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CHAPTER – 1
INTRODUCTION
1.1 Objectives of Study
1.2 Methodology
1.2.1 Research Design
1.2.2 Data collection sources
1.2.3 Sampling
1.2.4 Limitation
1.2.5 Research Design
1.2.6 Data collection
1.3 Profile of customer
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1.1 OBJECTIVES OF STUDY
The objectives of this study are as follows:-
PRIMARY OBJECTIVE:
 To create awareness among the customers of ICICI about various MUTUAL FUNDS and their
benefits through the online portal of ICICI.
 To understand the concept of mutual fund.
 To analyze the growth path of mutual fund sector in India.
 To know why one has invested or not invested in preferred Mutual fund.
SECONDARY OBJECTIVE:
 To get a general feedback from the customers about ICICI Mutual Fund investment and the online
portal.
 To conduct survey about Mutual Fund investments from existing customers of ICICI Securities
(Customers who have an ICICI Direct.com account).
 To make the customers understand that it is always better to invest or purchase Mutual Funds
online than offline.
 To make customer user friendly with the website of ICICI Direct.com
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1.2 RESEARCH METHODOLOGY
RESEARCH & METHODOLOGY
This report is based on primary as well secondary data, however primary data collection was given more
importance since it is overhearing factor in attitude studies. One of the most important users of research
methodology is that it helps in identifying the problem, collecting, analyzing the required information data
and providing an alternative solution to the problem .It also helps in collecting the vital information that is
required by the top management to assist them for the better decision making both day to day decision and
critical ones.
DATA SOURCES
Research is based on primary data as well as secondary data. Secondary data can be used only for the
reference. Research has been done by primary data collection, and primary data has been collected
personally. The secondary data has been collected through various journals and websites
SAMPLING
 SAMPLING PROCEDURE
The sample was selected randomly irrespective of them being investors or not or availing the services or
not. It was also collected through personal, by formal and informal talks and through filling up the
questionnaire prepared. The data has been analyzed by using mathematical/Statistical tool.
 SAMPLE SIZE
The sample size of my project is limited to 650 people only
 SAMPLE DESIGN
Data has been presented with the help of bar graph, pie charts, line graphs etc.
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LIMITATION
Some of the persons were not so responsive. Sample size is limited to 650 people including students,
working people, business man and others. The sample size may not adequately represent the whole
market. Some respondents were reluctant to divulge personal information which can affect the validity of
all responses. The research is confined to a certain part of Delhi NCR.
RESEARCH DESIGN
A research design is the master plan or model for the conduct of formal investigation and survey. It is a
specification of methods and procedures for acquiring the information needs for solving the problem. It
decides the source of information and methods for gathering the data. A questionnaire and other forms are
tested to use the collection of data. A sampling design is to be selected.
Good research design ensures that the information obtained is relevant to the research question and that it
was collected by objectives. Since research design is simply the framework of plan for a study, it is used
as a guide in collecting and analyzing the data. It is a blueprint that is followed in completing the research
study. My approach to research is descriptive. The major objective of the descriptive research is to
describe something – usually market features or functions.
DATA COLLECTION
Primary data will be collected through feedback form filled by the customer. Secondary data will be
obtained through company sources and other various internet sites.
PROFILE OF THE CUSTOMERS
 Customers were the investor who mostly likely to invest in Equity or Fixed deposit or there were
customers who had stopped investing in the market.
 Customers mostly prefer investing through online channels as mode of investment.
 The customers were already existing customers of ICICI company weather insurance, so this
database was used for cross sealing.
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CHAPTER – 2
ORGANIZATION
PROFILE
2.1 Introduction to ICICI Securities.
2.2 Stock Exchanges
2.3 ICICI Direct
2.3.1 ICICI Trading platform
2.3.2 ICICI Cash Brokerage
2.3.3 How to open a ICICI Direct A/c
2.3.4 Advantages & Disadvantages of ICICI Direct
2.4 SWOT Analysis
2.5 Taxation aspect of company
2.6 Achievements
2.7 Current market position
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2.1 INTRODUCTION TO ICICI SECURITIES.
The ICICI Securities is mainly dealing in the security market. The security market of India is very widely
spreaded and still it is growing at a good rate. The major institutions which are involved in the security
market are performing the role of the intermediaries for Buyers and Sellers in the market. The service
provided by the mediator is easy transaction between two parties. Before 1998 the security market was
dealing in physical format. There were share brokers who performed the job of the intermediaries between
the two parties. The main markets were the stock exchanges situated in different parts of the country. The
brokers were purchasing and selling the securities on behalf of the investors.
The stock broking industry is a service-oriented industry where brokers act as agents for investors when a
security is bought or sold and are compensated with a commission. Investors would not hesitate to switch
to alternative brokerage houses if they do not obtain satisfaction. Providing quality service and hence
customer satisfaction should thus be recognized as a key strategy and a crucial element of long-run
success and profitability for stock broking businesses.
ICICI Securities Limited provides various products and services to corporate, financial institutions, and
retail investors INDIA and internationally. It provides corporate finance services to corporations, financial
institutions, financial sponsors, and government, which include equity capital market products, such as
initial public offerings (IPO), further public offerings, rights offerings, convertible offerings, qualified
institutional placements, non-convertible debentures, buyback, delisting, and open offers and international
offerings for unlisted and listed entities. The company also offers mergers and acquisitions advisory
services; and private equity advisor.
ICICI Securities - Private Wealth Management
At ICICI Securities, we base our services on a simple yet powerful philosophy – we believe in building
long term relationships and partnering with them in legacies for generations to follow.
ICICI Securities - Retail
ICICI Securities empowers over 2 million Indians to seamlessly access the capital market with ICICI
Direct.com, an award winning and pioneering online broking platform.
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2.2 STOCK EXCHANGES
NATIONAL STOCK EXCHANGE {N.S.E.}:
NSE was set up in 1993 at Delhi to encourage stock exchange reforms through the system modernization
and competition. The NSE was following the screen based trading system. The system through which the
NSE is trading is known as the NEAT [National Exchange for Automated Trading.]. It allows members
across the country to trade simultaneously and with full efficiency. As on December 1996 there were
around 1200 companies traded on NSE. Out of 1200 companies only 535 companies were listed and rest
were permitted companies. The market capitalization as on January was 4.2 trillion. The total turnover of
the NSE as on January was around Rs. 2,16,000 crores. This was more than nine times than the turnover
of 1995, which was Rs. 27,000 crores.
BOMBAY STOCK EXCHANGE {B.S.E.}:-
The BSE is situated at Mumbai more popularly known as the ―DALAL STREET. As the Mumbai is the
trading capital of the nation, most of the companies prefer to list their shares in the BSE. The BSE had an
extra age over the NSE in number of the companies listed. As on December 1996, only 1200 companies
were traded on the NSE where as on BSE on the same day 5999 companies were traded. But since
November 1995 trading volumes on NSE is more than the BSE. The BSE is also a major party who has
contributed to the development of security market in India.
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2.3 ICICI DIRECT
ICICI direct is an online trading and investment platform on ICICI Securities, the largest stock broker
firm in India providing a wide range of investment options to the retail and institutional customers. ICICI
Securities is part of ICICI Group, India's top financial service provider offering banking and other
financial services.
ICICI Securities (I-Sec) is the top equity house in India with over 20 lakh customers. ICICI Direct.com is
the most visited investment portal in India and by NRI's living across countries. It is one website which
provides options to invest in over 20 financial products including Equity, Derivatives, Currency Futures,
IPO, Mutual Funds, ETF, Fixed Deposits, Loans, Tax Services, New Pension Systems and Insurance.
ICICI direct also provide current stock market information which includes stock prices, news, market
research reports, stocks tips, events, IPO News and company results. Its 'Centre for Financial Learning'
initiative offers number of online and classroom programs for investors. The 3-in-1 account, which
includes ICICI Bank Account, ICICI Direct Trading Account and ICICI Demat Account, is the best
offering for retail investors in India as it provides easiest way to invest in stock market and other financial
instruments. The customers can visit any of the over 1500 ICICI Bank branches to get help on financial
products which are sold through ICICI direct.
ICICI Direct.com is the largest equity house in the country providing end-to-end solutions (including web-
based services) through the largest non-banking distribution channel so as to fulfill all the diverse needs of
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retail and corporate customers. ICICI Direct.com has a dominant position in its core segments of its
operations – Corporate Finance including Equity Capital Markets Advisory Services, Institutional
Equities, Retail and Financial Product Distribution. With a full-service portfolio, a roster of blue-chip
clients and performance second to none, we have a formidable reputation within the industry. Today ICICI
Securities is among the leading Financial Institutions both on the institutional as well as retail side .ICICI
Direct.com, the step down wholly owned US subsidiary of the company is a member of the National
Association of Securities Dealers, Inc. (NASD). As a result of this membership, ICICI Securities Inc. can
engage in permitted activities in the U.S. securities markets. These activities include Dealing in Securities
and Corporate Advisory Services in the United States and providing research and investment advice to US
investors. ICICI Direct.com is also registered with the Financial Services Authority, UK (FSA) and the
Monetary Authority of Singapore (MAS).
ICICI DIRECT TRADING PLATFORMS
ICICI Direct offers 2 trading platforms to its customers:
1. Share Trading Account (Website Based Trading)
Website based online Share Trading Account by ICICI Direct is primarily for buying and selling of stocks
The ICICI Direct website allows Cash Trading, Margin Trading, Margin PLUS Trading, Spot Trading,
Buy Today Sell Tomorrow, IPO Investment, Mutual Fund Investment etc.
ICICI Direct.com website is the primary Investment vehicle of ICICI Limited.
2. Trade Racer (Trading Terminal)
Trade Racer is a power packed Trading platform which provides an investor with Live streaming quotes &
Research Calls, integrated fund transfer system along with multiple watch list facility. Investor can also do
technical analysis with the help advance charting tools. Single Order entry page for Equities and
Derivatives, Technical Analysis, Integrated Fund Transfer System, Customized Interface, Intra-day and
EOD Charts and Shortcut keys for faster access to markets are some of the key features of Trade Racer
Terminal.
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ICICI DIRECT CASH BROKERAGE
I - Saver Plan I - Secure Plan
Total Eligible
Turnover (Per
calendar Quarter)
Brokerage
(%)
Effective
Brokerage on
Intraday Square
off
Total Eligible
Turnover (Per
calendar Quarter)
Brokerage
(%)
Effective
Brokerage on
Intraday Square
off
Above Rs. 5 Crores 0.25 0.125%
Irrespective of
turnover
0.55 0.275%
Rs.2 Crores to 5
Crores
0.30 0.150%
Rs.1 Crores to 2
Crores
0.35 0.175%
Rs.50 Lakhs to 1
Crores
0.45 0.225%
Rs.25 Lakhs to 50
Lakhs
0.55 0.275%
Rs.10 Lakhs to 25
Lakhs
0.70 0.350%
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HOW TO OPEN ACCOUNT WITH ICICI SECURITIES PVT LTD.?
For Online Stock Trading with ICICI, investor needs to open 3 accounts...ICICI Bank Account, ICICI
Direct Trading Account and ICICI Demat Account (DP Account).All 3 accounts are essential for tradin
Note: If you already have a bank account or demat account with ICICI, you could link it with new ICICI
Direct trading account. All the features of new account will be separated with old account a/c to plan
taken.
Opening trading account with ICICI is easy. You could use one of the following options to open account
with ICICI Direct.
 Visit ICICI Direct.com and fill the "Open an Account" form.
 Call ICICI and tell them that you are interested in opening an account with them.
In both the cases ICICI representative contact you in a day or two and tell you about the procedure to open
the account. They usually send somebody to your home to collect documents, signature and for demo if
required.
Contact ICICI Direct / Request Call Back
Name: Phone #:
Email: City, State:
Are you a day trader?
ICICI DIRECT ADVANTAGES
1. 3-in-1 account integrates your banking, broking and demat accounts. All accounts are from ICICI
and very well integrated. This feature makes ICICI the most interesting player in online trading
facility. There is absolutely no manual interfere require. This is truly online trading environment.
2. Unlike most of the online trading companies in India which require transferring money to the
broker's pool or towards deposits, at ICICI Direct you can manage your own demat and bank
accounts through ICICI Direct.com. Money from selling stock is available in ICICI bank account
as soon as the ICICI Direct receive it.
3. Investment online in IPOs, Mutual Funds, GOI Bonds, and Postal Savings Schemes all from one
website. General Insurance is also available from ICICI Lombard.
4. Trading is available in both BSE and NSE.
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5. Low bandwidth website is available for slow internet connection or for trading from mobile
devices.
6. Through myGTC feature, you can place buy and sell limit orders in equity scripts of your choice;
specifying the period for which you want the order instruction to be valid.
ICICI DIRECT DISADVANTAGES
1. ICICI Direct brokerage is high and not negotiable.
2. ICICI Direct doesn't offer commodity trading. With ICICI Trading account you cannot trade at
MCX or NCDEX.
3. With ICICI Direct.com e-Invest account(3-IN-1 concept), the Demat Account has to be opened
with ICICI Bank Ltd as the Depository Participant (DP) and the Bank Account has to be opened
with ICICI Bank Ltd. as the Banker.
4. ICICI minimum brokerage change is Rs 35 per trade which is very high for traders who does small
trades.
BOARD OF DIRECTORS
ICICI Securities Limited.
 Ms. Chanda D. Kochhar,Chairperson
 Mr. Uday Chitale, Independent Director
 Mr. Vinod Kumar Dhall, Independent Director
 Ms. Zarin Daruwala
 Ms. Shilpa Kumar
 Mr. Anup Bagchi, Managing Director & CEO
 Mr. Ajay Saraf, Executive Director
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2.4 SWOT ANALYSIS
SWOT analysis is done by all the companies to be aware about the competitor and new changes in the
market. The SWOT analysis leads the company to take strategic decisions. Company always highlight its
strength, try to hide own weakness and in the same way try to find out strength and weakness of the
competitors.
S - Strength
Strength of the ICICI Securities is the main feature of the service. As it gives 3 in 1account to the
customer, the ease to trade at your convenient time is the main strength of the ICICI Direct. Following are
some of the strong points of the company. Convenience of time to trade Faster transaction Paperless
work 3 in 1 account facility so all work done at one place. The bank has strength of the latest technologies
and the most modern banking channels as net banking and the schemes such as young saver accounts also.
The young and energetic staff of the bank is also one of the strengths.
W-Weaknesses
Weakness of company is fond out to remove it and then make the product or service better than current
status. Each and every product and service has weakness. It is just like two side of the coin, if you have
strength then you have weakness. The weakness of the ICICI Direct.com can be said its high charges
compared to other companies.
O - Opportunity
Opportunity of the company is with the growth of volume of share trading and if company decides to
reduce the prices to some extent then a new market segment will come up as a customer of the service.
Jetpur, being the big industrial city of Saurashtra region the Bank has enough of opportunities to flourish
its business here. ICICI Bank can also grab the opportunity of establishing its market in then ear by towns
and villages by keeping their ATM machines and also by sending their marketing executives to these
remote places on some specific days.
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T - Threat
Threat for the company can be considered as following. Growing competition Change in government rules
which is negative for stock market Low prices of local brokers Low awareness of computer in public. The
other threat of the new entrants in the market will take up the share from them. Now a days many of the
financing companies are entering the Jetpur‘s market, which is one of the biggest threat for the Banks as
they provide the finance to the customers at very less rates and also at the quickest.
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2.5 TAXATION ASPECT OF COMPANY
ICICIDrect Tax services
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., with this also comes the pain of standing in long queues for
filing the tax returns timely.
You are Just 5 steps away from easing your Income Tax Worries:
1. Register for ICICI Direct TAX Services
2. Assess Tax Estimator and estimate your tax payable amount
3. Get your tax optimising investment options customised as per your life profile
4. Submit income & investment details and prepare your ITR instantly
5. File returns
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2.6 ACHEIVEMENTS OF THE COMPANY
Retail
 ICICI Direct.com, won the Outlook Money ' Best e- Brokerage Award' for 10th time in a row
in 2014. Previously, the firm won the award in 2004, 2005, 2007, 2008, 2009, 2010, 2011, 2012
and 2013.
 ICICI Direct won the Franchisor of the year award 2014
 ICICI Direct won the BSE - D&B Equity Broking Awards 2014
 ICICI Securities won the Award for Outstanding Social Impacts at the Global Sustainability
Leadership Awards 2014 These awards recognize institutions for their contribution to the society
in their domain as well as businesses that deliver products and services in ways that takes full
account of their responsibility towards the communities they touch.
 Ranked 2 at the THOMSON REUTERS STARMINE ANALYST AWARDS 2014 - TOP
BROKERS
 ICICI Securities was awarded the "MOST ADMIRED SERVICE PROVIDER IN FINANCIAL
SECTOR" at the BANKING FINANCIAL SERVICES & INSURANCE AWARDS 2014
presented by ABP News.
