) evaluated the 'Derivatives' especially the 'futures' as a tool for
short-term risk control. He opined that derivatives have become an indispensable tool
for finance managers whose prime objective is to manage or reduce the risk inherent in
He disclosed that the over-riding feature of 'financial futures' in risk management
is that these instruments tend to be most valuable when risk control is needed for a
short- term, ie, for a year or less.
They tend to be cheapest and easily available for protecting against or benefiting
from short term price. Their low execution costs also make them very suitable for
frequent and short term trading to manage risk, more effectively.
Yasaswy J.N. (1993) evaluated the quantum of risks involved in different types of
stocks. Defensive stocks are low risk stocks and hence the returns are relatively low but
steady. Cyclical stocks involve higher risks and hence the rewards are higher when
compared to the growth stocks. Growth stocks belong to the medium risk category and
they offer medium returns which are much better than defensive stocks, but less than
the cyclical stocks.
The market price of growth stocks does fluctuate, sometimes even violently
during short periods of boom and bust. He emphasized the financial and organizational
strength of growth stocks, which recover soon, though they may hit bad patches once in
RELATIONSHIP BETWEEN RISK, INVESTOR PREFERENCES AND INVESTOR
Donald E Fischer and Ronald J. Jordan(1994) analyzed the relation between risk,
investor preferences and investor behaviour. The risk return measures on portfolios are
the main determinants of an investor's attitude towards them. Most investors seek more
return for additional risk assumed.
The conservative investor requires large increase in return for assuming small
increases in risk. The more aggressive investor will accept smaller increases in return
for large increases in risk. They concluded that the psychology of the stock market is
based on how investors form judgements about uncertain future events and how they
react to these judgements.
R.Venkataramani (l994) disclosed the uses and dangers of derivatives. The derivative
products can lead us to a dangerous position if its full implications are not clearly
understood. Being off- balance shekt in nature, more and more derivative products are
traded than the cash market products and they suffer heavily due to their sensitive
He brought to the notice of the investors the 'Over the counter product' (OTC)
which are traded across the counters of a bank. OTC products (eg. Options and futures)
are tailor made for the particular need of a customer and serve as a perfect hedge. He
emphasized the use of futures as an instrument of hedge, for it is of low cost.
IDENTIFICATION OF COMPANY TO INVEST
K.Sivakumar (1994) disclosed new parameters that will help investors identify the best
company to invest in. He opined that Economic Value Added (EVA) is more powerful
than other conventional tools for investment decision making like EPS and price earning
ratio. EVA looks at how capital raised by the company from all sources has been put to
use. Higher the EVA, higher the returns to the shareholder. A company with a higher
EVA is likely to show a higher increase in the market price of its shares.
To be effective in comparing companies, he suggested that EVA per share
(EVAPS) must be calculated. It indicates the super profit per share that is available to
the investor. The higher the EVAPS, the higher is the likely appreciation in the value in
He also revealed a startling result of EVA calculation of companies in which 200
companies show a negative value addition that includes some blue chip companies in
the Indian Stock Market.
NEED FOR DOING FUNDAMENTAL ANALYSIS
Pattabhi Ram.V (1995) emphasized the need for doing fundamental analysis and doing
Equity Research (ER) before selecting shares for investment. He opined that the
investor should look for value with a margin of safety in relation to price. The margin of
safety is the gap between price and value. He revealed that the Indian stock market is
an inefficient market because of the absence of good communication network, rampant
price rigging, the absence of free and instantaneous flow of information, professional
broking and so on.
He concluded that in such inefficient market, equity research will produce better
results as there will be frequent mismatch between price and value that provides
opportunities to the long-term value oriented investor.
INTERNATIONAL FACTORS OF RISKS AND THEIR EFFECT ON FINANCIAL
Philippe Jhorion and Sarkis Joseph Khoury (1996) reviewed international factors of risks
and their effect on financial markets. He opined that domestic investment is a subset of
the global asset allocation decision and that it is impossible to evaluate the risk of
domestic securities without reference to international factors. Investors must be aware
of factors driving stock prices and the interaction between movements in stock prices
and exchange rates.
