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General investment pvt.ltd. General investment pvt.ltd. Document Transcript

  • General Investment Pvt. Ltd. (Everyone has a right to be rich and we can make you rich) Abstract:- The business of investment and especially in stock market is always risky, but investment and trading strategies, techniques, systematic plans and good observation of the market can lead us to the high profit. There are lots of people who really don’t know about investment because they believe in savings in the banks. But savings give them very low profit (4 to 10% max.) and they don’t want to take risk on their hard earned money because of the risk factor is involved in the market but we all know that ‘Money makes Money’ and General Investment is based on belief that Everyone has a right to be rich and We can fulfill their desire through our business, they can get at least 20-25 % returns annually on their investment, Because money is the need of everyone in today’s world. And we know the value of the money. General Investment always takes care of their clients. We never commit false promises. We give quality service to our clients. We have a good analyst team which leads us to high profit. General Investment makes other people life better, giving them financial freedom and good returns on their investment. This can make a contribution to promoting the national economy.
  • Section – General (A) Group no. – 7 Members- Minakshi kumari (2k11a16) Peeyush pattanaik (2k11a17) Sunil singh (2k11a35) Vikas chauhan (2k11a38) (group leader) Ritika sinha (2k11a43) Himangi bhatt (2k11a51) ASIA PACIFIC INSTITUTE OF MANAGEMENT, NEW DELHI Address: 3 & 4 Institutional Area, Jasola, Opp. Sarita Vihar, New Delhi -110025
  • Content Page Particulars Page No. 1. Introduction 1-2 2. Vision 3 - Mission 3 - Goal 3 - Objectives 3 - Slogan 3 3. Organizational plan 4 4. Project feasibility report (PFR) 5 4.1. Marketing feasibility 5 4.1.1. Market Analysis Summary 5 4.1.2. Market segmentation 5 4.1.3. Market analysis 6 4.1.4. Target market segment strategy 6 4.1.5. Market trend 7 4.1.6. Market growth 8 4.1.7. Service business analysis 8 4.1.8. Business participants 8 4.1.9 Strategy and implementation 8 4.1.10 Marketing strategy 9 4.1.11 Competitive edge 9 4.1.12 Sales startegy 9-10 4.2. Financial feasibility 11-16 4.3. Economic feasibility 17 4.4. Social feasibility 17 5. Action plan 18
  • List of Tables Page S. No. Particulars Page No 1. Market segmentation (pie chart) 6 2. Table -1 Asset 11 3. Table -2 Expenses 11 4. Table -3 Salary 12 5. Table -4 Investment 12 6. Table -5 start up (bar graph) 12
  • 1 1. Introduction Indian economy is a very big and growing economy in the world. The financial condition of the country has shown significant development in the last few years and has become much stable these days. But there are lots of problems in India, which devastate its growth, for example, increasing inflation, increasing poverty (rich get richer and poor get poorer), increasing unemployment etc. in India people have money but they don’t know how to make money through money. Most of the people don’t know the importance of investment, for them investment means investment in Bank Fixed Deposits (FD), Investments in Insurance policies, investments in Public Provident Fund (PPF), Investments in Real Estate (but investment in real estate needs huge amount of money, which is not possible for everyone), Investments in Stock Market and Mutual Funds (but most of the people don’t have the enough knowledge of stock market and mutual funds) etc. Let us now start understanding why investment is required in modern times. Every person has a stream of income which he uses to furnish the needs of his life. The balance that is left after spending on his life's needs is called Savings. This person now has two choices. He can either put the money safely in a locker as cold cash or he can put the money in instruments that will increase the value of his money. The latter form of money parking is termed as Investments. One needs to invest to achieve the following: Earn returns on the saving, secure the uncertain future, Achieve monetary support for the financial goals of life. In financial terms, one should invest wisely to meet the cost of inflation. Inflation is the rate at which the cost of living increases. The cost of living is simply what it costs to buy goods and services you need to live. Inflation causes money to lose its value because of which it will not buy the same amount of goods or services in the future as it did in the past. General Investment is a growing investment company, in which people invest their money and we invest their money in stock market on a daily basis, this strategy called day trading (intraday) and we give them good returns on their investment better than banks, mutual funds, FD etc. why general Investment has chosen day trading strategy. The most obvious benefit of day trading is that you can make money and have your profits by the end of the day. One of the best advantages of day trading is ability to close your position at or
  • 2 before the end of the trading day. For a day trader who opens and closes his position before the trading day ends, the risks of holding a stock overnight are erased. A traditional trader's profits can disappear overnight with traditional, long-term trading, but with day trading your profits are secure as long as you close your positions before the end of the trading day. And Day traders can often take advantage of a struggling market by utilizing short-selling trading strategies to take advantage of falling stock prices. The ability to make money off of the stock market in bear market conditions is a tremendous advantage for a knowledgeable day trader. General Investment makes money for their clients through this strategy. This leads to high profit for both the company and its clients.