 ICICI Direct.com won the Mobbys award for the "Best Mobile application in Mobile
Trading".
 ICICI Securities Business Partners has been conferred the Franchise India Awards 2013, for
being the 'Franchisor of the year' in the Financial Services category.
 ICICI Direct.com, won the award for Innovation at Banking Frontiers Finnoviti Awards 2013.
The award was conferred on ICICI Direct's for its `Valid Till Cancel Order' (VTC ) facility, which
was awarded amongst the top 3 innovations in BFSI industry by 'Peer Voting'.
 ICICI Securities won the Outlook Smart use Technology eRetailer of the year 2013 conferred
by FIHL in association with HomeShop18.com.
 ICICI Direct.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.
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 ICICI Securities won the 'BSE IPF D&B Equity Broking Awards 2012' under two categories:
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
award recognises 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 was the winner of the 'Smart use Technology eRetailer of the year' 2012 award
conferred by Franchise India in association with UTV Bloomberg for the first time.
 ICICI Direct.com, won the Outlook Money ' Best e- Brokerage Award' seventh time in a row.
Previously, the firm won the award in 2004, 2005, 2007, 2008, 2009 and 2010.
 ICICI Securities' Business Partners (Sub Broker channel) won the 'Franchisor of the Year 2011'
for the third consecutive year.
 Anup Bagchi, MD & CEO has been honoured with the Zee Business 'Industry Newsmaker
Award 2010' for his tremendous and unmatched contribution in the field of Finance
 Pankaj Pandey, Head- Research - ICICI Direct has won the Zee Business Best Market Analyst
2010 award in the Equities Fundamental Category
 CMO Asia Awards for Excellence in Branding and Marketing 2010:
o Brand Leadership Award (overall)
o 'Campaign of the Year' for the Trade Racer Campaign
o Brand Excellence in Banking and Financial Services for the store format
o Award for Brand Excellence in the Internet Business
 Franchisor of the year award 2009
 Retail concept of the year awards 2009
 Frost and Sullivan 2009 Award for Customer Service Leadership
 ICICI Direct, the neighborhood financial superstore won the prestigious Franchise India `Service
Retailer of the Year 2008 award.
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 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
Institutional
 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 Finance Magazine
 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 Asiamoney.
Technology
 ICICI Securities Ltd was awarded the The Indian Merchants Chamber - IT Awards 2015 for the
category "End Users of IT" by the Indian Merchants? Chamber under the BFSI domain.
 ICICI Securities recently won the Innovation Award for Oracle Fusion Middleware.ICICI
Securities has consistently demonstrated the best usage of Oracle Tuxedo as an OLTP engine.
These Asia-Pacific awards honor customers for their optimum and innovative solutions using
Oracle Fusion Middleware.
 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
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 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 in 2012
 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 2010
 Indian Bank's Association Business Technology Awards was presented for Best Online Trading
Platform in 2006 and 2007
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2.7 CURRENT MARKET POSITION OF THE INDUSTRY
Following is the information on the stock price history of the stocks of ICICI group. These prices are
filtered out for the past 1 year w.e.f 1st April, 2016
Prices
Date Open High Low Close Avg Vol Adj Close*
1 Apr, 2016 236.00 239.45 232.70 238.30 28,504,200 238.30
1 Mar, 2016 195.25 241.35 195.25 236.65 17,671,600 236.65
1 Feb, 2016 227.00 227.35 180.75 190.05 27,768,100 190.05
1 Jan, 2016 261.30 263.60 217.80 230.15 17,160,400 230.15
1 Dec, 2015 275.05 276.75 243.05 261.35 10,516,200 261.35
2 Nov, 2015 277.00 282.70 256.00 274.75 9,610,200 274.75
1 Oct, 2015 273.45 292.70 266.05 277.00 8,784,000 277.00
1 Sep, 2015 275.00 285.35 247.70 270.35 14,248,200 270.35
3 Aug, 2015 304.45 319.80 267.15 277.90 14,319,000 277.90
1 Jul, 2015 308.70 321.00 282.70 302.40 13,321,300 302.40
04-Jun-2015 5.00 Dividend
1 Jun, 2015 317.00 320.40 280.35 308.00 15,722,300 308.00
1 May, 2015 331.15 338.00 300.60 317.25 11,267,400 311.89
1 Apr, 2015 315.00 334.80 296.70 331.15 11,932,300 325.55
According to the above table the stock prices are showing the upward trend in last few months after
recovering from major fall in September last year (2015). The average volume of the stocks has been
continuously increasing from 10,516 to 28,504 from January 2016 to April 2016.
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As far as competitors are concerned following is the table which shows the comparison between stock
price of ICICI group and its competitors.
According to it ICICI has maintained its competitive position in the past over most its competitors and is
projected to maintain so in near future.
Competition
Name Last Price Market Cap.
(Rs. cr.)
Net Interest
Income
Net Profit Total Assets
HDFC Bank 1,092.15 276,115.89 48,469.91 10,215.92 590,503.07
ICICI Bank 252.00 146,541.61 49,091.14 11,175.35 646,129.29
Kotak Mahindra 676.10 124,023.83 9,719.87 1,865.98 106,012.08
Axis Bank 475.85 113,440.02 35,478.60 7,357.82 461,932.39
IndusInd Bank 981.50 58,400.15 11,580.66 2,286.45 109,115.92
Yes Bank 875.75 36,847.60 11,572.00 2,005.36 136,170.42
ING Vysya Bank 1,027.00 19,719.13 5,205.22 657.85 60,413.23
IDFC Bank 53.80 18,264.28 -- -2.58 0.05
Federal Bank 47.40 8,148.42 7,419.46 1,005.75 82,850.47
City Union Bank 94.80 5,680.88 2,698.86 395.02 27,871.13
Karur Vysya 464.75 5,663.65 5,395.87 464.28 53,152.49
JK Bank 72.85 3,531.61 7,061.13 508.60 76,085.46
DCB Bank 98.00 2,788.58 1,422.42 191.18 16,132.30
South Ind Bk 18.25 2,464.31 5,286.22 307.20 59,116.32
Karnataka Bank 112.90 2,127.86 4,698.42 451.45 51,836.60
Lakshmi Vilas 81.90 1,469.79 2,214.53 132.29 24,705.43
StanChart IDR 52.50 630.00 - - 131,000.95
Dhanlaxmi Bank 20.00 354.88 1,283.59 -241.47 14,351.90
Goldman BEES 2,669.80 273.93 -- -- -
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CHAPTER – 3
LITERATURE
REVIEW
3.1 A study on Mutual Funds
3.1.1 Introduction
3.1.2 How do Mutual Funds Work?
3.1.3 Advantages & Disadvantages of Mutual Funds
3.1.4 Majors mutual funds in India
3.2 ICICI Direct and its product line
3.3 Competitors and ICICI Direct
3.4 Current status of industry
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3.1 A STUDY ON MUTUAL FUND
In few years Mutual Fund has emerged as a tool for ensuring one’s financial well being. Mutual Funds
have not only contributed to the India growth story but have also helped families tap into the success of
Indian Industry. As information and awareness is rising more and more people are enjoying the benefits of
investing in Mutual Funds.
The main reason the number of retail mutual fund investors remains small is that nine out of ten people
with incomes in India do not know that mutual funds exist. But once people will be aware of mutual fund
investment opportunities, the number who decide to invest in mutual funds increases may increase to as
many as one in five people. The trick for converting a person with no knowledge of mutual funds to a new
Mutual Fund customer is to understand which of the potential investors are more likely to buy mutual
funds and to use the right arguments in the sales process that customers will accept as important and
relevant to their decision.
This Project gave me a great learning experience and at the same time it gave me enough scope to
implement my analytical ability. The analysis and advice presented in this Project Report is based on
market research on the awareness of mutual funds among ICICI customers and preferences of the
investors for investment in Mutual Funds. This Report will help to know about the investors’ Preferences
in Mutual Fund means Are they prefer any particular Asset Management Company (AMC), Which type of
Product they prefer, Which Option (Growth or Dividend) they prefer or Which Investment Strategy they
follow (Systematic Investment Plan or One time Plan). This Project as a whole can be divided into two
parts.
The first part gives an insight about Mutual Fund and its various aspects, the Company Profile, Objectives
of the study, Research Methodology. One can have a brief knowledge about Mutual Fund and its basics
through the Project.The second part of the Project consists of data and its analysis collected through
survey done on 98 peoples. For the collection of secondary data I made a questionnaire and surveyed of 98
peoples. The data collected has been well organized and presented. I hope the research findings and
conclusion will be of use.
24
MUTUAL FUNDS: DEFINITION
An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of
investing in securities such as stocks, bonds, money market instruments and similar assets. Mutual funds
are operated by money managers, who invest the fund's capital and attempt to produce capital gains and
income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the
investment objectives stated in its prospectus.
MUTUAL FUNDS: AN INTRODUCTION
A Mutual Fund is an investment tool that allows small investors access to a well-diversified portfolio of
equities, bonds and other securities. Each shareholder participates in the gain or loss of the fund. Units are
issued and can be redeemed as needed. The fund's Net Asset Value (NAV) is determined each day. The
income earned through these investments and the capital appreciations realized are shared by its unit
holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable
investment for the common man as it offers an opportunity to invest in a diversified, professionally
managed basket of securities at a relatively low cost.
FIG 1.1
25
3.1.2 HOW DOES A MUTUAL FUND WORK
Mutual funds are financial intermediaries, which collect the savings of investors and invest them in a large
and well-diversified portfolio of securities such as money market instruments, corporate and government
bonds and equity shares of joint stock companies.
Mutual funds are conceived as institutions for providing small investors with avenues of investments in
the capital market.
Since small investors generally do not have adequate time, knowledge, experience and resources for
directly accessing the capital market, they have to rely on an intermediary, which undertakes informed
investment decisions and provides consequential benefits of professional expertise.
26
3.1.3 TYPE OF MUTUAL FUND SCHEMES
Open Ended Schemes:
An open-end fund is one that is available for subscription all through the year and is not listed on the stock
exchanges. The majority of mutual funds are open-end funds. Investors have the flexibility to buy or sell
any part of their investment at any time at a price linked to the fund's Net Asset Value.
Close Ended Schemes:
A closed-end fund has a fixed number of shares outstanding and operates for a fixed duration (generally
ranging from 3 to 15 years). The fund would be open for subscription only during a specified period and
there is an even balance of buyers and sellers, so someone would have to be selling in order for you to be
able to buy it. Closed-end funds are also listed on the stock exchange so it is traded just like other stocks
on an exchange or over the counter. Usually the redemption is also specified which means that they
terminate on specified dates when the investors can redeem their units.
Interval Schemes:
Interval Schemes are that scheme, which combines the features of open-ended and close-ended schemes.
The units may be traded on the stock exchange or may be open for sale or redemption during pre-
determined intervals at NAV related prices.
Based on their investment objective:
Equity Funds:
Equity schemes endeavor to provide potential for high growth and returns with a moderate to high risk by
investing in shares. Such schemes are either actively or passively (replicate indices) managed, and are best
suited for investors with a long term investment horizon
These funds invest in equities and equity related instruments. With fluctuating share prices, such funds
show volatile performance, even losses. However, short term fluctuations in the market, generally
smoothens out in the long term, thereby offering higher returns at relatively lower volatility. At the same
time, such funds can yield great capital appreciation as, historically, equities have outperformed all asset
classes in the long term.
27
Balanced fund:
A mutual fund that buys a combination of common stock, preferred stock, bonds, and short-term bonds, to
provide both income and capital appreciation while avoiding excessive risk. The purpose of balanced
funds (also sometimes called hybrid funds) is to provide investors with a single mutual fund that combines
both growth and income objectives, by investing in both stocks (for growth) and bonds (for income). Such
diversified holdings ensure that these funds will manage downturns in the stock market without too much
of a loss; the flip side, of course, is that balanced funds will usually increase less than an all-stock fund
during a bull market .
Balanced funds are the ideal mutual funds vehicle for investors who prefer spreading their risk across
various instruments.
Following are balanced funds classes:
i) Debt-oriented funds -Investment below 65% in equity.
ii) Equity-oriented funds-Invest at least 65% in equities, remaining in debt
Debt fund:
This fund invests in fixed income instruments such as debentures (bonds), Treasury Bills etc. Preferred by
investors who want steady income and not willing to take much of risk. They invest only in debt
instruments, and are a good option for investors averse to idea of taking risk associated with equities.
Therefore, they invest exclusively in fixed-income instruments like bonds, debentures, Government of
India securities; and money market instruments such as certificates of deposit (CD), commercial paper
(CP) and call money. Put your money into any of these debt funds depending on your investment horizon
and needs.
i) Liquid funds- These funds invest 100% in money market instruments, a large portion being invested in
call money market.
ii) Gilt funds ST- They invest 100% of their portfolio in government securities of and T-bills.
iii) Floating rate funds - Invest in short-term debt papers. Floaters invest in debt instruments which have
variable coupon rate.
28
iv) Arbitrage fund- They generate income through arbitrage opportunities due to mis-pricing between cash
market and derivatives market. Funds are allocated to equities, and money markets. Higher proportion
(around 75%) is put in money markets, in the absence of arbitrage opportunities.
ADVANTAGES & DISADVANTAGES OF INVESTING IN MUTUAL FUNDS:
For investments in mutual fund, one must keep in mind about the Pros and cons of investments in mutual
fund.
ADVANTAGES OF INVESTING MUTUAL FUNDS:
 Affordability: As mutual funds are available in units, one can initially opt for a regular investment
plan contributing few hundred rupees per month
 Professional Management: A mutual fund offers the expertise of professional fund managers who,
with their skills and knowledge, are able to understand market trends and invest accordingly
o Diversification: Rather than investing in one or a few instruments, a mutual fund invests in
a basket of instruments which matches its investment objective. For instance, in case of an
equity diversified fund, the investment is spread across multiple industries / sectors and
companies. As a mutual fund investor, you are able to access a diversified investment
portfolio with a sum of as little as Rs. 500, which would otherwise not be possible
 Convenience and Flexibility: Mutual fund operations like purchase, redemptions, switching
between funds of the same fund house, etc. are relatively simple. Moreover, Mutual funds offer
you the flexibility of tailoring your investment program with facilities like Systematic Investment
Plans (SIPs), Systematic Transfer Plans (STPs) and Systematic Withdrawal Plans (SWPs)
explained later.
 Cost Effectiveness: Economies of scale, achieved by pooling of investors' funds, lowers the costs
of investing for an investor. Such lower costs make a huge impact cumulatively over longer time
horizons.
29
 Liquidity: Mutual fund units are highly liquid, since open ended funds may be redeemed with the
Mutual fund on any working day and closed ended funds may be sold in the market at the
prevailing prices. Only tax saving and some close ended funds have lock in periods.
 Tax Efficient: Mutual funds offer better tax benefits as compared to many other investment
avenues.
 Transparency: Mutual Funds are legally bound to disclose their portfolios at periodical intervals
which keep the investor fully informed of where his money has been invested. Moreover, all the
mutual funds are registered with SEBI, a regulatory body which ensures that the investors' interests
are protected.
BENEFITS OF MUTUAL FUNDS
DISADVANTAGES OF INVESTING MUTUAL FUNDS:
Professional Management- Some funds doesn’t perform in neither the market, as their management is
not dynamic enough to explore the available opportunity in the market, thus many investors debate over
whether or not the so-called professionals are any better than mutual fund or investor himself, for picking
up stocks.
30
Costs – The biggest source of AMC income, is generally from the entry & exit load which they charge
from an investors, at the time of purchase. The mutual fund industries are thus charging extra cost under
layers of jargon.
Dilution - Because funds have small holdings across different companies, high returns from a few
investments often don't make much difference on the overall return. Dilution is also the result of a
successful fund getting too big. When money pours into funds that have had strong success, the manager
often has trouble finding a good investment for all the new money.
Taxes - when making decisions about your money, fund managers don't consider your personal tax
situation. For example, when a fund manager sells a security, a capital-gain tax is triggered, which affects
how profitable the individual is from the sale. It might have been more advantageous for the individual to
defer the capital gains liability.
31
MAJOR MUTUAL FUND COMPANIES IN INDIA
Birla Sun Life Mutual Fund
Birla Sun Life Mutual Fund is the joint venture of Aditya Birla Group and Sun Life Financial. Sun Life
Financial is a global organization evolved in 1871 and is being represented in Canada, the US, the
Philippines, Japan, Indonesia and Bermuda apart from India. Birla Sun Life Mutual Fund follows a
conservative long-term approach to investment. Recently it crossed AUM of Rs. 10,000 crores.