According to them the financial markets have become very much volatile over the
last decade due to the unpredictable speedy changes like oil price shocks, drive
towards economic and monetary unification in Europe, the wide scale conversion of
communist countries to free market policies etc. They emphasized the need for tightly
controlled risk management measures to guard against the unpredictable behaviour of
RISK MANAGEMENT IN RELATION TO BANKS
S.Rajagopal. (1996) commented on risk management in relation to banks. He opined
that good risk management is good banking. A professional approach to risk
management will safeguard the interests of the banking institution in the long run.
He described risk identification as an art of combining intuition with formal
information and risk measurement is the estimation of the size, probability and timing of
a potential loss under various scenarios.
ESTIMATION OF RETURNS
Charles.P.Jones (1996) reviewed how to estimate security return and risk. To estimate
returns, the investors must estimate cash flows the securities are likely to provide. Also,
investors must be able to quantify and measure risk using variance or standard
deviation. Variance or standard deviation is the accepted measure of variability for both
realised returns and expected returns.
He suggested that the investors should use it as the situation dictates. He
revealed that over the past 12 years, returns in stocks, bonds, etc. have been normal.
Blue chip stocks have returned an average of more than 16% per year.
He warned that the investors who believe that these rates will continue in the
future also, will be in trouble. He also warned the investors not to allow themselves to
become victimised by "investment gurus".
PROCESSES INVOLVED IN RISK MANAGEMENT
V.T.Godse.(1996) revealed the two separate but simultaneous processes involved in
risk management. The first process is determining risk profile and the second relates to
the risk management process itself.
Deciding risk profile is synonymous with drawing a risk picture and involves the
1. Identifying and prioritizing the inherent risks
2. Measuring and scoring inherent risks.
3. Establishing standards for each risk component
4. Evaluating and controlling the quality of managerial controls.
5. Developing risk tolerance levels.
He opined that such an elaborate risk management process is relevant in the
Indian context. The process would facilitate better understanding of risks and their
Goetzmann and Kumar (2001) studied diversification in the light of demographic
variables and found that investors who are non-professionals and have low income
usually hold less diversified portfolios as they fail to do proper portfolio allocation.
They revealed that sudden investment without a proper or half-knowledge is sure
to bring potential losses to the investors. They concluded that diversified investment
portfolio of an investor is based on the awareness level of the investor and the charges
incurred then and there to trade in more than one portfolio at the same time.
3.2 RESEARCH GAP
The study analyzes the investment pattern of investors which is based upon
various parameters like income of the investor, time horizon and the risk taking ability of
the investor. Modern risk management techniques help the investors to a large extent
by avoiding any further losses with the help of an intelligent guess and continuous
It is very clear that the investors are risk averse. The study covers three risk
management techniques, namely, (i) Switching, (ii) Cut-loss and (iii) Short selling.
(i) Switching technique enables an investor to switch or move to a safer investment
alternative if he/she comes to know that the market fluctuations are going to be a hard
hit. In this case, an investor just switches his/her portfolio temporarily or permanently
depending upon the market performance.
(ii) Cut-loss technique assists an investor by procuring limited order at the time of
market fluctuations. When the market is down, obviously investors do not place bulk
orders but tend to sell out the orders-in-hand.
(iii) Short selling is a brand new technique whereby an investor procrastinates any
possible losses. This technique can be adopted only in intra-day trading whereby an
investor can sell the equity shares in the first place, at ongoing price or market price.
When their share price comes down, the investor can procure or buy them at a low
price, which is a profitable transaction.
Since the risk management techniques were not used by previous researchers,
inclusion of the risk management techniques adopted by modern investors to avoid any
proposed risks involved in investment, helped to overcome the flaws and hence the
gaps in research have been filled up in this study.
DEFINITION OF POPULATION
The study is mainly related to know the investment pattern of the investors on different
products of ICICI Securities. Their investment objective, frequency of investment and
factors determining their investment decision has to be analyzed so as to reveal their
investment framework. The population here was being investors in ICICI Securities
particularly in Nanganallur area.