  • 3 2. Vision: ‘makes everyone financially strong’. -Mission: ‘generate profit as much as possible for the client’s everyday’. -Goal: First class image, first class relation, and first class service will be our goals while making a fair profit for partners (employees) and clients. Recognizing that our partners are our most valued resource, general Investment will nurture and reward its' partners and clients as milestones are achieved, and the company flourishes. By giving high profit, General Investment will succeed as a company as well as have a positive impact on market. -Our goal is to be able to satisfy most all of the personal and corporate financial needs of our clients. We ensure the diversity or our investment and financial services so that we can grow as our client's needs grow. Always looking for ways to improve our services, we believe the only true way to measure success is through giving high returns to our clients. -Objective: To create profitable company this exceeds customers’ expectations. To increase the number of clients by at least 10 clients per year through superior profit and marketing. To give at least 20-25% returns to the clients on their investment by end of first year. -Slogan: ‘Everyone has a right to be rich and we can make you rich’. This is our company’s slogan which tells its clients that we know everyone has a desire to be rich but everyone cannot be rich but after connecting with us they can desire to be rich. That’s why we are here to make you enough rich so that you can enjoy your life.
  • 4 3. Organizational plan Sunil singh = Trader, Marketing, Finance Peeyush = Trader, Marketing, Day trading strategy maker Himangi = Trader, stock analyst, HR Ritika sinha= Trader, HR Vikas = Trader, Day trading strategy maker, stock analyst Minakshi = Trader, Marketing, Finance General Investment Pvt. Ltd. Sunil singh Himangi bhatt Vikas chauhan Peeyush pattanaik Ritika sinha Minakshi Partners
  • 5 4. Project Feasibility Report (PFR) 4.1. Marketing Feasibility 4.1.1. Market Analysis Summary General Investment has identified two distinct groups of target customers. These two groups of customers are distinguished by their earnings and savings. They have been grouped as clients with less than one lac Rupees and more than one lac Rupees. The main characteristic that makes both of these groups so attractive is their desire to make a difference in the world by making investment decisions that take into account environmental factors. 4.1.2. Market Segmentation General Investment has segmented the target market into two distinct groups. The groups can be differentiated by their difference in earnings and savings, clients with less than one lac Rupees and clients with more than one lac Rupees. Less than one lac Rupees: These customers or clients are middle class people who don’t have a strong financial position. Their annual saving around less than 1 lac Rupees. Not only working people but also college students, small shopkeepers etc, whose income are not enough to invest, fall under this segment. They are willing to invest their money to get huge profit on their investment. More than one lac Rupees: These customers or clients are upper middle class people. They have amassed over one lac Rupees in annual savings and are fairly savvy investors. These clients are generally concerned about the rate of return of their investments. And they are ready to invest in that companies or funds, which can give them high returns on their investment. Small and medium business owners, retired government employees, big business owners etc. are also fall under in this segment. Our mainly focus will be on second segment clients. They are also willing to invest their money to get huge profit on their investment.