Bank of Baroda Mutual Fund (BOB Mutual Fund)
Bank of Baroda Mutual Fund or BOB Mutual Fund was setup on October 30, 1992 under the sponsorship
of Bank of Baroda. BOB Asset Management Company Limited is the AMC of BOB Mutual Fund and was
incorporated on November 5, 1992.
HDFC Mutual Fund
HDFC Mutual Fund was setup on June 30, 2000 with two sponsors namely Housing Development
Finance Corporation Limited and Standard Life Investment Limited.
Prudential ICICI Mutual Fund
The mutual fund of ICICI is a joint venture with Prudential Plc. of America, one of the largest life
insurance companies in the US of A. Prudential ICICI Mutual Fund was setup on 13th of October, 1993
with two sponsors, Prudential Plc. and ICICI Ltd. The Trustee Company formed is Prudential ICICI Trust
Ltd. and the AMC is Prudential ICICI Asset Management Company Limited incorporated on 22nd of
June, 1993.
Sahara Mutual Fund:
Sahara Mutual Fund was set up on July 18, 1996 with Sahara India Financial Corporation Ltd. the
sponsor. Sahara Asset Management Company Private Limited incorporated on August 31, 1995 works as
the AMC of Sahara Mutual Fund. The paid-up capital of the AMC stands at Rs 25.8crore.
32
State Bank of India Mutual Fund
State Bank of India Mutual Fund is the first Bank sponsored Mutual Fund to launch offshore fund, the
India Magnum Fund with a corpus of Rs. 225 cr. approximately. Today it is the largest Bank sponsored
Mutual Fund in India. They have already launched 35 Schemes out of which 15 have already yielded
handsome returns to investors. State Bank of India Mutual Fund has more than Rs. 5,500 Crores as AUM.
Now it has an investor base Of over 8 Lakhs spread over 18 schemes.
Tata Mutual Fund :
Tata Mutual Fund (TMF) is a Trust under the Indian Trust Act, 1882. The sponsors for Tata Mutual Fund
are Tata Sons Ltd., and Tata Investment Corporation Ltd. The investment manager is Tata Asset
Management Limited and its Tata Trustee Company Pvt. Limited. Tata Asset Management Limited's is
one of the fastest in the country with more than Rs. 7,703 crores (as on April 30,2005) of AUM.
Kotak Mahindra Mutual Fund
Kotak Mahindra Asset Management Company (KMAMC) is a subsidiary of KMBL. It is presently having
more than 1,99,818 investors in its various schemes. KMAMC started its operations in December 1998.
Kotak Mahindra Mutual Fund offers schemes catering to investors with varying risk - return profiles. It
was the first company to launch dedicated gilt scheme investing only in government sector
Unit Trust of India Mutual
UTI Asset Management Company Private Limited, established in Jan 14, 2003, manages the UTI Mutual
Fund with the support of UTI Trustee Company Private Limited. UTI Asset Management Company
presently manages a corpus of over Rs.20000 Crore. The sponsors of UTI Mutual Fund are Bank of
Baroda (BOB), Punjab National Bank (PNB), State Bank of India (SBI), and Life Insurance Corporation
of India (LIC). The schemes of UTI Mutual Fund are Liquid Funds, Income Funds, Asset Management
Funds, Index Funds, equity and Balance Funds.
33
COMPANIES PROVING MUTUAL FUNDS
34
3.2 ICICI DIRECT AND ITS PRODUCT LINE
PRODUCTS LINE
ICICI Securities is mainly dealing with share, stock, government bond, mutual fund and IPO (initial
public offer). ICICI Securities is providing mainly three type of product with different facilities. The core
product of ICICI Securities is demat account. ICICI Securities is providing the core product with extra
service of online share trading to its customer as per their requirement. There are three type of account in
ICICI Securities. They are as follow:
1. Simple demat account
2. Wise investment
3. Direct.com
1. Simple DematAccount
The simple demat account is the most simple form of ICICI Securities product. It gives a demat account to
account holder. The customer can purchase and sell the share, government bond, and debenture. In this
account the customer is suppose to deal in share market with the help of broker. Following are the
regulatory aspects of simple demat account. Customer can deal only with help of broker. No online share
trading is allowed. Account opining charge is Rs. 750If customer does not have saving account in ICICI
Bank then he or she has to deposit Rs.5000 in the bank. Statement of demat account is given free of cost to
the customer per quarter and if he or she wants monthly statement than Rs. 200 is charge per annum
Charges:
Account opening charge is Rs. 750Per purchase customer has to pay 0.02% of the amount of purchase.
Minimum Rs. 20Per sale customer has to pay 0.04% of the amount of sale. Minimum Rs.20Maintains
charge of demat account is Rs. 350 per annum. Script maintains charge 0.75 paisa per script per month.
Trade rejection charge is Rs. 50 per transaction rejected.
Limitation:
Online share trading is not available. Transaction speed is very low compare to online share trading. Other
competitors are providing the same service at lower rate.
35
2. Wise InvestmentAccount
The Wise Investment Account is somewhat advanced version of simple demat account. This account gives
the customer the freedom of doing online trading in Government bonds, Initial Public Offers and Mutual
funds. Again here the main trading system is through the broker only.
Charges:
Account opining charge is Rs. 500Per purchase customer has to pay 0.02% of the amount of purchase.
Minimum Rs. 20 Per sale customer has to pay 0.04% of the amount of sale. Minimum Rs.20 Maintains
charge of demat account is Rs. 350 per annum. Script maintains charge 0.75 paisa per script per month.
Trade rejection charge is Rs. 50 per transaction rejected. A saving account in ICICI BANK is necessary.
Limitation:
Online trading in equity is not allowed. Transaction time is longer than online trading. Portfolio is
managed by broker, not by our self. Unnecessary investment of Rs 5000 as balance in saving account.
3. Direct.com
The most advanced version of share trading is ―Direct.com‖. It allows the trading through internet and
gives totally paperless work. It is the most effective way of doing the share trading. ―Direct.com‖
allows the customer to work at his own. Means it removes the broker and a terminal is given in hand of
customer.
36
3.3 ICICI DIRECT AND ITS COMPETETORS
ICICI Securities is providing share trading facilities. The ICICI was the 1st in India to introduce concept
of online share trading. Now in the market there are few players who are providing the share trading
facilities. Some of them are mentioned below who are providing some competition in the market.
1. HDFC Securities:-
HDFC bank is also one of the growing bank in India. It has also given new definition to banking services
with providing extra services than the traditional banking services. HDFC was in housing finance initially
but in last few years it has widen its scope of working area. It has entered in almost all the sectors in which
ICICI is dealing. HDFC is providing the demat account to its customers. The HDFC is not providing the
online share trading like ICICI. Here it stays slightly behind the ICICI bank.
2.Kotak Street:-
Kotak Street is also emerging as a good competitor to all the share trading service providing company. It
is also entering in the all the financial services like the ICICI and HDFC bank. The Kotak Street is
relatively new compared to ICICI and HDFC inthe field of share trading. Initially when the Kotak group
had not entered in banking field it had collaboration with HDFC for the saving accounts of the customers
who had or wanted to open the share trading account with the Kotak street. But now as the Kotak group
has its own bank, all the saving accounts are opened in the Kotak bank. The Kotak group has also entered
in the field of insurance with name―OM KOTAK MAHINDRA LIFE INSURANCE‖. The Kotak group
has also entered in the MUTUAL FUND sector also.
3. India bulls
India bulls are also one of the companies which is providing the share trading facility. It is a company
which is providing the share trading facility only. It does not provide any saving account facility to its
customer.
37
4. MotilalOswal
MotilalOswal is also one of the competitiors of ICICI direct.com. This Company is also providing online
trading facilities with which customer can save their time and they will operate the programme on their
computer.
5. Marwadi
This unit has paved their feet in each and every town because of the cheaper rate of its brokerage. They
are not providing unlimited facility for trading.
6. 5paisa.com
5Paisa is the trade mane of India Info line Securities Private Limited (5paisa), member of National Stock
Exchange and The Stock Exchange, Mumbai. 5paisa is a wholly owned subsidiary of India Info line Ltd.
India‘s leading and most popular finance and investment portal. 5paisa has emerged as one of leading
players in e-broking space in India
7. Sharekhan
Sharekhan, India‘s leading stock broker is the retail arm of SSKI , and offers you depository services and
trade execution facilities for equities, derivatives and commodities backed with investment advice
tempered by decades of broking experience.
38
COMPETITORS AND COMPARISON
This is the side-by-side comparison of ICICI Securities Pvt Ltd. and India Infoline Limited stock brokers
in India. The comparison below highlights the similarities and differences between ICICI Direct and India
Infoline (IIFL)'s brokerage, customer service, maintenance fees, tools and investment options provided to
India Stock Market investors. If you are confused in choosing the best broking site, this page is to help
you find which is the best broker among ICICI Direct and India Infoline (IIFL).
About the
Broker
ICICI Direct is an online trading and
investment platform on ICICI
Securities, the largest stock broker
firm in India providing a wide range
of investment options to the retail
and institutional customers.
Incorporated in 1995, India Infoline (IIFL)
is the brokerage firm of India Infoline
Group, a fastest growing financial services
solution provider in India. India Infoline is
listed on BSE (532636) and NSE
(INDIAINFO) for securities trading.
Type of Broker Full Service Broker Full Service Broker
Account Type 3-in-1 Account (I-Secure Plan) Standard Account
Trading
Account
Opening Fees
Rs 975 Rs 750
Trading
Account AMC
Nil
Demat Account
Opening Fees
Nil Rs 555
Demat Account
AM
Rs 450 Rs 300
39
The comparison below highlights the similarities and differences between ICICI Direct and Angel Trade's
brokerage, customer service, maintenance fees, tools and investment options provided to India Stock
Market investors.
About the
Broker
ICICI Direct is an online trading and
investment platform on ICICI
Securities, the largest stock broker
firm in India providing a wide range
of investment options to the retail
and institutional customers.
Angel Group has emerged as one of the
top 3 retail broking houses in India.
Incorporated in 1987, it has memberships
on BSE, NSE and the two leading
commodity exchanges in India i.e.
NCDEX & MCX.
Type of Broker Full Service Broker Full Service Broker
Supported
Exchnage
BSE, NSE BSE, NSE, MCX
Account Type 3-in-1 Account (I-Secure Plan) Angel Diet
Trading
Account
Opening Fees
Rs 975 Rs 0
Trading
Account AMC
Nil Rs 347
Demat Account
Opening Fees
Nil Rs 0
Demat Account
AM
Rs 450 Rs 0
40
The comparison below highlights the similarities and differences between ICICI Direct and HDFC
securities's brokerage, customer service, maintenance fees, tools and investment options provided to India
Stock Market investors.
About the
Broker
ICICI Direct is an online trading
and investment platform on ICICI
Securities, the largest stock broker
firm in India providing a wide
range of investment options to the
retail and institutional customers.
HDFC Securities(HDFCsec) is Equity
Trading Company of HDFC Bank.
HDFC Securities provide both online
trading and trading on phone. The
HDFC Securities trading account has a
unique 3-in-1 feature that integrates
your HDFC Securities
Type of Broker Full Service Broker Full Service Broker
Supported
Exchnage
BSE, NSE BSE, NSE
Account Type 3-in-1 Account (I-Secure Plan) Online Trading
Trading
Account
Opening Fees
Rs 975
Rs 999
Trading
Account AMC
Nil
Demat
Account
Opening Fees
Nil Nil
Demat
Account AM
Rs 450 Rs. 750
41
The comparison below highlights the similarities and differences between ICICI Direct and Indiabulls's
brokerage, customer service, maintenance fees, tools and investment options provided to India Stock
Market investors.
About the
Broker
ICICI Direct is an online trading and
investment platform on ICICI
Securities, the largest stock broker
firm in India providing a wide range
of investment options to the retail
and institutional customers.
Indiabulls Securities (ISL) is the India-
based Stock Broker. ISL is part of
Indiabulls Group, a leading business
house in India with businesses spread
across many sectors including
Infrastructure, Power, Real Estate and
Financial Services
Type of Broker Full Service Broker Full Service Broker
Supported
Exchnage
BSE, NSE BSE, NSE,
MCX, NCDEX
Account Type 3-in-1 Account (I-Secure Plan) Power Indiabulls
Trading
Account
Opening Fees
Rs 975 Rs 950
Trading
Account AMC
Nil Nil
Demat Account
Opening Fees
Nil Nil
Demat Account
AM
Rs 450 Rs. 450
42
The comparison below highlights the similarities and differences between ICICI Direct and sharekhan's
brokerage, customer service, maintenance fees, tools and investment options provided to India Stock
Market investors.
About the
Broker
ICICI Direct is an online trading and
investment platform on ICICI
Securities, the largest stock broker
firm in India providing a wide range
of investment options to the retail
and institutional customers.
Incorporated in February 2000, Sharekhan
is India's 2nd largest stock broker
providing brokerage services through its
online trading website Sharekhan.com and
1950 Share shops which includes branches
& Franchises in more than 575 cities
across India.
Type of Broker Full Service Broker Full Service Broker
Supported
Exchnage
BSE, NSE BSE, NSE,
MCX, NCDEX,
NSEL
Account Type 3-in-1 Account (I-Secure Plan) Classic Account
Trading
Account
Opening Fees
Rs 975 Rs. 750
Trading
Account AMC
Nil Rs. 400
Demat Account
Opening Fees
Nil Rs. 0
Demat Account
AM
Rs 450 Rs. 400
43
The comparison below highlights the similarities and differences between ICICI Direct and
KotakSecurities's brokerage, customer service, maintenance fees, tools and investment options provided to
India Stock Market investors. If you are confused in choosing the best broking site, this page is to help
you find which is the best broker among ICICI Direct and Kotak Securities.
About the
Broker
ICICI Direct is an online trading and
investment platform on ICICI
Securities, the largest stock broker
firm in India providing a wide range
of investment options to the retail
and institutional customers.
Incorporated in 1994, Kotak Securities is a
full services broker part of popular India
based Kotak Mahindra Bank. The bank
has over 1400 branches across India
servicing more than 8 lakh customers
Type of Broker Full Service Broker Full Service Broker
Supported
Exchnage
BSE, NSE BSE, NSE, MCX-SX, MCX, NCDEX
Account Type 3-in-1 Account (I-Secure Plan) Kotak Gateway
Trading
Account
Opening Fees
Rs 975 Rs. 750
Trading
Account AMC
Nil Nil
Demat Account
Opening Fees
Nil Nil
Demat Account
AM
Rs. 450 Rs. 600
44
3.4 CURRENT POSITION OF INDUSTRY
The security market in India has developed a lot in last 5 to 7 years. The developments due to the
increasing awareness among the people; developing communication almedia and most importantly change
in the way of transaction i.e. on line trading of securities. BSE Online Share Trading ―B.O.L.T.‖ has
brought revolution in the security market. Introduction of private banks in security market dealing and real
estate business have brought the efficiency and competition in the market. Mutual funds are also one of
the major elements which have influenced the growth of security market. Foreign Investment Institution
[F.I.I.] and Foreign Direct Investment [F.D.I.] has also contributed in the growth of the security market in
India. Currently in the security market following securities are been traded by the investors, institutional
buyers and foreign investors. Shares [Equity shares & preference shares ] Debentures Government Bonds
Mutual Funds Commercial papers
The main feature of today‘s market is the Dematerialized form of almost all securities.
Previously the securities were available in materialized form i.e. in papers but now it is available in
Dematerialized form. It means securities are not given in paper format but in ELECTRONIC format it is
been directly credited in purchaser‘s demat account.
RECENT TRENDS IB MUTUAL FUNDS MARKET
The most important trend in the mutual fund industry is the aggressive expansion of the foreign owned
mutual fund companies and the decline of the companies floated by nationalized banks and smaller private
sector players.
Many nationalized banks got into the mutual fund business in the early nineties and got off to a good start
due to the stock market boom prevailing then. These banks did not really understand the mutual fund
business and they just viewed it as another kind of banking activity. Few hired specialized staff and
generally chose to transfer staff from the parent organizations. The performance of most of the schemes
floated by these funds was not good. Some schemes had offered guaranteed returns and their parent
organizations had to bail out these AMCs by paying large amounts of money as the difference between the
guaranteed and actual returns. The service levels were also very bad. Most of these AMCs have not been
45
able to retain staff, float new schemes etc. and it is doubtful whether, barring a few exceptions, they have
serious plans of continuing the activity in a major way.
The experience of some of the AMCs floated by private sector Indian companies was also very similar.
They quickly realized that the AMC business is a business, which makes money in the long term and
requires deep-pocketed support in the intermediate years. Some have sold out to foreign owned
companies, some have merged with others and there is general restructuring going on.
They can be credited with introducing many new practices such as new product innovation, sharp
improvement in service standards and disclosure, usage of technology, broker education and support etc.