TYPE OF RESEARCH
This is a descriptive research where survey method is adopted to collect primary
information from the investors using required scales and the required secondary
information for the analysis.
A questionnaire schedule was prepared and the primary data was collected through
Secondary data has been obtained from client database provided by ICICI for the
purpose of the study.
The population being large, the survey was carried among 150 respondents, all of them
are the investors in ICICI Securities Ltd., Nanganallur. They will be considered
adequate to represent the characteristics of the entire population of Nanganallur.
The sampling procedure followed in this study is non-probability convenient sampling.
Simple random sampling procedures are used to select the respondent from the client
database. The research work is carried out on the basis of structured questionnaire.
The study is restricted to the investors in ICICI Securities particularly in Nanganallur
TOOLS FOR DATA ANALYSIS
The analysis of data collection is completed and presented systematically with the use
of SPSS 16.0, MS-Excel and MS-Word. The various tools which were used to analyze
Chi square test,
Two-way ANOVA and
Data analysis is a body of methods that help to describe facts, detect patterns, develop
explanations, and test hypotheses. The data analysis is carried out using SPSS tool
where the variables that are to be tested for independence is entered and results are
identified. The various tests done by using Microsoft Excel and SPSS 16.0 are
percentage analysis, chi-square test and two-way ANOVA.
5.1 PERCENTAGE ANALYSIS
Percentage method refers to a specified kind which is used in making
comparison between two or more series of data. Percentages are based on descriptive
relationship. It compares the relative items. Since the percentage reduces everything to
a common base and thereby allow meaning comparison.
Percentage = Number of respondents X 100
Total no of respondents
Table 5.1.1: INVESTORS KNOWLEDGE OF FINANCE
Parameter No. of
An expert in the field of finance 40 26.67
Proficient in finance 46 30.67
No idea about finance but stay up-to-date 40 26.67
Limited to knowing things about stock market 24 16
Total 150 100
From the table 5.1.1, it is inferred that out of 150 investors, 30.67% of investors
have proficient knowledge in finance, 26.67% of investors are expert in finance, 26.67%
of investors do not know much about finance and 16% of investors have limited
knowledge about finance.
Fig 5.1.1: CHART SHOWING INVESTORS KNOWLEDGE OF FINANCE
To conclude from above fig 5.1.1, many investors have proficient knowledge in
Table 5.1.2: INVESTORS OBJECTIVE OF INVESTMENT
Parameter No. of
Wealth preservation 70 46.67
Purchase of home 40 26.67
Education funding 30 20
Retirement planning 10 6.66
Total 150 100
From table 5.1.2, it is inferred that out of 150 investors, 46.67% of investors
invest for wealth preservation, 26.67% of investors invest with the objective of buying a
house, 20% of investors invest with the aim of education funding and 6.66% of investors
invest for retirement planning.
Fig 5.1.2: CHART SHOWING INVESTORS OBJECTIVE OF INVESTMENT
To conclude, many investors invest with the objective of preserving their
Table 5.1.3: INVESTORS RESPONSE TO MARKET FLUCTUATIONS
Parameter No. of
Yes 128 85.33
No 22 14.67
Total 150 100
From the above table 5.1.3, it is inferred that out of 150 investors, 85.33% of
investors do respond to the market fluctuations by altering their investment pattern and
14.67% of investors do not get affected even when there are market fluctuations.
Fig 5.1.3: CHART SHOWING INVESTORS RESPONSE TO MARKET
To conclude, many investors alter their investment pattern when there are market
Table 5.1.4: INVESTMENT PORTFOLIO OF INVESTORS
Parameter No. of respondents % of respondents
Mutual funds 20 13.33
Equity 35 23.33
E-gold 45 30
Corporate debentures 18 12
IPOs 20 13.33
F&O 12 8
Total 150 100
From the above table 5.1.4, it is inferred that out of 150 investors, 30% of
investors have invested in E-Gold, 23.33% of investors have invested in Equity, 13.33
have invested in Mutual funds, 13.33 have invested in IPO’s, 12% of investors have
invested in Corporate debentures and 8% of investors have invested in Futures &
Fig 5.1.4: CHART SHOWING INVESTMENT PORTFOLIO OF INVESTORS
To conclude, many investors have invested in E-Gold investment avenue,
wherein they procure the value of gold in legal papers (or) paper gold.