  • 6 4.1.3. Market analysis If we assume that there are 100 clients in the market. So out of 100 clients, 70 clients (people) are fall under in second segment (more than one lac Rupees annual savings) and 30 clients are those people who fall under first segment (less than one lac Rupees annual savings). According to this assumption, there are lots of people who belong to second segment. So our first target would be to catch these people and second target would be to catch first segment people. Market analysis (pie chart) First segment (less than 1 lac rupees) 30 Second segment (more than 1 lac rupees) 70 4.1.4. Target Market Segment Strategy General Investment has chosen the previously mentioned target market segments because of the ideological beliefs and the fact that these beliefs translate into the customer groups needing services that General Investments can provide. People wants huge profit on their investment at any cost and in the market, there are lots of ways to get profits but these profits are not big enough to satisfy their desire and wants. For example, bank deposit, FD’s, mutual funds and PPF etc. but all these thing gives very low profit on their investment, 4 to 30 70 first segment second segment
  • 7 10% returns. That is not enough, now-a-days People want huge profit on their investment as soon as possible. And they are willing to invest their money in those companies’ product and services which give them high return on their investment. Therefore, General Investment has chosen these specific customer segments because it is a market group that has unmet needs. These groups have the money and willingness for an investment, yet their only current choice is a mutual fund, bank deposit, FD’s etc. General Investment has chosen to distinguish the two market segments by savings since this characteristic provides useful behavioral information regarding the different people. 4.1.5. Market Trends In the past, investors or people invested their money in Bank Fixed Deposits (FD), in Insurance policies, in Public Provident Fund (PPF), in Real Estate (but investment in real estate needs huge amount of money, which is not possible for everyone), in Stock Market and Mutual Funds (but most of the people don’t have the enough knowledge of stock market and mutual funds) etc. they invested their money in the financial markets only through a full-commission broker, who would offer investment advice and place trades. There focus was to earn the brokerage from the investor and investor invested their money at their own risk, profit and loss would be in the hand of investors. Broker was not responsible for your losses and it still happens and in other ways of investment gives you small profit on your investment after a long time. People don’t have the patience to wait for the profit for the long time. They want huge profit in short term. We give our clients good return on their investment within a year, which is risk free for them. Clients are not responsible for any losses, because we have a fix profit for the clients within a year, they will get at least 20-25% return on their investment, which is more than any bank deposit, PPF, FD’s etc. mainly our focus would be generate high profit 40% to 60% on their investment. People wants high return without taking risk and we are giving them that instrument.
  • 8 4.1.6. Market Growth There is a huge market growth for the company. Because people are getting much aware about investing in different things instead of putting money in the banks and all that. Now people invest their money in those things in which they can get fair returns. Inflation rate, unemployment, poverty and financial crisis are going up now-a-days. Things and services are more expensive. Consumers think many times before buying that product and service. Because prices are high and consumer don’t have enough money to buy that product and services. Investment gives them extra earning which helps them to make financially strong. 4.1.7. Service Business Analysis General Investment participates within the financial industry (stock market).We are an investment company, in which clients invest their money according to their power of investing. And we give the good return on their investment; there is no role of investor of buying and selling of the shares. We invest their money in the stock market on a daily basis (day trading). We trade in equity / shares. 4.1.8. Business Participants We have a tie up with one of the leading brokerage firm in Delhi. Because our business would be done through brokerage firm. This brokerage firm will give us trading terminal which will help us to trade in shares in an easy way. And it also gives us cheap brokerage plan which we have to pay on each transaction of the shares. 4.1.9. Strategy and Implementation After the introduction of the company, General investment intends to advertise aggressively to build awareness of our brand quality, customer service. We intend to market our services to individual investors by targeting through print, online, and other advertisements. Our strategy will be to position our website and services as a better way of accessing financial and market data, and strategizing on investments. Our advertising efforts are expected to include advertisements in financial publications and various other regional and national publications that have demographics similar to our target markets. We also intend to advertise and promote our business through Internet website banner advertisements.