In fact, they have forced the industry to upgrade itself and service levels of organizations like UTI have
improved dramatically in the last few years in response to the competition provided by these.
PERFORMANCE(MF’S)
Let us start the discussion of the performance of mutual funds in India from the day the concept of mutual
fund took birth in India. The year was 1963. Unit Trust of India invited investors or rather to those who
believed in savings, to park their money in UTI Mutual Fund. The performance of mutual funds in India in
the initial phase was not even closer to satisfactory level. People rarely understood, and of course
investing was out of question. But yes, some 24 million shareholders were accustomed with guaranteed
high returns by the beginning of liberalization of the industry in 1992. This good record of UTI became
marketing tool for new entrants. The expectations of investors touched the sky in profitability factor.
However, people were miles away from the preparedness of risks factor after the liberalization.
The Assets under Management of UTI was Rs. 67bn. by the end of 1987. Let me concentrate about the
performance of mutual funds in India through figures. From Rs. 67bn. the Assets Under Management rose
to Rs. 470 bn. in March 1993 and the figure had a three times higher performance by April 2004. It rose as
high as Rs. 1,540bn. The net asset value (NAV) of mutual funds in India declined when stock prices
started falling in the year 1992. Those days, the market regulations did not allow portfolio shifts into
alternative investments. There was rather no choice apart from holding the cash or to further continue
investing in shares. One more thing to be noted, since only closed-end funds were floated in the market,
the investors disinvested by selling at a loss in the secondary market.
46
The performance of mutual funds in India suffered qualitatively. The 1992 stock market scandal, the
losses by disinvestments and of course the lack of transparent rules in the whereabouts rocked confidence
among the investors. Partly owing to a relatively weak stock market performance, mutual funds have not
yet recovered, with funds trading at an average discount of 1020 percent of their net asset value. The
measure was taken to make mutual funds the key instrument for long-term saving. The more the variety
offered, the quantitative will be investors. At last to mention, as long as mutual fund companies are
performing with lower risks and higher profitability within a short span of time, more and more people
will be inclined to invest until and unless they are fully educated with the dos and don'ts of mutual funds.
MARKET TRENDS
A lone UTI with just one scheme in 1964 now competes with as many as 400 odd products and 34 players
in the market. In spite of the stiff competition and losing market share, Last six years have been the most
turbulent as well as exiting ones for the industry. New players have come in, while others have decided to
close shop by either selling off or merging with others. Product innovation is now passé with the game
shifting to performance delivery in fund management as well as service. Those directly associated with the
fund management industry like distributors, registrars and transfer agents, and even the regulators have
become more mature and responsible.
The industry is also having a profound impact on financial markets. While UTI has always been a
dominant player on the bourses as well as the debt markets, the new generations of private funds, which
have gained substantial mass, are now flexing their muscles. Fund managers, by their selection criteria for
stocks have forced corporate governance on the industry. Rewarding honest and transparent management
with higher valuations has created a system of risk-reward created where the corporate sector is more
transparent then before.
Funds have shifted their focus to the recession free sectors like pharmaceuticals, FMCG and technology
sector. Funds performances are improving. Funds collection, which averaged at less than Rs100bn per
annum over five-year period spanning 1993-98 doubled to Rs210bn in 1998-99. In the current year
mobilization till now have exceeded Rs300bn. Total collection for the current financial year ending March
2000 is expected to reach Rs450bn. What is particularly noteworthy is that bulk of the mobilization has
been by the private sector mutual funds rather than public sector mutual funds. Indeed private MFs saw a
net inflow of Rs. 7819.34 Crore during the first nine months of the year as against a net inflow of
Rs.604.40 Crore in the case of public sector funds.
47
CHAPTER – 4
DATA ANALYSIS &
INTERPRETATIONS
4.1 Data analysis and interpretations
48
Following is the data analysis of the questionnaire which were given to basically working professionals to
analysis the pattern and preferences of their investments in last 12 months. This analysis is done w.r.t to
ICICI Direct and its competetors.
Ques. 1Have you invested in any of the following in the last 12 months?
Equity 32
Mutual Funds 14
Corporate Fixed Deposits 7
Insurance 1
Public Provident Fund 6
Future And Options 2
None 3
Interpretation - From the above stats it can be clarified that most of the people have invested in Equity
and also some of them are invested in mutual funds which means public mainly like to invest in Equity
and Mutual Funds. Peoples invest more in Equities because they get higher potential returns and less risk.
59%13%
2%
11%
4% 5% 6%
Have you invested in any of the following in
the last 12 months
Equity
Mutual Funds
Corporate Fixed Deposits
Insurance
Public Providend Fund
Future And Options
None
49
Ques. 2 what is your preferred mode of investment?
Online 88
Offline 10
Interpretation - From the above stats it can be clarified that most of the people having their preferred
mode of investment in online. Its means peoples are adopting and getting attract towards the online
platform for Trading and Investment
0 20 40 60 80 100
Online
Offline
What is Your PreferredMode of Investment
What is Your Preferred Mode of
Investment
50
Ques. 3 Have you invested in any of the following through ICICI Direct.com in the last 12 months?
Equity 50
Mutual Funds 6
Corporate Fixed Deposits 4
Future And Options 5
Insurance 4
None of these 29
Interpretation - From the above stats it can be clarified that most of the peoples have invested in Equity
and Mutual funds in Last 12 months. Peoples are Getting Good returns and benefits that’s why they
invested more in equities and mutual funds.
51%
6%
4%
5%
4%
30%
Have you invested in any of the following
through ICICIdirect.com in the last 12 months
Equity
MutualFunds
Corporate Fixed Deposits
Future and Options
Insurance
None Of These
51
Ques. 4 How do you /would you prefer to make your investments in Equity?
ICICI Direct 55
Other Broker 30
NA 13
Interpretation -From the above stats it can be clarified that most of the people preferred to make their
investment in Equity its 56% with ICICI Direct.com because the return is high and more of the liquidity.
56%31%
13%
How do you /would you preferto make your
investments in Equity
ICICI Direct
Other Broker
NA
52
Ques. 5 How do you /would you prefer to make your investments in Mutual Funds?
ICICI Direct 24
Agents 25
Other Broker 30
Banks 9
NA 10
Interpretation -From the above stats it can be clarified that most of the people want to make their
investment in mutual funds through others brokers but not from the ICICI Direct.com because ICICI
Direct don’t give the full services to the customers. They just open the account and then leave the
customers alone.
24%
26%
31%
9%
10%
How do you /would you preferto make your
investments in Mutual Funds
ICICI Direct
Agents
Other Broker
Banks
NA
53
Ques. 6 How do you /would you prefer to make your investments in Insurance?
ICICI Direct 10
Agents 45
Banks 30
Other Brokers 13
Interpretation -From the above stats it can be clarified that most of the people want to make their
investment in Insurance through Agents because Agents are trustworthy. They give the good n fixed
returns. Most of the customers are invested in LIC through LIC Agents.
10%
46%
31%
13%
How do you /would you preferto make your
investments in Insurance
ICICI Direct
Agents
Banks
Other Brokers
54
Ques. 7 How do you /would you prefer to make your investments in Corporate Fixed Deposit?
ICICI Direct 13
Directly With The Company 25
Other Broker 20
NA 40
Interpretation -From the above stats it can be clarified that most of the people prefer to make their
investment in Fixed deposits through other brokers because in Fixed deposits have the assurance that it
will give fixed returns and peoples more want to invest in FD because they don’t want to take the risk.
13%
26%
20%
41%
How do you /would you preferto make your
investments in Corporate Fixed Deposit?
ICICI Direct
Directly With The Company
Other Broker
NA
55
Ques. 8 How do you /would you prefer to make your investments in Debentures / Bonds?
ICICI Direct 13
Directly With Company 25
NA 60
Interpretation -From the above stats it can be clarified that most of the people don’t want to make their
investment in Debentures/bonds because customers don’t have the knowledge about the debentures and
bonds. They don’t have the finance to invest in the debentures and bonds.
13%
26%
61%
How do you /would you preferto make your
investments in Debentures / Bonds ?
ICICI Direct
Directly With Company
NA
56
Ques. 9 Before the demo, were you aware that you can invest in Mutual ?
Yes 80
No 18
Interpretation -From the above stats it can be clarified that most of the people around 90% peoples are
already aware about that they can invest in Mutual funds through ICICI Direct.com because the ICICI
Direct tell the customers at the time of when customers open their account with ICICI Direct.com and
also tell them about their online portal and you can invest in mutual funds directly online thorugh ICICI
Direct.com
0 20 40 60 80 100
Yes
No
Before the demo, were you aware that you
can invest in Mutual funds through ICICI
Direct
Before the demo, were you
aware that you can invest in
Mutual funds through ICICI
Direct
57
Ques. 10 If yes, what are the reasons for not investing in Mutual Funds through ICICI Direct.com?
I am not interested as I Invest through other brokers
or distributors
22
I need more knowledge on Mutual Funds before I
invest
24
I need assistance to invest in MF through ICICI
Direct.com
12
I do not invest in Mutual Fund 40
Interpretation -From the above stats it can be clarified that most of the people are not to invest in the
Mutual Funds through ICICI Direct.com and majority is 41%. It is because of the customers’ expectations
will not meet with the ICICI Direct.com and the customers not have good relationship with ICICI Direct
Relationship Manager’s.
22%
25%
12%
41%
If yes, what are the reasons for not investing
in Mutual Funds through ICICIdirect.com
I am not interested as I Invest
through other brokers or
distributors
I need more knowledge on
Mutual Funds before I invest
I need assistance to invest in
MF through ICICIdirect.com
I do not invest in Mutual Fund
58
Ques. 11 Which of the following online transactions have you done in the past?
I buy movie tickets online 30
I book flights or Train online 25
I buy merchandise online 15
I use Internet or Online Banking 24
I do not do any online transactions 4
Interpretation -From the above stats it can be clarified that most of the people shifted towards to online
baking and 46% peoples are using online baking for their online transactions. Peoples are using the best of
the online banking and it helps customers in to save their time.
13%
23%
14%
46%
4%
Which of the following online transactions
have you done in the past
I buy movie tickets online
I book flights or Train online
I buy merchandise online
I use Internet or Online Banking
I do not do any online
transactions
59
Ques. 12 How often do you transact online in any of the above mentioned transactions?
Monthly 50
Once in a Quarter 40
Once in a Six Months 3
Once in a Year 5
Interpretation -From the above stats it can be clarified that most of the people transact online 51% in the
monthly basis. Because they have the account with bank and securities and for the trading they also have
to do online trading.
51%
41%
3%
5%
How often do you transact online in any of
the above mentioned transactions
Monthly
Once in a Quarter
Once in a Six Months
Once in a Year
60
Ques. 13 Which medium of news information and analysis do you use to keep yourself informed on
investment products?
I discuss with my friends, family and or
colleagues
20
I prefer to do my own research 40
I have a financial advisor or broker or MF
distributor who updates me
13
I use financial websites for comparisons and news 15
I read media reports 10
Interpretation -From the above stats it can be clarified that most of the people are discuss with their
family and friends to keep the information about investment products and it is because the Family play as
the role of trustee like Agent.
45%
23%
15%
17%
0%
0%
Which medium of news informationand
analysis do you use to keep yourself
informedon investment products
I discuss with my friends, family
and or colleagues
I prefer to do my own research
I have a financial advisor or
broker or MF distributor who
updates me
I use financial websites for
comparisons and news
61
Ques. 14 How do you check the performance of all/any of your investments?
I ask my financial advisor 28
broker or MF distributor to send me information 25
I update investment details on a third party
portfolio website and check regularly
21
My bank provides me the information 10
Other - SELF 14
Interpretation -From the above stats it can be clarified that most of the people check the performance of
all of their investments through Financial Advisor Because the Financial Advisor is the person who have
the perfect knowledge about the stock market and having experience in the stock market. On the other side
the broker also play the important role in to provide the information to customers for their investments
10%
29%
26%
21%
14%
How do you check the performanceof all/any
of your investments
My bank provides me the
information
I ask my financial advisor
broker or MF distributor to send
me information
I update investment details on a
third party portfolio website and
check regularly
Other - SELF
62
Ques. 15 would you consider switching your investment relationship to ICICI Direct.com?
Yes 42
No 65
Interpretation -From the above stats it can be clarified that most of the people are not to keep their
Investment relationship with ICICI Direct.com because of the past experience of ICICI direct customers
was not good. They do not trade through their Present Account. They do not have adequate knowledge
about Stock market or maybe they are in investment relationship with other Company.
0
10
20
30
40
50
60
Yes No
Would you consider switching your
investment relationship to ICICIdirect.com
Would you consider switching
your investment relationship to
ICICIdirect.com
63
Ques. 16 Which of the following site features did you find useful in the demo?
Capital Gains Statement 19
Ease of purchase or redemption 27
Portfolio Monitoring 21
Personalized research recommendations against
holdings
21
Others 10
Interpretation -From the above stats it can be clarified that the demo which I gave to the customers of
ICICI it is very beneficial for them and they can easily manage their portfolio and it is easy for customers
to easy of purchase and redemption of shares.
19%
28%
22%
21%
10%
0%
Which of the following site featuresdid you
find useful in the demo
Capital Gains Statement
Ease of purchase or redemption
Portfolio Monitoring
Personalized research
recommendations against
holdings
64
Ques. 17 How would you rate the presentation and demonstration by our representative?
Good 90
Bad 1
Neutral 3
Needs Improvement 4
Interpretation -From the above stats it can be clarified that most of the people find that the Presentation
and demonstration which Is given by me to the Customers of ICICI Direct was very good. They
understand very well that they can become a user-friendly with the website of ICICI Direct.com and they
also find that it is a good online portal where they can easily do the trading of shares.
92%
1%3%
4%
How would you rate the presentation and
demonstration by our representative
Good
Bad
Neutral
Needs Improvement
65
CHAPTER – 4
FINDINGS &
CONCLUSIONS
66
FINDINGS
 Most of the clients are not aware with concept of mutual fund and its advantages.
 Customers past habits of investment is being recognized.
 Clients who know about mutual fund are not investing their money into it because of lack
of knowledge about mutual fund.
 Customer’s problems are solved as soon as possible.
 Mostly customers want to invest in fixed deposit only.
 In Delhi-NCR in the Age Group of 36-40 years were more in numbers. The second most
Investors were in the age group of 41-48 years and the least were in the age group of below
30 years.
 In Delhi-NCR most of the Investors were Graduate or Post Graduate or Retired persons.
 In Occupation group most of the Investors were Govt. employees, the second most
Investors were Private employees and the least were associated with Agriculture.
 About all the Respondents had a Saving A/c in Bank, 76% Invested in Fixed Deposits,
Only 60% Respondents invested in Equity
 Only 47% Respondents were aware about Mutual fund and its operations and 53% were
not.
 Among 98 Respondents only 30% had invested in Mutual Fund and 70% did not have
invested in Mutual fund.
67
SUGGESTIONS& RECOMMENDATIONS
1. The most vital problem spotted is of ignorance. Investors should be made aware of the
benefits. Nobody will invest until and unless he is fully convinced. Investors should be made
to realize that ignorance is no longer bliss and what they are losing by not investing.
Mutual funds offer a lot of benefit which no other single option could offer. But most of the
people are not even aware of what actually a mutual fund is? They only see it as just another
investment option. So the advisors should try to change their mindsets. The advisors should
target for more and more young investors. Young investors as well as persons at the height of
their career would like to go for advisors due to lack of expertise and time.
2. Mutual Fund Company needs to give the training of the Individual Financial Advisors about
the Fund/Scheme and its objective, because they are the main source to influence the
investors.
3. Before making any investment Financial Advisors should first Enquire about the risk
tolerance of the investors/customers, their need and time (how long they want to invest). By
considering these three things they can take the customers into consideration.
4. Younger people aged under 35 will be a key new customer group into the future, so making
greater efforts with younger customers who show some interest in investing should pay off.
Customers with graduate level education are easier to sell to and there is a large untapped
market there. To succeed however, advisors must provide sound advice and high quality.
5. Systematic Investment Plan (SIP) is one the innovative products launched by Assets
Management companies very recently in the industry. SIP is easy for monthly salaried person
as it provides the facility of do the investment in EMI. Though most of the prospects and
potential investors are not aware about the SIP. There is a large scope for the companies to
tap the salaried persons
68
CONCLUSION
Running a successful Mutual Fund requires complete understanding of the peculiarities of the
Indian Stock Market and also the psyche of the small investors. This study has made an attempt to
understand the financial behavior of Mutual Fund investors in connection with the preferences of
Brand (AMC), Products, and Channels etc. I observed that many of people have fear of Mutual Fund.