Table 5.1.5: INVESTORS TENDENCY TO GET UPDATES FROM ICICI
Parameter No. of
Yes 143 95.33
No 7 4.67
Total 150 100
From table 5.1.5, it is inferred that out of 150 investors, 95.33% of investors
prefer to get updates from ICICI and 4.67% of investors are satisfied with existing
services and do not prefer to get any updates from ICICI.
Fig 5.1.5: CHART SHOWING INVESTORS TENDENCY TO GET UPDATES FROM
To conclude, many investors want to keep themselves updated about the
services rendered by ICICI via different communication medium.
Table 5.1.6: INVESTORS NEED FOR PERSONALIZED INVESTMENT ADVISING
Parameter No. of
Yes 145 96.67
No 5 3.33
Total 150 100
From the above table 5.1.6, it is inferred that out of 150 investors, 96.67% of
investors prefer personalized investment advising from ICICI and 3.33% of investors
invest with their own insights.
Fig 5.1.6: CHART SHOWING INVESTORS NEED FOR PERSONALIZED
To conclude, many investors prefer personalized investment advising from
ICICI by matching the available portfolio with their income, risk taking ability and time
Table 5.1.7: INVESTORS NEED FOR BRANCH ADVISORY SERVICES
Yes 100 66.67
No 50 33.33
Total 150 100
From the above table 5.1.7, it is inferred that out of 150 investors, 66.67% of
investors say that they get advice from ICICI and 33.33% of investors say that they do
not get any advice from ICICI regarding their portfolio management.
Fig 5.1.7: CHART SHOWING INVESTORS NEED FOR BRANCH ADVISORY
To conclude, many investors get the advice from the Nanganallur ICICI branch
regarding their investment and they feel that the extension of service helps them in
Table 5.1.8: SOURCE OF INVESTORS’ INVESTMENT IDEA
Self-awareness 57 38
Financial advisors 35 23.33
Brokers’ advice 20 13.33
Friends/relatives’ advice 20 13.33
Media 18 12
Total 150 100
From the above table 5.1.8, it is inferred that out of 150 investors, 38% of
investors are self-aware, 23.33% of investors got financial advice, 13.33% of investors
got advice from the brokers, 13.33% of investors secured advice from their close
associates and 12% of investors gained advice via media.
Fig 5.1.8: CHART SHOWING SOURCE OF INVESTORS’ INVESTMENT IDEA
To conclude, many investors take investment decisions on their own and are
self-aware about what is going on around them and the equity market as well.
Table 5.1.9: INVESTORS SAFETY AND SECURITY
Parameter No. of
Yes 145 96.67
No 5 3.33
Total 150 100
From the above table 5.1.9, it is inferred that out of 150 investors, 96.67% of
investors feel satisfied about the safety and security of their investment in ICICI and
3.33% of investors are unsatisfied about safety and security in ICICI.
Fig 5.1.9: CHART SHOWING INVESTORS SAFETY AND SECURITY
To conclude, many investors are assured of their safety and security of their
investment in ICICI securities.
Table 5.1.10: RATE OF BROKERAGE PAID BY INVESTORS
0.05 120 80
0.55 30 20
Total 150 100
From the above table 5.1.10, it is inferred that out of 150 investors, 80% of
investors’ trade in intra-day and pay 0.05% brokerage and 20% of investors’ trade in
delivery and pay 0.55% brokerage.
Fig 5.1.10: CHART SHOWING RATE OF BROKERAGE PAID BY INVESTORS
To conclude, many investors are engaged in intra-day or daily trading and pay
0.05% of brokerage to ICICI.