  • 9 Our initial marketing efforts will be concentrated in Delhi. After getting popularity in Delhi, we can go to other states for the expansion of the company. 4.1.10. Marketing strategy Most of the companies use a combination of marketing strategies for promoting their business and building brand name awareness. We feel that our target demographic is an investment-savvy person. General Investment will use the following strategies in the promotion of the new business to the targeted demographic: Strategy 1 – making Business Relationships - We feel that making business relationship with the small and medium businesses will build our business. Strategy 2 - Web-based Promotions - Using banner advertising on financial and social networking websites will increase brand awareness to a much wider audience. Strategy 3 - Business Newspaper Advertising - Placing ads in noted financial newspapers directing investors and businessmen to the General Investment. Strategy 4 – print media – we will use print media like pamphlets, yellow pages and hoardings etc. to promote the business. The advertisements will be a steady way that people will become aware of the investment as well as some visibility for the company itself. 4.1.11. Competitive Edge We will give our client’s high returns on their investment better than any financial institutions. Our high returns distinguish us from other investment companies. Not only high returns but also our clients approach is distinguish us from others. 4.1.12. Sales Strategy We feel that sales will be directly proportional to the number of clients who invest in General Investment. Our target would be get at least 10 clients (total investment of 10 clients should be 5 lac Rupees) annually. We will try to get more clients every year with high investment. Important assumptions are highlighted below:
  • 10 Clients, who would invest less than 1 lac Rupees in the company, they will get at least 20 % returns on their investment. Clients, who would invest more than 1 lac Rupees in the company, they will get at least 25 % returns on their investment. Return on their investment would be given every year to our clients. Our focus would be generating high profit, 40-60% annual, on the client’s investment. So that, we can give them high returns. Client would pay 25% profit as a fee to the company on their profit. (negotiable) (Suppose if the client invests 1 lac rupees in the company and within a year, we give them 100% (1 lac Rs.) returns (profit) on their investment. then the client has to pay 25 % (25 thousand) of his or her returns and rest of the profit would be totally go to the client)
  • 11 4.2. Financial feasibility We are an Investment Company; our all operations are related to money. And when money comes into any business then it plays important roles. From the starting up of the business till generating profit, money always plays huge role. Each partner invests 5 lac rupees in the company. Our total initial investment is 30 lac Rupees. The following equipment will be needed for start up: Rented office Phone system (5 lines). Workstation computers (6), DSL Internet connection, and laser printer. Office furniture and T.V. Fax machine, copier, lighting, and assorted office supplies. Table -1 (Asset) Office furniture 200000 Rs. Workstation computers (6) 360000 Rs. (60000 Rs. Per system) Laser printer, fax machine, copier, T.V etc. 70000 Rs. Others 20000 Rs. Cash in bank 350000 Rs. Total 1000000 Rs. Table -2 (Expense) Office rent 20000*12 240000 Rs. Telephone bill 5000*12 60000 Rs. Electricity bill 10000*12 120000 Rs. Internet bill 5000*12 60000 Rs. Salary(partners and peon) 158000*12 1896000 Rs. Website 3000*12 36000 Rs. Advertisement --------- 300000 Rs. Office maintenance 2000*12 24000 Rs. Loan payment 23533.33*12 282400 Rs. Total 3018400 Rs.
  • 12 Table -3 (Salary) Partners (6) 150000*12 1800000 Rs. (25 thousand each per month) Peon (1) 8000*12 96000 Rs. Total 1896000 Rs. Table -4 (Investment) Asset 1000000 Rs. Investment in stock market 3000000 Rs. (each partner invests 5 lac Rs.) Total 4000000 Rs. Bank loan We have a bank loan of 10 lac rupees at the interest rate of 14.50%. Our duration will be 5 years to pay this loan. Table -5 (Start up) 3018400 1000000 4000000 1000000 0 500000 1000000 1500000 2000000 2500000 3000000 3500000 4000000 4500000 Expense Asset Investment loan
  • 13 How General Investment will generate the profit for the clients and itself? We have a tie up with a leading brokerage firm in Delhi, which gives us cheap brokerage (0.02% on day trading / intraday) plan and good margin money on our investment (margin money- Borrowed money that is used to purchase securities (shares). This practice is referred to as "buying on margin). Many brokerage firms give 10 times margin money on your total investment. And if you have good relationship with your brokerage firm, then they can give you 15 to 20 times margin money on your total investment. For example, we invest 30 lac rupees for buying shares through broker / brokerage firm. If our broker gives us 15 times margin money on our investment, which means 30 lac rupees (actual investment) would be now 4.5 Cr. Rupees. We can buy shares of 4.5 Cr. Rupees on that particular day. 30 lac * 15 times = 4.5Cr. Suppose, if we buy 1000 shares of any company at the cost of 1000 rupees per share, which means our total cost would be 10 lac rupees after buying 1000 shares of that company. 1000 shares * 1000 Rs. = 10 lac Now, we have a 4.5 Cr. Rupees, which means we can buy 1000 shares of 1000 Rs (10 lac), 45 times. 4.5 Cr. / 10 lac = 45 (times) It means we can buy 10 lac rupees shares by 45 times. Our analyst team would select suitable company’s stock everyday on the basis of shares volume, fluctuation of price etc.