They think their money will not be secure in Mutual Fund. They need the knowledge of Mutual Fund
and its related terms. Many of people do not have invested in mutual fund due to lack of awareness
although they have money to invest. As the awareness and income is growing the number of mutual
fund investors are also growing.
“Brand” plays important role for the investment. People invest in those Companies where they have
faith or they are well known with them. There are many AMCs in Delhi-NCR but only some are
performing well due to Brand awareness. Some AMCs are not performing well although some of the
schemes of them are giving good return because of not awareness about Brand. Reliance, UTI,
SBIMF, ICICI Prudential etc. they are well known Brand, they are performing well and their Assets
Under Management is larger than others whose Brand name are not well known like Principle etc.
Distribution channels are also important for the investment in mutual fund. Financial Advisors are
the most preferred channel for the investment in mutual fund. They can change investors’ mind
from one investment option to others. Many of investors directly invest their money through AMC
because they do not have to pay entry load. Only those people invest directly who know well about
mutual fund and its operations and those have time.
69

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A STUDY ON MUTUAL FUNDS WITH REFERENCE TO ICICI DIRECT (SYSTEMATIC INVESTMENT PLAN)

  • 1. 1 CHAPTER – 1 INTRODUCTION 1.1 Objectives of Study 1.2 Methodology 1.2.1 Research Design 1.2.2 Data collection sources 1.2.3 Sampling 1.2.4 Limitation 1.2.5 Research Design 1.2.6 Data collection 1.3 Profile of customer
  • 2. 2 1.1 OBJECTIVES OF STUDY The objectives of this study are as follows:- PRIMARY OBJECTIVE:  To create awareness among the customers of ICICI about various MUTUAL FUNDS and their benefits through the online portal of ICICI.  To understand the concept of mutual fund.  To analyze the growth path of mutual fund sector in India.  To know why one has invested or not invested in preferred Mutual fund. SECONDARY OBJECTIVE:  To get a general feedback from the customers about ICICI Mutual Fund investment and the online portal.  To conduct survey about Mutual Fund investments from existing customers of ICICI Securities (Customers who have an ICICI Direct.com account).  To make the customers understand that it is always better to invest or purchase Mutual Funds online than offline.  To make customer user friendly with the website of ICICI Direct.com
  • 3. 3 1.2 RESEARCH METHODOLOGY RESEARCH & METHODOLOGY This report is based on primary as well secondary data, however primary data collection was given more importance since it is overhearing factor in attitude studies. One of the most important users of research methodology is that it helps in identifying the problem, collecting, analyzing the required information data and providing an alternative solution to the problem .It also helps in collecting the vital information that is required by the top management to assist them for the better decision making both day to day decision and critical ones. DATA SOURCES Research is based on primary data as well as secondary data. Secondary data can be used only for the reference. Research has been done by primary data collection, and primary data has been collected personally. The secondary data has been collected through various journals and websites SAMPLING  SAMPLING PROCEDURE The sample was selected randomly irrespective of them being investors or not or availing the services or not. It was also collected through personal, by formal and informal talks and through filling up the questionnaire prepared. The data has been analyzed by using mathematical/Statistical tool.  SAMPLE SIZE The sample size of my project is limited to 650 people only  SAMPLE DESIGN Data has been presented with the help of bar graph, pie charts, line graphs etc.
  • 4. 4 LIMITATION Some of the persons were not so responsive. Sample size is limited to 650 people including students, working people, business man and others. The sample size may not adequately represent the whole market. Some respondents were reluctant to divulge personal information which can affect the validity of all responses. The research is confined to a certain part of Delhi NCR. RESEARCH DESIGN A research design is the master plan or model for the conduct of formal investigation and survey. It is a specification of methods and procedures for acquiring the information needs for solving the problem. It decides the source of information and methods for gathering the data. A questionnaire and other forms are tested to use the collection of data. A sampling design is to be selected. Good research design ensures that the information obtained is relevant to the research question and that it was collected by objectives. Since research design is simply the framework of plan for a study, it is used as a guide in collecting and analyzing the data. It is a blueprint that is followed in completing the research study. My approach to research is descriptive. The major objective of the descriptive research is to describe something – usually market features or functions. DATA COLLECTION Primary data will be collected through feedback form filled by the customer. Secondary data will be obtained through company sources and other various internet sites. PROFILE OF THE CUSTOMERS  Customers were the investor who mostly likely to invest in Equity or Fixed deposit or there were customers who had stopped investing in the market.  Customers mostly prefer investing through online channels as mode of investment.  The customers were already existing customers of ICICI company weather insurance, so this database was used for cross sealing.
  • 5. 5 CHAPTER – 2 ORGANIZATION PROFILE 2.1 Introduction to ICICI Securities. 2.2 Stock Exchanges 2.3 ICICI Direct 2.3.1 ICICI Trading platform 2.3.2 ICICI Cash Brokerage 2.3.3 How to open a ICICI Direct A/c 2.3.4 Advantages & Disadvantages of ICICI Direct 2.4 SWOT Analysis 2.5 Taxation aspect of company 2.6 Achievements 2.7 Current market position
  • 6. 6 2.1 INTRODUCTION TO ICICI SECURITIES. The ICICI Securities is mainly dealing in the security market. The security market of India is very widely spreaded and still it is growing at a good rate. The major institutions which are involved in the security market are performing the role of the intermediaries for Buyers and Sellers in the market. The service provided by the mediator is easy transaction between two parties. Before 1998 the security market was dealing in physical format. There were share brokers who performed the job of the intermediaries between the two parties. The main markets were the stock exchanges situated in different parts of the country. The brokers were purchasing and selling the securities on behalf of the investors. The stock broking industry is a service-oriented industry where brokers act as agents for investors when a security is bought or sold and are compensated with a commission. Investors would not hesitate to switch to alternative brokerage houses if they do not obtain satisfaction. Providing quality service and hence customer satisfaction should thus be recognized as a key strategy and a crucial element of long-run success and profitability for stock broking businesses. ICICI Securities Limited provides various products and services to corporate, financial institutions, and retail investors INDIA and internationally. It provides corporate finance services to corporations, financial institutions, financial sponsors, and government, which include equity capital market products, such as initial public offerings (IPO), further public offerings, rights offerings, convertible offerings, qualified institutional placements, non-convertible debentures, buyback, delisting, and open offers and international offerings for unlisted and listed entities. The company also offers mergers and acquisitions advisory services; and private equity advisor. ICICI Securities - Private Wealth Management At ICICI Securities, we base our services on a simple yet powerful philosophy – we believe in building long term relationships and partnering with them in legacies for generations to follow. ICICI Securities - Retail ICICI Securities empowers over 2 million Indians to seamlessly access the capital market with ICICI Direct.com, an award winning and pioneering online broking platform.
  • 7. 7 2.2 STOCK EXCHANGES NATIONAL STOCK EXCHANGE {N.S.E.}: NSE was set up in 1993 at Delhi to encourage stock exchange reforms through the system modernization and competition. The NSE was following the screen based trading system. The system through which the NSE is trading is known as the NEAT [National Exchange for Automated Trading.]. It allows members across the country to trade simultaneously and with full efficiency. As on December 1996 there were around 1200 companies traded on NSE. Out of 1200 companies only 535 companies were listed and rest were permitted companies. The market capitalization as on January was 4.2 trillion. The total turnover of the NSE as on January was around Rs. 2,16,000 crores. This was more than nine times than the turnover of 1995, which was Rs. 27,000 crores. BOMBAY STOCK EXCHANGE {B.S.E.}:- The BSE is situated at Mumbai more popularly known as the ―DALAL STREET. As the Mumbai is the trading capital of the nation, most of the companies prefer to list their shares in the BSE. The BSE had an extra age over the NSE in number of the companies listed. As on December 1996, only 1200 companies were traded on the NSE where as on BSE on the same day 5999 companies were traded. But since November 1995 trading volumes on NSE is more than the BSE. The BSE is also a major party who has contributed to the development of security market in India.
  • 8. 8 2.3 ICICI DIRECT ICICI direct is an online trading and investment platform on ICICI Securities, the largest stock broker firm in India providing a wide range of investment options to the retail and institutional customers. ICICI Securities is part of ICICI Group, India's top financial service provider offering banking and other financial services. ICICI Securities (I-Sec) is the top equity house in India with over 20 lakh customers. ICICI Direct.com is the most visited investment portal in India and by NRI's living across countries. It is one website which provides options to invest in over 20 financial products including Equity, Derivatives, Currency Futures, IPO, Mutual Funds, ETF, Fixed Deposits, Loans, Tax Services, New Pension Systems and Insurance. ICICI direct also provide current stock market information which includes stock prices, news, market research reports, stocks tips, events, IPO News and company results. Its 'Centre for Financial Learning' initiative offers number of online and classroom programs for investors. The 3-in-1 account, which includes ICICI Bank Account, ICICI Direct Trading Account and ICICI Demat Account, is the best offering for retail investors in India as it provides easiest way to invest in stock market and other financial instruments. The customers can visit any of the over 1500 ICICI Bank branches to get help on financial products which are sold through ICICI direct. ICICI Direct.com is the largest equity house in the country providing end-to-end solutions (including web- based services) through the largest non-banking distribution channel so as to fulfill all the diverse needs of
  • 9. 9 retail and corporate customers. ICICI Direct.com has a dominant position in its core segments of its operations – Corporate Finance including Equity Capital Markets Advisory Services, Institutional Equities, Retail and Financial Product Distribution. With a full-service portfolio, a roster of blue-chip clients and performance second to none, we have a formidable reputation within the industry. Today ICICI Securities is among the leading Financial Institutions both on the institutional as well as retail side .ICICI Direct.com, the step down wholly owned US subsidiary of the company is a member of the National Association of Securities Dealers, Inc. (NASD). As a result of this membership, ICICI Securities Inc. can engage in permitted activities in the U.S. securities markets. These activities include Dealing in Securities and Corporate Advisory Services in the United States and providing research and investment advice to US investors. ICICI Direct.com is also registered with the Financial Services Authority, UK (FSA) and the Monetary Authority of Singapore (MAS). ICICI DIRECT TRADING PLATFORMS ICICI Direct offers 2 trading platforms to its customers: 1. Share Trading Account (Website Based Trading) Website based online Share Trading Account by ICICI Direct is primarily for buying and selling of stocks The ICICI Direct website allows Cash Trading, Margin Trading, Margin PLUS Trading, Spot Trading, Buy Today Sell Tomorrow, IPO Investment, Mutual Fund Investment etc. ICICI Direct.com website is the primary Investment vehicle of ICICI Limited. 2. Trade Racer (Trading Terminal) Trade Racer is a power packed Trading platform which provides an investor with Live streaming quotes & Research Calls, integrated fund transfer system along with multiple watch list facility. Investor can also do technical analysis with the help advance charting tools. Single Order entry page for Equities and Derivatives, Technical Analysis, Integrated Fund Transfer System, Customized Interface, Intra-day and EOD Charts and Shortcut keys for faster access to markets are some of the key features of Trade Racer Terminal.
  • 10. 10 ICICI DIRECT CASH BROKERAGE I - Saver Plan I - Secure Plan Total Eligible Turnover (Per calendar Quarter) Brokerage (%) Effective Brokerage on Intraday Square off Total Eligible Turnover (Per calendar Quarter) Brokerage (%) Effective Brokerage on Intraday Square off Above Rs. 5 Crores 0.25 0.125% Irrespective of turnover 0.55 0.275% Rs.2 Crores to 5 Crores 0.30 0.150% Rs.1 Crores to 2 Crores 0.35 0.175% Rs.50 Lakhs to 1 Crores 0.45 0.225% Rs.25 Lakhs to 50 Lakhs 0.55 0.275% Rs.10 Lakhs to 25 Lakhs 0.70 0.350%
  • 11. 11 HOW TO OPEN ACCOUNT WITH ICICI SECURITIES PVT LTD.? For Online Stock Trading with ICICI, investor needs to open 3 accounts...ICICI Bank Account, ICICI Direct Trading Account and ICICI Demat Account (DP Account).All 3 accounts are essential for tradin Note: If you already have a bank account or demat account with ICICI, you could link it with new ICICI Direct trading account. All the features of new account will be separated with old account a/c to plan taken. Opening trading account with ICICI is easy. You could use one of the following options to open account with ICICI Direct.  Visit ICICI Direct.com and fill the "Open an Account" form.  Call ICICI and tell them that you are interested in opening an account with them. In both the cases ICICI representative contact you in a day or two and tell you about the procedure to open the account. They usually send somebody to your home to collect documents, signature and for demo if required. Contact ICICI Direct / Request Call Back Name: Phone #: Email: City, State: Are you a day trader? ICICI DIRECT ADVANTAGES 1. 3-in-1 account integrates your banking, broking and demat accounts. All accounts are from ICICI and very well integrated. This feature makes ICICI the most interesting player in online trading facility. There is absolutely no manual interfere require. This is truly online trading environment. 2. Unlike most of the online trading companies in India which require transferring money to the broker's pool or towards deposits, at ICICI Direct you can manage your own demat and bank accounts through ICICI Direct.com. Money from selling stock is available in ICICI bank account as soon as the ICICI Direct receive it. 3. Investment online in IPOs, Mutual Funds, GOI Bonds, and Postal Savings Schemes all from one website. General Insurance is also available from ICICI Lombard. 4. Trading is available in both BSE and NSE.
  • 12. 12 5. Low bandwidth website is available for slow internet connection or for trading from mobile devices. 6. Through myGTC feature, you can place buy and sell limit orders in equity scripts of your choice; specifying the period for which you want the order instruction to be valid. ICICI DIRECT DISADVANTAGES 1. ICICI Direct brokerage is high and not negotiable. 2. ICICI Direct doesn't offer commodity trading. With ICICI Trading account you cannot trade at MCX or NCDEX. 3. With ICICI Direct.com e-Invest account(3-IN-1 concept), the Demat Account has to be opened with ICICI Bank Ltd as the Depository Participant (DP) and the Bank Account has to be opened with ICICI Bank Ltd. as the Banker. 4. ICICI minimum brokerage change is Rs 35 per trade which is very high for traders who does small trades. BOARD OF DIRECTORS ICICI Securities Limited.  Ms. Chanda D. Kochhar,Chairperson  Mr. Uday Chitale, Independent Director  Mr. Vinod Kumar Dhall, Independent Director  Ms. Zarin Daruwala  Ms. Shilpa Kumar  Mr. Anup Bagchi, Managing Director & CEO  Mr. Ajay Saraf, Executive Director
  • 13. 13 2.4 SWOT ANALYSIS SWOT analysis is done by all the companies to be aware about the competitor and new changes in the market. The SWOT analysis leads the company to take strategic decisions. Company always highlight its strength, try to hide own weakness and in the same way try to find out strength and weakness of the competitors. S - Strength Strength of the ICICI Securities is the main feature of the service. As it gives 3 in 1account to the customer, the ease to trade at your convenient time is the main strength of the ICICI Direct. Following are some of the strong points of the company. Convenience of time to trade Faster transaction Paperless work 3 in 1 account facility so all work done at one place. The bank has strength of the latest technologies and the most modern banking channels as net banking and the schemes such as young saver accounts also. The young and energetic staff of the bank is also one of the strengths. W-Weaknesses Weakness of company is fond out to remove it and then make the product or service better than current status. Each and every product and service has weakness. It is just like two side of the coin, if you have strength then you have weakness. The weakness of the ICICI Direct.com can be said its high charges compared to other companies. O - Opportunity Opportunity of the company is with the growth of volume of share trading and if company decides to reduce the prices to some extent then a new market segment will come up as a customer of the service. Jetpur, being the big industrial city of Saurashtra region the Bank has enough of opportunities to flourish its business here. ICICI Bank can also grab the opportunity of establishing its market in then ear by towns and villages by keeping their ATM machines and also by sending their marketing executives to these remote places on some specific days.
  • 14. 14 T - Threat Threat for the company can be considered as following. Growing competition Change in government rules which is negative for stock market Low prices of local brokers Low awareness of computer in public. The other threat of the new entrants in the market will take up the share from them. Now a days many of the financing companies are entering the Jetpur‘s market, which is one of the biggest threat for the Banks as they provide the finance to the customers at very less rates and also at the quickest.