Table 5.1.11: INVESTMENT TERM OF INVESTORS
Parameter No. of
Short term 84 56
Long term 48 32
Both 18 12
Total 150 100
From the above table 5.1.11, it is inferred that out of 150 investors, 56% are short
term investors, 32% are long term investors and the remaining 12% have invested in
both short term and long term investment as well.
Fig 5.1.11: CHART SHOWING INVESTMENT TERM OF INVESTORS
To conclude, many investors have invested in short term investments so as to
get faster return on investment.
Table 5.1.12: INVESTORS’ FREQUENCY OF INVESTMENT
Parameter No. of
Daily 42 28
Weekly 28 18.66
Monthly 20 13.33
Quarterly 12 8
Half yearly 18 12
Annually 30 20
Total 150 100
From the above table 5.1.12, it is inferred that out of 150 investors, 28% prefer
daily investment, 20% prefer annual investment, 18.66% prefer weekly investment,
13.33% prefer monthly investment, 12% prefer half-yearly investment and 8% prefer
Fig 5.1.12: CHART SHOWING INVESTORS’ FREQUENCY OF INVESTMENT
To conclude, many investors prefer daily investment in the equity market.
Table 5.1.13: INVESTMENT DECISION OF INVESTORS
Risk involved 40 26.67
Return on investment 25 16.66
Past performance 15 10
Future Growth 55 36.67
Other factors 15 10
Total 150 100
From the above table 5.1.13, it is inferred that out of 150 investors, 36.67% of
investors expect future growth of their investment, 26.67% of investors invest based on
risk factor, 16.66% of investors expect return on their investment, 10% of investors
invest based on their past performance and 10% of investors invest based on
miscellaneous factors like gaining firsthand experience in investment.
Fig 5.1.13: CHART SHOWING INVESTMENT DECISION OF INVESTORS
To conclude, many investors invest in the equity market with the hope of growth
of their investment in the future.
Table 5.1.14: TENDENCY OF INVESTORS TO SHIFT TO A SAFER INVESTMENT
PATTERN WHEN THE MARKET FLUCTUATES
Parameter No. of
I disagree 10 6.67
I somewhat agree 54 36
I agree 86 57.33
Total 150 100
From the above table 5.1.14, it is inferred that out of 150 investors, 57.33% agree
to sell their risky investments and put the money in safer investments, 36% somewhat
agree to sell their risky investments and put the money in safer investments and 6.67%
totally disagree to sell their risky investments.
Fig 5.1.14: CHART SHOWING TENDENCY OF INVESTORS TO SHIFT TO A SAFER
INVESTMENT PATTERN WHEN THE MARKET FLUCTUATES
To conclude, many investors are risk averse and tend to sell their risky
investments and put the money in safer investments.
Table 5.1.15: INVESTORS TOLERANCE OF SHORT TERM FLUCTUATIONS FOR
POTENTIAL LONG-TERM GAINS
Parameter No. of
Strongly agree 15 10
Agree 27 18
Disagree 53 35.33
Strongly Disagree 55 36.67
Total 150 100
From the above table 5.1.15, it is inferred that out of 150 investors, 36.67%
strongly disagree to tolerate sharp ups and downs in the short-term value of their
investments in return for potential long-term gains, 35.33% disagree to tolerate sharp
ups and downs in the short-term value of their investments, 18% agree to tolerate sharp
ups and downs in the short-term value of their investments, 10% strongly agree to
tolerate sharp ups and downs in the short-term value of their investments.
Fig 5.1.15: CHART SHOWING INVESTORS TOLERANCE OF SHORT TERM
FLUCTUATIONS FOR POTENTIAL LONG-TERM GAINS
To conclude, many investors strongly disagree to tolerate sharp ups and downs
in the short-term value of their investments in return for potential long-term gains.