  • 14 How will we generate profit through buying and selling the shares? Suppose, if we buy 1000 Shares of 1000 Rs. of any company after analyzing the company’s share. This buying will cost us 10 lac rupees. After buying those shares, if that share’s price goes up by 0.20 %, which means 2 rupees and we sell those 1000 shares of that company. Our profit would be 2000 Rs. on that transaction. Buy / Sell Volume price Price fluctuation Total cost Buy 1000 shares 1000 Rs. --------------------- 1000000 Rs. Sell 1000 shares 1002 Rs. Up by 0.20 % (2 Rs.) 1002000 Rs. Profit 2000 Rs. Share’s price can go up by 0.10% (1 Rs.), 0.30 % (3 Rs), 0.50% (5 Rs), and 1% (10 Rs) and so on, on that single day and the price can go down as well. But we have an instrument by which we can reduce our loss, that instrument is called stop loss order (stop loss order- An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit an investor's loss on a security position). Suppose, if we buy any company share and you have dilemmas about the share’s price that it can go up but it can go down also, at that time stop loss order can help us to reduce our loss) Suppose, we get average profit per transaction (buying and selling) is 1300 Rs. And if we trade 45 times, 1300 Rs. * 45 times = 58500 Rs (we get 58500 Rs. rupees on our 45 transaction in a single day) But risks of losses are always in this market, so we are deducting 18500 Rs. as a loss. Now we have 40000 Rs. as a profit but without paying brokerage and government taxes. In every transaction, we have to pay the brokerage to the broker and not only pay the brokerage but also we have to pay some government taxes
  • 15 like STT (Securities Transaction Tax), Service Tax, Education Cess, SEBI Charges etc.) -On every 10 lac transaction we have to pay almost 400 Rs including brokerage and all government taxes. -if the transaction happens 45 times, it means we have to pay 18000 Rs in a single day as a brokerage and taxes. After deducting the brokerage and the government taxes, we have a profit of 22000 Rs. (40000-18000 Rs = 22000 Rs.) Stock market opens 20 days in month, and if we trade 18 days in the stock market, and our profit is 22000 Rs. in a single day, so by the end of the month, we will have the profit of 396000 Rs. (22000 Rs*18 days = 396000) It means, we will have the estimated profit of 4752000 Rs. by the end of the year. Short Term Capital Gains tax (STCG tax): profits from sale of shares held for even less than 30 days are eligible to be treated as short term capital gains on which 15% tax has to be paid. We have to pay 15 % on our profit 4752000 Rs. 712800 Rs is the 15 % of the profit 4752000 Rs. Its means we have to pay 712800 Rs as a short term capital gain tax. After deducting the STCG tax, we will have a profit of 4039200 Rs. (4752000Rs.-712800Rs.) Profit after paying the expenses We have a first year expenses of our company, which is 3018400 Rs. annual. After deducting the expenses, company’s annual profit would be 1020800 Rs. (4039200-3018400 = 1020800 Rs) Net profit of the company after paying the government tax Company will have to pay corporate tax, which is around 32% of the profit. 32 % of the profit 1020800 Rs. would be 326656 Rs.
  • 16 We will have the net profit of the company after deducting the government tax, the profit is 694144 Rs. 694144 Rs. is the net profit of the company. (If we use 20 times margin money, that will increase our trading transaction 45 times to 60 times, then our net profit would be 1193536 Rs.) This profit has generated from only our investment because we are assuming that there is no client in first year of establishment. Because we are the new company. It will take time to get attention of the clients, if we get clients with huge investment, company’s profit would increase.
  • 17 4.3. Economic feasibility General Investment has started generating profit on its first year of establishment. That shows the company can generate profit not only for itself but for its clients as well. At the end of the first year, company net profit is 694144 Rs. which means company got 23.14% return on its 30 lac investment (ROI). It’s a healthy return for the first year. (If we take second estimation of net profit which was 1193536 Rs. it shows that company got 39.78% return on its 30 lac investment (ROI). It’s also a healthy return for the first year) All that profit shows that we can give good returns to our clients on their investment. They can trust us because we have a transparency in our profits. 4.4. Social Feasibility General investment is not only earning profit but also making other people wealthy. The company is giving its clients extra earnings, which helps them to fulfill their needs and desires. We are improving their financial status, so that they can fight against the inflation. Inflation decreases the value and importance of the money. Products and services cost become high. It effects on consumers buying power. We help them by giving good profit / returns on their investment, so that they can buy that product and service. General Investment makes other people life better, giving them financial freedom and good returns on their investment. This can make a contribution to promoting the national economy. We pay all taxes to the government as a responsible Indian company. We know our all responsibilities. After getting investors and popularity, we will expand our business in other cities also. This will generate employment for others. They will get job.
  • 18 Action plan General Investment will be opening in April, when financial year starts, once the finances are received from the bank and partners. To begin with General Investement will concentrate on making profit from the first day and the marketing aspect to target new clientele. We expect that after generating profit, we will be able to attract the clients into our company. We expect that within the three years, we would have adequate number of clients with good investment. As the client base increases, General investment‘s profit would also increase. After getting adequate clients, there would not be needed to spend lots of money on advertisement. It will increase the profit of the company and after paying off the bank loan in 5 year. Our company would be debt free. And whatever amount we paid to the bank, from now on, that amount would be added in the company’s profit.
  • 19 Thank You