  • 15. 15 2.5 TAXATION ASPECT OF COMPANY ICICIDrect Tax services 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., with this also comes the pain of standing in long queues for filing the tax returns timely. You are Just 5 steps away from easing your Income Tax Worries: 1. Register for ICICI Direct TAX Services 2. Assess Tax Estimator and estimate your tax payable amount 3. Get your tax optimising investment options customised as per your life profile 4. Submit income & investment details and prepare your ITR instantly 5. File returns
  • 16. 16 2.6 ACHEIVEMENTS OF THE COMPANY Retail  ICICI Direct.com, won the Outlook Money ' Best e- Brokerage Award' for 10th time in a row in 2014. Previously, the firm won the award in 2004, 2005, 2007, 2008, 2009, 2010, 2011, 2012 and 2013.  ICICI Direct won the Franchisor of the year award 2014  ICICI Direct won the BSE - D&B Equity Broking Awards 2014  ICICI Securities won the Award for Outstanding Social Impacts at the Global Sustainability Leadership Awards 2014 These awards recognize institutions for their contribution to the society in their domain as well as businesses that deliver products and services in ways that takes full account of their responsibility towards the communities they touch.  Ranked 2 at the THOMSON REUTERS STARMINE ANALYST AWARDS 2014 - TOP BROKERS  ICICI Securities was awarded the "MOST ADMIRED SERVICE PROVIDER IN FINANCIAL SECTOR" at the BANKING FINANCIAL SERVICES & INSURANCE AWARDS 2014 presented by ABP News.  ICICI Direct.com won the Mobbys award for the "Best Mobile application in Mobile Trading".  ICICI Securities Business Partners has been conferred the Franchise India Awards 2013, for being the 'Franchisor of the year' in the Financial Services category.  ICICI Direct.com, won the award for Innovation at Banking Frontiers Finnoviti Awards 2013. The award was conferred on ICICI Direct's for its `Valid Till Cancel Order' (VTC ) facility, which was awarded amongst the top 3 innovations in BFSI industry by 'Peer Voting'.  ICICI Securities won the Outlook Smart use Technology eRetailer of the year 2013 conferred by FIHL in association with HomeShop18.com.  ICICI Direct.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.
  • 17. 17  ICICI Securities won the 'BSE IPF D&B Equity Broking Awards 2012' under two categories: 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 award recognises 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 was the winner of the 'Smart use Technology eRetailer of the year' 2012 award conferred by Franchise India in association with UTV Bloomberg for the first time.  ICICI Direct.com, won the Outlook Money ' Best e- Brokerage Award' seventh time in a row. Previously, the firm won the award in 2004, 2005, 2007, 2008, 2009 and 2010.  ICICI Securities' Business Partners (Sub Broker channel) won the 'Franchisor of the Year 2011' for the third consecutive year.  Anup Bagchi, MD & CEO has been honoured with the Zee Business 'Industry Newsmaker Award 2010' for his tremendous and unmatched contribution in the field of Finance  Pankaj Pandey, Head- Research - ICICI Direct has won the Zee Business Best Market Analyst 2010 award in the Equities Fundamental Category  CMO Asia Awards for Excellence in Branding and Marketing 2010: o Brand Leadership Award (overall) o 'Campaign of the Year' for the Trade Racer Campaign o Brand Excellence in Banking and Financial Services for the store format o Award for Brand Excellence in the Internet Business  Franchisor of the year award 2009  Retail concept of the year awards 2009  Frost and Sullivan 2009 Award for Customer Service Leadership  ICICI Direct, the neighborhood financial superstore won the prestigious Franchise India `Service Retailer of the Year 2008 award.
  • 18. 18  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 Institutional  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 Finance Magazine  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 Asiamoney. Technology  ICICI Securities Ltd was awarded the The Indian Merchants Chamber - IT Awards 2015 for the category "End Users of IT" by the Indian Merchants? Chamber under the BFSI domain.  ICICI Securities recently won the Innovation Award for Oracle Fusion Middleware.ICICI Securities has consistently demonstrated the best usage of Oracle Tuxedo as an OLTP engine. These Asia-Pacific awards honor customers for their optimum and innovative solutions using Oracle Fusion Middleware.  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
  • 19. 19  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 in 2012  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 2010  Indian Bank's Association Business Technology Awards was presented for Best Online Trading Platform in 2006 and 2007
  • 20. 20 2.7 CURRENT MARKET POSITION OF THE INDUSTRY Following is the information on the stock price history of the stocks of ICICI group. These prices are filtered out for the past 1 year w.e.f 1st April, 2016 Prices Date Open High Low Close Avg Vol Adj Close* 1 Apr, 2016 236.00 239.45 232.70 238.30 28,504,200 238.30 1 Mar, 2016 195.25 241.35 195.25 236.65 17,671,600 236.65 1 Feb, 2016 227.00 227.35 180.75 190.05 27,768,100 190.05 1 Jan, 2016 261.30 263.60 217.80 230.15 17,160,400 230.15 1 Dec, 2015 275.05 276.75 243.05 261.35 10,516,200 261.35 2 Nov, 2015 277.00 282.70 256.00 274.75 9,610,200 274.75 1 Oct, 2015 273.45 292.70 266.05 277.00 8,784,000 277.00 1 Sep, 2015 275.00 285.35 247.70 270.35 14,248,200 270.35 3 Aug, 2015 304.45 319.80 267.15 277.90 14,319,000 277.90 1 Jul, 2015 308.70 321.00 282.70 302.40 13,321,300 302.40 04-Jun-2015 5.00 Dividend 1 Jun, 2015 317.00 320.40 280.35 308.00 15,722,300 308.00 1 May, 2015 331.15 338.00 300.60 317.25 11,267,400 311.89 1 Apr, 2015 315.00 334.80 296.70 331.15 11,932,300 325.55 According to the above table the stock prices are showing the upward trend in last few months after recovering from major fall in September last year (2015). The average volume of the stocks has been continuously increasing from 10,516 to 28,504 from January 2016 to April 2016.
  • 21. 21 As far as competitors are concerned following is the table which shows the comparison between stock price of ICICI group and its competitors. According to it ICICI has maintained its competitive position in the past over most its competitors and is projected to maintain so in near future. Competition Name Last Price Market Cap. (Rs. cr.) Net Interest Income Net Profit Total Assets HDFC Bank 1,092.15 276,115.89 48,469.91 10,215.92 590,503.07 ICICI Bank 252.00 146,541.61 49,091.14 11,175.35 646,129.29 Kotak Mahindra 676.10 124,023.83 9,719.87 1,865.98 106,012.08 Axis Bank 475.85 113,440.02 35,478.60 7,357.82 461,932.39 IndusInd Bank 981.50 58,400.15 11,580.66 2,286.45 109,115.92 Yes Bank 875.75 36,847.60 11,572.00 2,005.36 136,170.42 ING Vysya Bank 1,027.00 19,719.13 5,205.22 657.85 60,413.23 IDFC Bank 53.80 18,264.28 -- -2.58 0.05 Federal Bank 47.40 8,148.42 7,419.46 1,005.75 82,850.47 City Union Bank 94.80 5,680.88 2,698.86 395.02 27,871.13 Karur Vysya 464.75 5,663.65 5,395.87 464.28 53,152.49 JK Bank 72.85 3,531.61 7,061.13 508.60 76,085.46 DCB Bank 98.00 2,788.58 1,422.42 191.18 16,132.30 South Ind Bk 18.25 2,464.31 5,286.22 307.20 59,116.32 Karnataka Bank 112.90 2,127.86 4,698.42 451.45 51,836.60 Lakshmi Vilas 81.90 1,469.79 2,214.53 132.29 24,705.43 StanChart IDR 52.50 630.00 - - 131,000.95 Dhanlaxmi Bank 20.00 354.88 1,283.59 -241.47 14,351.90 Goldman BEES 2,669.80 273.93 -- -- -
  • 22. 22 CHAPTER – 3 LITERATURE REVIEW 3.1 A study on Mutual Funds 3.1.1 Introduction 3.1.2 How do Mutual Funds Work? 3.1.3 Advantages & Disadvantages of Mutual Funds 3.1.4 Majors mutual funds in India 3.2 ICICI Direct and its product line 3.3 Competitors and ICICI Direct 3.4 Current status of industry
  • 23. 23 3.1 A STUDY ON MUTUAL FUND In few years Mutual Fund has emerged as a tool for ensuring one’s financial well being. Mutual Funds have not only contributed to the India growth story but have also helped families tap into the success of Indian Industry. As information and awareness is rising more and more people are enjoying the benefits of investing in Mutual Funds. The main reason the number of retail mutual fund investors remains small is that nine out of ten people with incomes in India do not know that mutual funds exist. But once people will be aware of mutual fund investment opportunities, the number who decide to invest in mutual funds increases may increase to as many as one in five people. The trick for converting a person with no knowledge of mutual funds to a new Mutual Fund customer is to understand which of the potential investors are more likely to buy mutual funds and to use the right arguments in the sales process that customers will accept as important and relevant to their decision. This Project gave me a great learning experience and at the same time it gave me enough scope to implement my analytical ability. The analysis and advice presented in this Project Report is based on market research on the awareness of mutual funds among ICICI customers and preferences of the investors for investment in Mutual Funds. This Report will help to know about the investors’ Preferences in Mutual Fund means Are they prefer any particular Asset Management Company (AMC), Which type of Product they prefer, Which Option (Growth or Dividend) they prefer or Which Investment Strategy they follow (Systematic Investment Plan or One time Plan). This Project as a whole can be divided into two parts. The first part gives an insight about Mutual Fund and its various aspects, the Company Profile, Objectives of the study, Research Methodology. One can have a brief knowledge about Mutual Fund and its basics through the Project.The second part of the Project consists of data and its analysis collected through survey done on 98 peoples. For the collection of secondary data I made a questionnaire and surveyed of 98 peoples. The data collected has been well organized and presented. I hope the research findings and conclusion will be of use.
  • 24. 24 MUTUAL FUNDS: DEFINITION An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. Mutual funds are operated by money managers, who invest the fund's capital and attempt to produce capital gains and income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus. MUTUAL FUNDS: AN INTRODUCTION A Mutual Fund is an investment tool that allows small investors access to a well-diversified portfolio of equities, bonds and other securities. Each shareholder participates in the gain or loss of the fund. Units are issued and can be redeemed as needed. The fund's Net Asset Value (NAV) is determined each day. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. FIG 1.1
  • 25. 25 3.1.2 HOW DOES A MUTUAL FUND WORK Mutual funds are financial intermediaries, which collect the savings of investors and invest them in a large and well-diversified portfolio of securities such as money market instruments, corporate and government bonds and equity shares of joint stock companies. Mutual funds are conceived as institutions for providing small investors with avenues of investments in the capital market. Since small investors generally do not have adequate time, knowledge, experience and resources for directly accessing the capital market, they have to rely on an intermediary, which undertakes informed investment decisions and provides consequential benefits of professional expertise.
  • 26. 26 3.1.3 TYPE OF MUTUAL FUND SCHEMES Open Ended Schemes: An open-end fund is one that is available for subscription all through the year and is not listed on the stock exchanges. The majority of mutual funds are open-end funds. Investors have the flexibility to buy or sell any part of their investment at any time at a price linked to the fund's Net Asset Value. Close Ended Schemes: A closed-end fund has a fixed number of shares outstanding and operates for a fixed duration (generally ranging from 3 to 15 years). The fund would be open for subscription only during a specified period and there is an even balance of buyers and sellers, so someone would have to be selling in order for you to be able to buy it. Closed-end funds are also listed on the stock exchange so it is traded just like other stocks on an exchange or over the counter. Usually the redemption is also specified which means that they terminate on specified dates when the investors can redeem their units. Interval Schemes: Interval Schemes are that scheme, which combines the features of open-ended and close-ended schemes. The units may be traded on the stock exchange or may be open for sale or redemption during pre- determined intervals at NAV related prices. Based on their investment objective: Equity Funds: Equity schemes endeavor to provide potential for high growth and returns with a moderate to high risk by investing in shares. Such schemes are either actively or passively (replicate indices) managed, and are best suited for investors with a long term investment horizon These funds invest in equities and equity related instruments. With fluctuating share prices, such funds show volatile performance, even losses. However, short term fluctuations in the market, generally smoothens out in the long term, thereby offering higher returns at relatively lower volatility. At the same time, such funds can yield great capital appreciation as, historically, equities have outperformed all asset classes in the long term.
  • 27. 27 Balanced fund: A mutual fund that buys a combination of common stock, preferred stock, bonds, and short-term bonds, to provide both income and capital appreciation while avoiding excessive risk. The purpose of balanced funds (also sometimes called hybrid funds) is to provide investors with a single mutual fund that combines both growth and income objectives, by investing in both stocks (for growth) and bonds (for income). Such diversified holdings ensure that these funds will manage downturns in the stock market without too much of a loss; the flip side, of course, is that balanced funds will usually increase less than an all-stock fund during a bull market . Balanced funds are the ideal mutual funds vehicle for investors who prefer spreading their risk across various instruments. Following are balanced funds classes: i) Debt-oriented funds -Investment below 65% in equity. ii) Equity-oriented funds-Invest at least 65% in equities, remaining in debt Debt fund: This fund invests in fixed income instruments such as debentures (bonds), Treasury Bills etc. Preferred by investors who want steady income and not willing to take much of risk. They invest only in debt instruments, and are a good option for investors averse to idea of taking risk associated with equities. Therefore, they invest exclusively in fixed-income instruments like bonds, debentures, Government of India securities; and money market instruments such as certificates of deposit (CD), commercial paper (CP) and call money. Put your money into any of these debt funds depending on your investment horizon and needs. i) Liquid funds- These funds invest 100% in money market instruments, a large portion being invested in call money market. ii) Gilt funds ST- They invest 100% of their portfolio in government securities of and T-bills. iii) Floating rate funds - Invest in short-term debt papers. Floaters invest in debt instruments which have variable coupon rate.
  • 28. 28 iv) Arbitrage fund- They generate income through arbitrage opportunities due to mis-pricing between cash market and derivatives market. Funds are allocated to equities, and money markets. Higher proportion (around 75%) is put in money markets, in the absence of arbitrage opportunities. ADVANTAGES & DISADVANTAGES OF INVESTING IN MUTUAL FUNDS: For investments in mutual fund, one must keep in mind about the Pros and cons of investments in mutual fund. ADVANTAGES OF INVESTING MUTUAL FUNDS:  Affordability: As mutual funds are available in units, one can initially opt for a regular investment plan contributing few hundred rupees per month  Professional Management: A mutual fund offers the expertise of professional fund managers who, with their skills and knowledge, are able to understand market trends and invest accordingly o Diversification: Rather than investing in one or a few instruments, a mutual fund invests in a basket of instruments which matches its investment objective. For instance, in case of an equity diversified fund, the investment is spread across multiple industries / sectors and companies. As a mutual fund investor, you are able to access a diversified investment portfolio with a sum of as little as Rs. 500, which would otherwise not be possible  Convenience and Flexibility: Mutual fund operations like purchase, redemptions, switching between funds of the same fund house, etc. are relatively simple. Moreover, Mutual funds offer you the flexibility of tailoring your investment program with facilities like Systematic Investment Plans (SIPs), Systematic Transfer Plans (STPs) and Systematic Withdrawal Plans (SWPs) explained later.  Cost Effectiveness: Economies of scale, achieved by pooling of investors' funds, lowers the costs of investing for an investor. Such lower costs make a huge impact cumulatively over longer time horizons.
  • 29. 29  Liquidity: Mutual fund units are highly liquid, since open ended funds may be redeemed with the Mutual fund on any working day and closed ended funds may be sold in the market at the prevailing prices. Only tax saving and some close ended funds have lock in periods.  Tax Efficient: Mutual funds offer better tax benefits as compared to many other investment avenues.  Transparency: Mutual Funds are legally bound to disclose their portfolios at periodical intervals which keep the investor fully informed of where his money has been invested. Moreover, all the mutual funds are registered with SEBI, a regulatory body which ensures that the investors' interests are protected. BENEFITS OF MUTUAL FUNDS DISADVANTAGES OF INVESTING MUTUAL FUNDS: Professional Management- Some funds doesn’t perform in neither the market, as their management is not dynamic enough to explore the available opportunity in the market, thus many investors debate over whether or not the so-called professionals are any better than mutual fund or investor himself, for picking up stocks.
  • 30. 30 Costs – The biggest source of AMC income, is generally from the entry & exit load which they charge from an investors, at the time of purchase. The mutual fund industries are thus charging extra cost under layers of jargon. Dilution - Because funds have small holdings across different companies, high returns from a few investments often don't make much difference on the overall return. Dilution is also the result of a successful fund getting too big. When money pours into funds that have had strong success, the manager often has trouble finding a good investment for all the new money. Taxes - when making decisions about your money, fund managers don't consider your personal tax situation. For example, when a fund manager sells a security, a capital-gain tax is triggered, which affects how profitable the individual is from the sale. It might have been more advantageous for the individual to defer the capital gains liability.