Table 5.1.16: RISK MANAGEMENT TECHNIQUE ADOPTED BY INVESTORS
Parameter No. of
Switching 52 34.67
Cut-loss 74 49.33
Short-selling 24 16
Total 150 100
From the above table 5.1.16, it is inferred that out of 150 investors, 49.33% of
investors follow cut-loss technique to manage their risk, 34.67% of investors follow
switching technique to manage their risk and remaining 16% of investors follow short
selling investment technique to manage their risk.
Fig 5.1.16: CHART SHOWING RISK MANAGEMENT TECHNIQUE ADOPTED BY
To conclude, many investors follow cut-loss technique to manage their
risk, so that they can at least minimize the proposed losses by procuring limited stocks
by watching the market.
Table 5.1.17: INVESTORS SATISFACTION LEVEL OF SERVICES OFFERED BY
Parameter No. of
Highly satisfied 78 52
Satisfied 32 21.33
Dissatisfied 26 17.33
Highly dissatisfied 14 9.33
Total 150 100
From the above table 5.1.17, it is inferred that out of 150 investors, 52% of
investors are highly satisfied with the services offered by ICICI Securities, 21% of
investors are just satisfied, 17.33% of investors are dissatisfied, 9.33% of investors are
highly dissatisfied with the services offered by ICICI Securities.
Fig 5.1.17: CHART SHOWING INVESTORS SATISFACTION LEVEL OF SERVICES
OFFERED BY ICICI
To conclude, many investors are highly satisfied with the services offered by
Table 5.1.18: MODE OF INVESTMENT MADE BY THE INVESTORS
Parameter No. of
Online trading 127 84.67
Brokers 15 10
Both 8 5.33
Total 150 100
From the above table 4.1.18, it is inferred that out of 150 investors, 84.67% of
investors do online trading, 10% of investors do trading through brokers and 5.33% of
investors do both online and offline trading.
Fig 5.1.18: CHART SHOWING MODE OF INVESTMENT MADE BY THE INVESTORS
To conclude, many investors are engaged in online trading and trade by
themselves or by relationship managers who does market watch and assist the
investors, regarding profitable companies to invest.
5.2 CHI-SQUARE TEST
The Chi square test procedure tabulates a variable into categories and computes
Pearson chi-square statistic. This goodness-of fit test compares the observed and
expected frequencies in each category to test that all categories contain the same
proportion of values or test that each category contains a user-specified proportion of
values. It is a statistical method to test whether two variables are independent or
The chi-square test for independence examines whether knowing the value of
one variable helps to estimate the value of another variable. The chi-square test
for homogeneity examines whether two populations have the same proportion of
observations with a common characteristic.
Null hypothesis (H0): There is no significant difference between the investment decision
of investors and frequency of investment made by the investor.
Alternate hypothesis (H1): There is significant difference between the investment
decision of investors and the frequency of investment made by the investor.
Table 5.2.1: TABLE SHOWING CROSS-TABULATION BETWEEN
INVESTMENT_DECISION VARIABLE AND FREQUENCY_OF _INVESTMENT
Table 5.2.2: TABLE SHOWING PEARSON CHI-SQUARE
Since p<1.20, we reject the null hypothesis in favor of the alternative hypothesis. Hence,
there is significant difference between the investment decision of investors and the
frequency of investment made by the investors.
5.3 TWO-WAY ANOVA
The two-way ANOVA compares the mean differences between groups that have been
split on two independent variables (called factors). The primary purpose of a two-way
ANOVA is to understand if there is an interaction between the two independent
variables on the dependent variable.
The two-way analysis of variance (ANOVA) test is an extension of the one-way
ANOVA test that examines the influence of different categorical independent
variables on one dependent variable. While the one-way ANOVA measures the
significant effect of one independent variable, the two-way ANOVA is used when there
are more than one independent variable and multiple observations for each
The two-way ANOVA can not only determine the main effect of contributions of
each independent variable but also identifies if there is a significant interaction
effect between the independent variables.
Null hypothesis (H0): The rate of brokerage paid by investors is independent from
primary investment objective.
Alternate hypothesis (H1): The rate of brokerage paid by investors is associated with the
type of investment portfolio of investor.