  • 31. 31 MAJOR MUTUAL FUND COMPANIES IN INDIA Birla Sun Life Mutual Fund Birla Sun Life Mutual Fund is the joint venture of Aditya Birla Group and Sun Life Financial. Sun Life Financial is a global organization evolved in 1871 and is being represented in Canada, the US, the Philippines, Japan, Indonesia and Bermuda apart from India. Birla Sun Life Mutual Fund follows a conservative long-term approach to investment. Recently it crossed AUM of Rs. 10,000 crores. Bank of Baroda Mutual Fund (BOB Mutual Fund) Bank of Baroda Mutual Fund or BOB Mutual Fund was setup on October 30, 1992 under the sponsorship of Bank of Baroda. BOB Asset Management Company Limited is the AMC of BOB Mutual Fund and was incorporated on November 5, 1992. HDFC Mutual Fund HDFC Mutual Fund was setup on June 30, 2000 with two sponsors namely Housing Development Finance Corporation Limited and Standard Life Investment Limited. Prudential ICICI Mutual Fund The mutual fund of ICICI is a joint venture with Prudential Plc. of America, one of the largest life insurance companies in the US of A. Prudential ICICI Mutual Fund was setup on 13th of October, 1993 with two sponsors, Prudential Plc. and ICICI Ltd. The Trustee Company formed is Prudential ICICI Trust Ltd. and the AMC is Prudential ICICI Asset Management Company Limited incorporated on 22nd of June, 1993. Sahara Mutual Fund: Sahara Mutual Fund was set up on July 18, 1996 with Sahara India Financial Corporation Ltd. the sponsor. Sahara Asset Management Company Private Limited incorporated on August 31, 1995 works as the AMC of Sahara Mutual Fund. The paid-up capital of the AMC stands at Rs 25.8crore.
  • 32. 32 State Bank of India Mutual Fund State Bank of India Mutual Fund is the first Bank sponsored Mutual Fund to launch offshore fund, the India Magnum Fund with a corpus of Rs. 225 cr. approximately. Today it is the largest Bank sponsored Mutual Fund in India. They have already launched 35 Schemes out of which 15 have already yielded handsome returns to investors. State Bank of India Mutual Fund has more than Rs. 5,500 Crores as AUM. Now it has an investor base Of over 8 Lakhs spread over 18 schemes. Tata Mutual Fund : Tata Mutual Fund (TMF) is a Trust under the Indian Trust Act, 1882. The sponsors for Tata Mutual Fund are Tata Sons Ltd., and Tata Investment Corporation Ltd. The investment manager is Tata Asset Management Limited and its Tata Trustee Company Pvt. Limited. Tata Asset Management Limited's is one of the fastest in the country with more than Rs. 7,703 crores (as on April 30,2005) of AUM. Kotak Mahindra Mutual Fund Kotak Mahindra Asset Management Company (KMAMC) is a subsidiary of KMBL. It is presently having more than 1,99,818 investors in its various schemes. KMAMC started its operations in December 1998. Kotak Mahindra Mutual Fund offers schemes catering to investors with varying risk - return profiles. It was the first company to launch dedicated gilt scheme investing only in government sector Unit Trust of India Mutual UTI Asset Management Company Private Limited, established in Jan 14, 2003, manages the UTI Mutual Fund with the support of UTI Trustee Company Private Limited. UTI Asset Management Company presently manages a corpus of over Rs.20000 Crore. The sponsors of UTI Mutual Fund are Bank of Baroda (BOB), Punjab National Bank (PNB), State Bank of India (SBI), and Life Insurance Corporation of India (LIC). The schemes of UTI Mutual Fund are Liquid Funds, Income Funds, Asset Management Funds, Index Funds, equity and Balance Funds.
  • 34. 34 3.2 ICICI DIRECT AND ITS PRODUCT LINE PRODUCTS LINE ICICI Securities is mainly dealing with share, stock, government bond, mutual fund and IPO (initial public offer). ICICI Securities is providing mainly three type of product with different facilities. The core product of ICICI Securities is demat account. ICICI Securities is providing the core product with extra service of online share trading to its customer as per their requirement. There are three type of account in ICICI Securities. They are as follow: 1. Simple demat account 2. Wise investment 3. Direct.com 1. Simple DematAccount The simple demat account is the most simple form of ICICI Securities product. It gives a demat account to account holder. The customer can purchase and sell the share, government bond, and debenture. In this account the customer is suppose to deal in share market with the help of broker. Following are the regulatory aspects of simple demat account. Customer can deal only with help of broker. No online share trading is allowed. Account opining charge is Rs. 750If customer does not have saving account in ICICI Bank then he or she has to deposit Rs.5000 in the bank. Statement of demat account is given free of cost to the customer per quarter and if he or she wants monthly statement than Rs. 200 is charge per annum Charges: Account opening charge is Rs. 750Per purchase customer has to pay 0.02% of the amount of purchase. Minimum Rs. 20Per sale customer has to pay 0.04% of the amount of sale. Minimum Rs.20Maintains charge of demat account is Rs. 350 per annum. Script maintains charge 0.75 paisa per script per month. Trade rejection charge is Rs. 50 per transaction rejected. Limitation: Online share trading is not available. Transaction speed is very low compare to online share trading. Other competitors are providing the same service at lower rate.
  • 35. 35 2. Wise InvestmentAccount The Wise Investment Account is somewhat advanced version of simple demat account. This account gives the customer the freedom of doing online trading in Government bonds, Initial Public Offers and Mutual funds. Again here the main trading system is through the broker only. Charges: Account opining charge is Rs. 500Per purchase customer has to pay 0.02% of the amount of purchase. Minimum Rs. 20 Per sale customer has to pay 0.04% of the amount of sale. Minimum Rs.20 Maintains charge of demat account is Rs. 350 per annum. Script maintains charge 0.75 paisa per script per month. Trade rejection charge is Rs. 50 per transaction rejected. A saving account in ICICI BANK is necessary. Limitation: Online trading in equity is not allowed. Transaction time is longer than online trading. Portfolio is managed by broker, not by our self. Unnecessary investment of Rs 5000 as balance in saving account. 3. Direct.com The most advanced version of share trading is ―Direct.com‖. It allows the trading through internet and gives totally paperless work. It is the most effective way of doing the share trading. ―Direct.com‖ allows the customer to work at his own. Means it removes the broker and a terminal is given in hand of customer.
  • 36. 36 3.3 ICICI DIRECT AND ITS COMPETETORS ICICI Securities is providing share trading facilities. The ICICI was the 1st in India to introduce concept of online share trading. Now in the market there are few players who are providing the share trading facilities. Some of them are mentioned below who are providing some competition in the market. 1. HDFC Securities:- HDFC bank is also one of the growing bank in India. It has also given new definition to banking services with providing extra services than the traditional banking services. HDFC was in housing finance initially but in last few years it has widen its scope of working area. It has entered in almost all the sectors in which ICICI is dealing. HDFC is providing the demat account to its customers. The HDFC is not providing the online share trading like ICICI. Here it stays slightly behind the ICICI bank. 2.Kotak Street:- Kotak Street is also emerging as a good competitor to all the share trading service providing company. It is also entering in the all the financial services like the ICICI and HDFC bank. The Kotak Street is relatively new compared to ICICI and HDFC inthe field of share trading. Initially when the Kotak group had not entered in banking field it had collaboration with HDFC for the saving accounts of the customers who had or wanted to open the share trading account with the Kotak street. But now as the Kotak group has its own bank, all the saving accounts are opened in the Kotak bank. The Kotak group has also entered in the field of insurance with name―OM KOTAK MAHINDRA LIFE INSURANCE‖. The Kotak group has also entered in the MUTUAL FUND sector also. 3. India bulls India bulls are also one of the companies which is providing the share trading facility. It is a company which is providing the share trading facility only. It does not provide any saving account facility to its customer.
  • 37. 37 4. MotilalOswal MotilalOswal is also one of the competitiors of ICICI direct.com. This Company is also providing online trading facilities with which customer can save their time and they will operate the programme on their computer. 5. Marwadi This unit has paved their feet in each and every town because of the cheaper rate of its brokerage. They are not providing unlimited facility for trading. 6. 5paisa.com 5Paisa is the trade mane of India Info line Securities Private Limited (5paisa), member of National Stock Exchange and The Stock Exchange, Mumbai. 5paisa is a wholly owned subsidiary of India Info line Ltd. India‘s leading and most popular finance and investment portal. 5paisa has emerged as one of leading players in e-broking space in India 7. Sharekhan Sharekhan, India‘s leading stock broker is the retail arm of SSKI , and offers you depository services and trade execution facilities for equities, derivatives and commodities backed with investment advice tempered by decades of broking experience.
  • 38. 38 COMPETITORS AND COMPARISON This is the side-by-side comparison of ICICI Securities Pvt Ltd. and India Infoline Limited stock brokers in India. The comparison below highlights the similarities and differences between ICICI Direct and India Infoline (IIFL)'s brokerage, customer service, maintenance fees, tools and investment options provided to India Stock Market investors. If you are confused in choosing the best broking site, this page is to help you find which is the best broker among ICICI Direct and India Infoline (IIFL). About the Broker ICICI Direct is an online trading and investment platform on ICICI Securities, the largest stock broker firm in India providing a wide range of investment options to the retail and institutional customers. Incorporated in 1995, India Infoline (IIFL) is the brokerage firm of India Infoline Group, a fastest growing financial services solution provider in India. India Infoline is listed on BSE (532636) and NSE (INDIAINFO) for securities trading. Type of Broker Full Service Broker Full Service Broker Account Type 3-in-1 Account (I-Secure Plan) Standard Account Trading Account Opening Fees Rs 975 Rs 750 Trading Account AMC Nil Demat Account Opening Fees Nil Rs 555 Demat Account AM Rs 450 Rs 300
  • 39. 39 The comparison below highlights the similarities and differences between ICICI Direct and Angel Trade's brokerage, customer service, maintenance fees, tools and investment options provided to India Stock Market investors. About the Broker ICICI Direct is an online trading and investment platform on ICICI Securities, the largest stock broker firm in India providing a wide range of investment options to the retail and institutional customers. Angel Group has emerged as one of the top 3 retail broking houses in India. Incorporated in 1987, it has memberships on BSE, NSE and the two leading commodity exchanges in India i.e. NCDEX & MCX. Type of Broker Full Service Broker Full Service Broker Supported Exchnage BSE, NSE BSE, NSE, MCX Account Type 3-in-1 Account (I-Secure Plan) Angel Diet Trading Account Opening Fees Rs 975 Rs 0 Trading Account AMC Nil Rs 347 Demat Account Opening Fees Nil Rs 0 Demat Account AM Rs 450 Rs 0
  • 40. 40 The comparison below highlights the similarities and differences between ICICI Direct and HDFC securities's brokerage, customer service, maintenance fees, tools and investment options provided to India Stock Market investors. About the Broker ICICI Direct is an online trading and investment platform on ICICI Securities, the largest stock broker firm in India providing a wide range of investment options to the retail and institutional customers. HDFC Securities(HDFCsec) is Equity Trading Company of HDFC Bank. HDFC Securities provide both online trading and trading on phone. The HDFC Securities trading account has a unique 3-in-1 feature that integrates your HDFC Securities Type of Broker Full Service Broker Full Service Broker Supported Exchnage BSE, NSE BSE, NSE Account Type 3-in-1 Account (I-Secure Plan) Online Trading Trading Account Opening Fees Rs 975 Rs 999 Trading Account AMC Nil Demat Account Opening Fees Nil Nil Demat Account AM Rs 450 Rs. 750
  • 41. 41 The comparison below highlights the similarities and differences between ICICI Direct and Indiabulls's brokerage, customer service, maintenance fees, tools and investment options provided to India Stock Market investors. About the Broker ICICI Direct is an online trading and investment platform on ICICI Securities, the largest stock broker firm in India providing a wide range of investment options to the retail and institutional customers. Indiabulls Securities (ISL) is the India- based Stock Broker. ISL is part of Indiabulls Group, a leading business house in India with businesses spread across many sectors including Infrastructure, Power, Real Estate and Financial Services Type of Broker Full Service Broker Full Service Broker Supported Exchnage BSE, NSE BSE, NSE, MCX, NCDEX Account Type 3-in-1 Account (I-Secure Plan) Power Indiabulls Trading Account Opening Fees Rs 975 Rs 950 Trading Account AMC Nil Nil Demat Account Opening Fees Nil Nil Demat Account AM Rs 450 Rs. 450
  • 42. 42 The comparison below highlights the similarities and differences between ICICI Direct and sharekhan's brokerage, customer service, maintenance fees, tools and investment options provided to India Stock Market investors. About the Broker ICICI Direct is an online trading and investment platform on ICICI Securities, the largest stock broker firm in India providing a wide range of investment options to the retail and institutional customers. Incorporated in February 2000, Sharekhan is India's 2nd largest stock broker providing brokerage services through its online trading website Sharekhan.com and 1950 Share shops which includes branches & Franchises in more than 575 cities across India. Type of Broker Full Service Broker Full Service Broker Supported Exchnage BSE, NSE BSE, NSE, MCX, NCDEX, NSEL Account Type 3-in-1 Account (I-Secure Plan) Classic Account Trading Account Opening Fees Rs 975 Rs. 750 Trading Account AMC Nil Rs. 400 Demat Account Opening Fees Nil Rs. 0 Demat Account AM Rs 450 Rs. 400
  • 43. 43 The comparison below highlights the similarities and differences between ICICI Direct and KotakSecurities's brokerage, customer service, maintenance fees, tools and investment options provided to India Stock Market investors. If you are confused in choosing the best broking site, this page is to help you find which is the best broker among ICICI Direct and Kotak Securities. About the Broker ICICI Direct is an online trading and investment platform on ICICI Securities, the largest stock broker firm in India providing a wide range of investment options to the retail and institutional customers. Incorporated in 1994, Kotak Securities is a full services broker part of popular India based Kotak Mahindra Bank. The bank has over 1400 branches across India servicing more than 8 lakh customers Type of Broker Full Service Broker Full Service Broker Supported Exchnage BSE, NSE BSE, NSE, MCX-SX, MCX, NCDEX Account Type 3-in-1 Account (I-Secure Plan) Kotak Gateway Trading Account Opening Fees Rs 975 Rs. 750 Trading Account AMC Nil Nil Demat Account Opening Fees Nil Nil Demat Account AM Rs. 450 Rs. 600
  • 44. 44 3.4 CURRENT POSITION OF INDUSTRY The security market in India has developed a lot in last 5 to 7 years. The developments due to the increasing awareness among the people; developing communication almedia and most importantly change in the way of transaction i.e. on line trading of securities. BSE Online Share Trading ―B.O.L.T.‖ has brought revolution in the security market. Introduction of private banks in security market dealing and real estate business have brought the efficiency and competition in the market. Mutual funds are also one of the major elements which have influenced the growth of security market. Foreign Investment Institution [F.I.I.] and Foreign Direct Investment [F.D.I.] has also contributed in the growth of the security market in India. Currently in the security market following securities are been traded by the investors, institutional buyers and foreign investors. Shares [Equity shares & preference shares ] Debentures Government Bonds Mutual Funds Commercial papers The main feature of today‘s market is the Dematerialized form of almost all securities. Previously the securities were available in materialized form i.e. in papers but now it is available in Dematerialized form. It means securities are not given in paper format but in ELECTRONIC format it is been directly credited in purchaser‘s demat account. RECENT TRENDS IB MUTUAL FUNDS MARKET The most important trend in the mutual fund industry is the aggressive expansion of the foreign owned mutual fund companies and the decline of the companies floated by nationalized banks and smaller private sector players. Many nationalized banks got into the mutual fund business in the early nineties and got off to a good start due to the stock market boom prevailing then. These banks did not really understand the mutual fund business and they just viewed it as another kind of banking activity. Few hired specialized staff and generally chose to transfer staff from the parent organizations. The performance of most of the schemes floated by these funds was not good. Some schemes had offered guaranteed returns and their parent organizations had to bail out these AMCs by paying large amounts of money as the difference between the guaranteed and actual returns. The service levels were also very bad. Most of these AMCs have not been
  • 45. 45 able to retain staff, float new schemes etc. and it is doubtful whether, barring a few exceptions, they have serious plans of continuing the activity in a major way. The experience of some of the AMCs floated by private sector Indian companies was also very similar. They quickly realized that the AMC business is a business, which makes money in the long term and requires deep-pocketed support in the intermediate years. Some have sold out to foreign owned companies, some have merged with others and there is general restructuring going on. They can be credited with introducing many new practices such as new product innovation, sharp improvement in service standards and disclosure, usage of technology, broker education and support etc. In fact, they have forced the industry to upgrade itself and service levels of organizations like UTI have improved dramatically in the last few years in response to the competition provided by these. PERFORMANCE(MF’S) Let us start the discussion of the performance of mutual funds in India from the day the concept of mutual fund took birth in India. The year was 1963. Unit Trust of India invited investors or rather to those who believed in savings, to park their money in UTI Mutual Fund. The performance of mutual funds in India in the initial phase was not even closer to satisfactory level. People rarely understood, and of course investing was out of question. But yes, some 24 million shareholders were accustomed with guaranteed high returns by the beginning of liberalization of the industry in 1992. This good record of UTI became marketing tool for new entrants. The expectations of investors touched the sky in profitability factor. However, people were miles away from the preparedness of risks factor after the liberalization. The Assets under Management of UTI was Rs. 67bn. by the end of 1987. Let me concentrate about the performance of mutual funds in India through figures. From Rs. 67bn. the Assets Under Management rose to Rs. 470 bn. in March 1993 and the figure had a three times higher performance by April 2004. It rose as high as Rs. 1,540bn. The net asset value (NAV) of mutual funds in India declined when stock prices started falling in the year 1992. Those days, the market regulations did not allow portfolio shifts into alternative investments. There was rather no choice apart from holding the cash or to further continue investing in shares. One more thing to be noted, since only closed-end funds were floated in the market, the investors disinvested by selling at a loss in the secondary market.