Table 5.3.1: TABLE SHOWING DESCRIPTIVE STATISTICS OF
INDEPENDENT VARIABLES TYPE_OF_INVESTMENT_AVENUE &
PRIMARY_INVESTMENT_OBJECTIVE OVER DEPENDENT VARIABLE
The above table 5.3.1 provides the mean and standard deviation for each
combination of the groups of the independent variables type_of_investment_avenue &
primary_investment_objective. In addition, the table provides "Total" rows, which allows
means and standard deviations for groups only split by one independent variable.
The plot of the mean “current brokerage” score for each combination of groups of
"primary objective of investment" and "type of investment avenue" are plotted in a line
graph, as shown below:
Fig 5.3.1: LINE-GRAPH SHOWING PLOT OF THE MEAN CURRENT_BROKERAGE
STATISTICAL SIGNIFICANCE OF THE TWO-WAY ANOVA
Table 5.3.2: TABLE SHOWING TWO-WAY ANOVA
The above table 5.3.2 reveals that there is significant difference
between mean “current brokerage” and “primary investment objective” but there is no
significant difference between mean “current brokerage” and “type of investment
avenue” (p < .0005). Hence we reject null hypothesis in favor of alternate hypothesis.
So, the rate of brokerage paid by investors is associated with the type of investment
portfolio of investor.
CHAPTER – 6
The investment pattern of the investors’ depends upon their level of income,
frequency of investment, their investment portfolio, their risk taking ability and
their investment decision.
Many investors are engaged in intra-day or daily trading which is a short-term
investment and pay 0.05% of brokerage to ICICI.
Many investors take investment decisions on their own and are self-aware about
what is going on around them and the equity market as well.
Future growth of investment and risk involved are the deciding factors of
investment by the investors.
Return on investment and financial advisory services are the two important
factors for those investors who have invested in equity market.
Many investors have invested in E-Gold investment avenue, wherein they
procure the value of gold in electronic form.
Many investors follow cut-loss technique to manage their risk, so as to minimize
any proposed losses by procuring limited stocks by watching the market
Many investors alter their investment pattern by selling their risky investments
and putting the money in safer investments when there are market fluctuations.
It is recommended that investors’ decision should be based on the broker’s
Risk and return should be evaluated before taking an investment decision.
There should be regular updates from ICICI to the investors via sms updates as it
will help them to invest with a caution.
Investors who want to avoid risk should invest in treasury notes or high-rated
municipal bonds, debentures etc.
A periodic client meet can be organized and conducted so that different investors
get to know others and can secure better ideas, share smart investment
techniques and get benefitted by the company.
Since the investors expect trading in commodities, ICICI can venture into
commodity trading and diversify its business.
As investors’ decision is based on the study of different sources, ICICI can go for
T.V commercials so as to attract interest of potential investors.
Since some of the investors’ portfolio is diversified, there is a huge scope for
ICICI to venture into new services and broaden the portfolio of other investors.
ICICI Securities can expand its business by setting up new branches where they
have high volume of clients.
The study is conducted among the investors in ICICI Securities, particularly in
Nanganallur area. The investment pattern of investors’ are driven by various factors like
type of investment avenue preferred by the investor, risk taking ability of the investor,
time horizon preferred by investor to claim his/her return on investment, frequency of
The study shows how different factors have an impact on the framework of
investment made by the investor. However it is very difficult to come to a definite
conclusion that how does the pattern of investment differs from one investor to that of
But still the study concludes to an extent that investors’ alter their investment
pattern by selling their risky investments and putting the money in safer investments in
particular investment product like e-gold, which has gained increasing popularity due to
low risk involved and sequentially comes equity product, mutual funds, and other
investment avenues which has performed well in the past, and supported with strong
demands will perform well in the future.
Indian economy has not yet reached up to the mark in world equity market as
majority of the investment even in Indian equity market comes from foreign direct
investment. On a scale of 100 percent, only 2 percent of the total Indian population of
1.2 billion (as of December 2013) is engaged in equity market. Out of the 2 percent,
only 1.8 percent of the investors are active traders, rest of them are dormant traders.
The study also draws an important conclusion that the investors are keen to
invest in short term and less risky products and are very much interested in future
growth of their investments. Investors are aware about the factors affecting their short
term as well as long term investment plans and they do self-analysis before making
SCOPE FOR FURTHER RESEARCH
The study is conducted by taking a limited number of sample size of 150 investors,
which is stated earlier. This study reflects the impact of various factors that determine
the investment pattern of investors who are residing in Nanganallur.
Investment is a wider concept. So the study can expand the number of investors
who are into equity market and the geographical area of the respondents governing the
study can also be expanded.
There might be a chance that the response of the investors’ of different nature
are varied due to diversity in social life, living pattern, income level, etc that needs to be
The Indian equity market is not up to the mark when compared to world market.
This is because of the blind spots present in equity market. Many notable experts say
that it would take at least a year to get a clear view of the equity market.
The risk proportion is a notable parameter when a person decides before
investing. So in the future, the scope of the study needs to be briefed according to the
requirements of the investor.
Nowadays many housewives spend their spare time by buying and selling
securities without any assistance or advice. This lands them in trouble by causing a
dent in their wallet. In the future, the study can cover investors who invest from home.
Many experts say that investors even fail to a pilot study about the performance
of the company where they invest in. As a result they do not watch the market situation.
This leads them to buy the securities at a higher price and sell the securities at a lower
price, which is a huge loss. So the study needs to cover vital aspects of investment like
market watch, smart investment techniques, systematic investment planning, etc.
1) Grewal and Navjot Grewal, “Profitable Investment in shares”, Vision Books Pvt.
Ltd., Connaught Place, New Delhi 2011, Pg. 36-42.
2) Preethi Singh, “Investment Management”, Himalaya Publishing House, New
Delhi, 2006, Pg. 48-54.
3) Website: http://financenmoney.in/category/personal-financeinvestment-planning
4) “An Introduction To The Indian Stock Market”,
http:/investopedia.com/articles/stocks/09/indian-stock-market.asp, last accessed
• Name: ___________________________
• Contact No/E-mail id: ____________________________
Less than 20 20-30 31-40 41-60
More than 60
2) Educational level
PUC Graduate Post-Graduate Professional
Government employee Private Sector employee
Self-Employed Retired Others………………….
4) Annual income (in INR)
Less than 1 lakh 1-2 lakhs 2-3.5 lakhs 3.5-5 lakhs
More than 5 lakhs
5) Annual investments (in INR)
Less than 25,000 25,000-50,000 50,001-1,00,000 1,00,001-2,00,000
2,00,001 & above
6) How good is your knowledge of finance?
An expert in the field of finance
Proficient in finance
Don't know much about finance but I keep myself up-to-date
Limited to knowing things like how the stock market is moving
7) What is your primary objective for accumulating assets?
Purchase of a home
8) Do you invest/ trade online?
9) If Yes, you invest through:
10) If you are dealing through brokers (on phone), do you want to trade/ invest
11) In which of the following investment avenues have you invested?
11) State the reason behind the choice of your investment options
12) What is the current brokerage that you pay?
13) Are you a short term or a long term investor?
14) What is your frequency of investments?
15) Your investment decision is depending on?
Return on Investment
16) Market movement affects your investment pattern?
17) When the market goes down, I tend to sell some of my riskier investments and
put the money in safer investments.
I somewhat agree
18) I can tolerate sharp ups and downs in the short-term value of my investments in
return for potential long-term gains
19) Which of the following risk management technique you use mostly?
20) Do you expect to get regular updates about various Investment options from your
21) Do you want personalized Investment advising at your branch/ city?
22) At present, is your branch advising you on your Investment Portfolio
23) How satisfied are you with the services offered by ICICI Securities?
24) How satisfied are you with safety and security of ICICI Securities?
25) What kind of new product/service would you want to add to your current portfolio
from ICICI Securities?
26) Do you have any suggestions to make ICICI Direct product/service better?