  • 46. 46 The performance of mutual funds in India suffered qualitatively. The 1992 stock market scandal, the losses by disinvestments and of course the lack of transparent rules in the whereabouts rocked confidence among the investors. Partly owing to a relatively weak stock market performance, mutual funds have not yet recovered, with funds trading at an average discount of 1020 percent of their net asset value. The measure was taken to make mutual funds the key instrument for long-term saving. The more the variety offered, the quantitative will be investors. At last to mention, as long as mutual fund companies are performing with lower risks and higher profitability within a short span of time, more and more people will be inclined to invest until and unless they are fully educated with the dos and don'ts of mutual funds. MARKET TRENDS A lone UTI with just one scheme in 1964 now competes with as many as 400 odd products and 34 players in the market. In spite of the stiff competition and losing market share, Last six years have been the most turbulent as well as exiting ones for the industry. New players have come in, while others have decided to close shop by either selling off or merging with others. Product innovation is now passé with the game shifting to performance delivery in fund management as well as service. Those directly associated with the fund management industry like distributors, registrars and transfer agents, and even the regulators have become more mature and responsible. The industry is also having a profound impact on financial markets. While UTI has always been a dominant player on the bourses as well as the debt markets, the new generations of private funds, which have gained substantial mass, are now flexing their muscles. Fund managers, by their selection criteria for stocks have forced corporate governance on the industry. Rewarding honest and transparent management with higher valuations has created a system of risk-reward created where the corporate sector is more transparent then before. Funds have shifted their focus to the recession free sectors like pharmaceuticals, FMCG and technology sector. Funds performances are improving. Funds collection, which averaged at less than Rs100bn per annum over five-year period spanning 1993-98 doubled to Rs210bn in 1998-99. In the current year mobilization till now have exceeded Rs300bn. Total collection for the current financial year ending March 2000 is expected to reach Rs450bn. What is particularly noteworthy is that bulk of the mobilization has been by the private sector mutual funds rather than public sector mutual funds. Indeed private MFs saw a net inflow of Rs. 7819.34 Crore during the first nine months of the year as against a net inflow of Rs.604.40 Crore in the case of public sector funds.
  • 47. 47 CHAPTER – 4 DATA ANALYSIS & INTERPRETATIONS 4.1 Data analysis and interpretations
  • 48. 48 Following is the data analysis of the questionnaire which were given to basically working professionals to analysis the pattern and preferences of their investments in last 12 months. This analysis is done w.r.t to ICICI Direct and its competetors. Ques. 1Have you invested in any of the following in the last 12 months? Equity 32 Mutual Funds 14 Corporate Fixed Deposits 7 Insurance 1 Public Provident Fund 6 Future And Options 2 None 3 Interpretation - From the above stats it can be clarified that most of the people have invested in Equity and also some of them are invested in mutual funds which means public mainly like to invest in Equity and Mutual Funds. Peoples invest more in Equities because they get higher potential returns and less risk. 59%13% 2% 11% 4% 5% 6% Have you invested in any of the following in the last 12 months Equity Mutual Funds Corporate Fixed Deposits Insurance Public Providend Fund Future And Options None
  • 49. 49 Ques. 2 what is your preferred mode of investment? Online 88 Offline 10 Interpretation - From the above stats it can be clarified that most of the people having their preferred mode of investment in online. Its means peoples are adopting and getting attract towards the online platform for Trading and Investment 0 20 40 60 80 100 Online Offline What is Your PreferredMode of Investment What is Your Preferred Mode of Investment
  • 50. 50 Ques. 3 Have you invested in any of the following through ICICI Direct.com in the last 12 months? Equity 50 Mutual Funds 6 Corporate Fixed Deposits 4 Future And Options 5 Insurance 4 None of these 29 Interpretation - From the above stats it can be clarified that most of the peoples have invested in Equity and Mutual funds in Last 12 months. Peoples are Getting Good returns and benefits that’s why they invested more in equities and mutual funds. 51% 6% 4% 5% 4% 30% Have you invested in any of the following through ICICIdirect.com in the last 12 months Equity MutualFunds Corporate Fixed Deposits Future and Options Insurance None Of These
  • 51. 51 Ques. 4 How do you /would you prefer to make your investments in Equity? ICICI Direct 55 Other Broker 30 NA 13 Interpretation -From the above stats it can be clarified that most of the people preferred to make their investment in Equity its 56% with ICICI Direct.com because the return is high and more of the liquidity. 56%31% 13% How do you /would you preferto make your investments in Equity ICICI Direct Other Broker NA
  • 52. 52 Ques. 5 How do you /would you prefer to make your investments in Mutual Funds? ICICI Direct 24 Agents 25 Other Broker 30 Banks 9 NA 10 Interpretation -From the above stats it can be clarified that most of the people want to make their investment in mutual funds through others brokers but not from the ICICI Direct.com because ICICI Direct don’t give the full services to the customers. They just open the account and then leave the customers alone. 24% 26% 31% 9% 10% How do you /would you preferto make your investments in Mutual Funds ICICI Direct Agents Other Broker Banks NA
  • 53. 53 Ques. 6 How do you /would you prefer to make your investments in Insurance? ICICI Direct 10 Agents 45 Banks 30 Other Brokers 13 Interpretation -From the above stats it can be clarified that most of the people want to make their investment in Insurance through Agents because Agents are trustworthy. They give the good n fixed returns. Most of the customers are invested in LIC through LIC Agents. 10% 46% 31% 13% How do you /would you preferto make your investments in Insurance ICICI Direct Agents Banks Other Brokers
  • 54. 54 Ques. 7 How do you /would you prefer to make your investments in Corporate Fixed Deposit? ICICI Direct 13 Directly With The Company 25 Other Broker 20 NA 40 Interpretation -From the above stats it can be clarified that most of the people prefer to make their investment in Fixed deposits through other brokers because in Fixed deposits have the assurance that it will give fixed returns and peoples more want to invest in FD because they don’t want to take the risk. 13% 26% 20% 41% How do you /would you preferto make your investments in Corporate Fixed Deposit? ICICI Direct Directly With The Company Other Broker NA
  • 55. 55 Ques. 8 How do you /would you prefer to make your investments in Debentures / Bonds? ICICI Direct 13 Directly With Company 25 NA 60 Interpretation -From the above stats it can be clarified that most of the people don’t want to make their investment in Debentures/bonds because customers don’t have the knowledge about the debentures and bonds. They don’t have the finance to invest in the debentures and bonds. 13% 26% 61% How do you /would you preferto make your investments in Debentures / Bonds ? ICICI Direct Directly With Company NA
  • 56. 56 Ques. 9 Before the demo, were you aware that you can invest in Mutual ? Yes 80 No 18 Interpretation -From the above stats it can be clarified that most of the people around 90% peoples are already aware about that they can invest in Mutual funds through ICICI Direct.com because the ICICI Direct tell the customers at the time of when customers open their account with ICICI Direct.com and also tell them about their online portal and you can invest in mutual funds directly online thorugh ICICI Direct.com 0 20 40 60 80 100 Yes No Before the demo, were you aware that you can invest in Mutual funds through ICICI Direct Before the demo, were you aware that you can invest in Mutual funds through ICICI Direct
  • 57. 57 Ques. 10 If yes, what are the reasons for not investing in Mutual Funds through ICICI Direct.com? I am not interested as I Invest through other brokers or distributors 22 I need more knowledge on Mutual Funds before I invest 24 I need assistance to invest in MF through ICICI Direct.com 12 I do not invest in Mutual Fund 40 Interpretation -From the above stats it can be clarified that most of the people are not to invest in the Mutual Funds through ICICI Direct.com and majority is 41%. It is because of the customers’ expectations will not meet with the ICICI Direct.com and the customers not have good relationship with ICICI Direct Relationship Manager’s. 22% 25% 12% 41% If yes, what are the reasons for not investing in Mutual Funds through ICICIdirect.com I am not interested as I Invest through other brokers or distributors I need more knowledge on Mutual Funds before I invest I need assistance to invest in MF through ICICIdirect.com I do not invest in Mutual Fund
  • 58. 58 Ques. 11 Which of the following online transactions have you done in the past? I buy movie tickets online 30 I book flights or Train online 25 I buy merchandise online 15 I use Internet or Online Banking 24 I do not do any online transactions 4 Interpretation -From the above stats it can be clarified that most of the people shifted towards to online baking and 46% peoples are using online baking for their online transactions. Peoples are using the best of the online banking and it helps customers in to save their time. 13% 23% 14% 46% 4% Which of the following online transactions have you done in the past I buy movie tickets online I book flights or Train online I buy merchandise online I use Internet or Online Banking I do not do any online transactions
  • 59. 59 Ques. 12 How often do you transact online in any of the above mentioned transactions? Monthly 50 Once in a Quarter 40 Once in a Six Months 3 Once in a Year 5 Interpretation -From the above stats it can be clarified that most of the people transact online 51% in the monthly basis. Because they have the account with bank and securities and for the trading they also have to do online trading. 51% 41% 3% 5% How often do you transact online in any of the above mentioned transactions Monthly Once in a Quarter Once in a Six Months Once in a Year
  • 60. 60 Ques. 13 Which medium of news information and analysis do you use to keep yourself informed on investment products? I discuss with my friends, family and or colleagues 20 I prefer to do my own research 40 I have a financial advisor or broker or MF distributor who updates me 13 I use financial websites for comparisons and news 15 I read media reports 10 Interpretation -From the above stats it can be clarified that most of the people are discuss with their family and friends to keep the information about investment products and it is because the Family play as the role of trustee like Agent. 45% 23% 15% 17% 0% 0% Which medium of news informationand analysis do you use to keep yourself informedon investment products I discuss with my friends, family and or colleagues I prefer to do my own research I have a financial advisor or broker or MF distributor who updates me I use financial websites for comparisons and news
  • 61. 61 Ques. 14 How do you check the performance of all/any of your investments? I ask my financial advisor 28 broker or MF distributor to send me information 25 I update investment details on a third party portfolio website and check regularly 21 My bank provides me the information 10 Other - SELF 14 Interpretation -From the above stats it can be clarified that most of the people check the performance of all of their investments through Financial Advisor Because the Financial Advisor is the person who have the perfect knowledge about the stock market and having experience in the stock market. On the other side the broker also play the important role in to provide the information to customers for their investments 10% 29% 26% 21% 14% How do you check the performanceof all/any of your investments My bank provides me the information I ask my financial advisor broker or MF distributor to send me information I update investment details on a third party portfolio website and check regularly Other - SELF
  • 62. 62 Ques. 15 would you consider switching your investment relationship to ICICI Direct.com? Yes 42 No 65 Interpretation -From the above stats it can be clarified that most of the people are not to keep their Investment relationship with ICICI Direct.com because of the past experience of ICICI direct customers was not good. They do not trade through their Present Account. They do not have adequate knowledge about Stock market or maybe they are in investment relationship with other Company. 0 10 20 30 40 50 60 Yes No Would you consider switching your investment relationship to ICICIdirect.com Would you consider switching your investment relationship to ICICIdirect.com
  • 63. 63 Ques. 16 Which of the following site features did you find useful in the demo? Capital Gains Statement 19 Ease of purchase or redemption 27 Portfolio Monitoring 21 Personalized research recommendations against holdings 21 Others 10 Interpretation -From the above stats it can be clarified that the demo which I gave to the customers of ICICI it is very beneficial for them and they can easily manage their portfolio and it is easy for customers to easy of purchase and redemption of shares. 19% 28% 22% 21% 10% 0% Which of the following site featuresdid you find useful in the demo Capital Gains Statement Ease of purchase or redemption Portfolio Monitoring Personalized research recommendations against holdings
  • 64. 64 Ques. 17 How would you rate the presentation and demonstration by our representative? Good 90 Bad 1 Neutral 3 Needs Improvement 4 Interpretation -From the above stats it can be clarified that most of the people find that the Presentation and demonstration which Is given by me to the Customers of ICICI Direct was very good. They understand very well that they can become a user-friendly with the website of ICICI Direct.com and they also find that it is a good online portal where they can easily do the trading of shares. 92% 1%3% 4% How would you rate the presentation and demonstration by our representative Good Bad Neutral Needs Improvement
  • 65. 65 CHAPTER – 4 FINDINGS & CONCLUSIONS
  • 66. 66 FINDINGS  Most of the clients are not aware with concept of mutual fund and its advantages.  Customers past habits of investment is being recognized.  Clients who know about mutual fund are not investing their money into it because of lack of knowledge about mutual fund.  Customer’s problems are solved as soon as possible.  Mostly customers want to invest in fixed deposit only.  In Delhi-NCR in the Age Group of 36-40 years were more in numbers. The second most Investors were in the age group of 41-48 years and the least were in the age group of below 30 years.  In Delhi-NCR most of the Investors were Graduate or Post Graduate or Retired persons.  In Occupation group most of the Investors were Govt. employees, the second most Investors were Private employees and the least were associated with Agriculture.  About all the Respondents had a Saving A/c in Bank, 76% Invested in Fixed Deposits, Only 60% Respondents invested in Equity  Only 47% Respondents were aware about Mutual fund and its operations and 53% were not.  Among 98 Respondents only 30% had invested in Mutual Fund and 70% did not have invested in Mutual fund.
  • 67. 67 SUGGESTIONS& RECOMMENDATIONS 1. The most vital problem spotted is of ignorance. Investors should be made aware of the benefits. Nobody will invest until and unless he is fully convinced. Investors should be made to realize that ignorance is no longer bliss and what they are losing by not investing. Mutual funds offer a lot of benefit which no other single option could offer. But most of the people are not even aware of what actually a mutual fund is? They only see it as just another investment option. So the advisors should try to change their mindsets. The advisors should target for more and more young investors. Young investors as well as persons at the height of their career would like to go for advisors due to lack of expertise and time. 2. Mutual Fund Company needs to give the training of the Individual Financial Advisors about the Fund/Scheme and its objective, because they are the main source to influence the investors. 3. Before making any investment Financial Advisors should first Enquire about the risk tolerance of the investors/customers, their need and time (how long they want to invest). By considering these three things they can take the customers into consideration. 4. Younger people aged under 35 will be a key new customer group into the future, so making greater efforts with younger customers who show some interest in investing should pay off. Customers with graduate level education are easier to sell to and there is a large untapped market there. To succeed however, advisors must provide sound advice and high quality. 5. Systematic Investment Plan (SIP) is one the innovative products launched by Assets Management companies very recently in the industry. SIP is easy for monthly salaried person as it provides the facility of do the investment in EMI. Though most of the prospects and potential investors are not aware about the SIP. There is a large scope for the companies to tap the salaried persons
  • 68. 68 CONCLUSION Running a successful Mutual Fund requires complete understanding of the peculiarities of the Indian Stock Market and also the psyche of the small investors. This study has made an attempt to understand the financial behavior of Mutual Fund investors in connection with the preferences of Brand (AMC), Products, and Channels etc. I observed that many of people have fear of Mutual Fund. They think their money will not be secure in Mutual Fund. They need the knowledge of Mutual Fund and its related terms. Many of people do not have invested in mutual fund due to lack of awareness although they have money to invest. As the awareness and income is growing the number of mutual fund investors are also growing. “Brand” plays important role for the investment. People invest in those Companies where they have faith or they are well known with them. There are many AMCs in Delhi-NCR but only some are performing well due to Brand awareness. Some AMCs are not performing well although some of the schemes of them are giving good return because of not awareness about Brand. Reliance, UTI, SBIMF, ICICI Prudential etc. they are well known Brand, they are performing well and their Assets Under Management is larger than others whose Brand name are not well known like Principle etc. Distribution channels are also important for the investment in mutual fund. Financial Advisors are the most preferred channel for the investment in mutual fund. They can change investors’ mind from one investment option to others. Many of investors directly invest their money through AMC because they do not have to pay entry load. Only those people invest directly who know well about mutual fund and its operations and those have time.
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