This project report summarizes research on non-banking financial companies (NBFCs) in India. It includes an industry overview of NBFCs and RBI regulations for them. It also analyzes the macroeconomic factors impacting NBFCs and performs a five forces analysis. Additionally, it discusses the future of NBFCs and selects potential investment opportunities based on financial analysis, including an overview of Shree Global TR and Bajaj Holdings & Investment Limited.

1. PROJECT REPORT OF
IPM
On
Investment
Presented to:-
Prof. hitendra lachhwani
PGDM Programme
(2010-12)
Prepared by:-
Komal pandya(10074)
Rina prajapati(10081)
Karuna soni(10103)
Shivangi patel(10078)
Manali thacker(10111)
Meghna thacker(10108)
Jalpa maheshwari(10061)
Shruti thacker(10115)
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2. INDUSTRY OVERVIEW
ABOUT NBFC
A non-banking financial company (NBFC) is a company registered under the
Companies Act, 1956 which is primarily engaged in the business activities like
loans and advances, acquisition of shares/stock/bonds/debentures/securities issued
by government or local authority or other securities of like marketable nature,
leasing, hire-purchase, insurance business. It bars any institution whose principal
business is that of agriculture activity, industrial activity,
sale/purchase/construction of immovable property. Sundaram Finance is a strong
player in the commercial vehicle and car finance segments. Housing finance sector
benefited from realty boom since 2002-03.
RBI RULES FOR NBFC
The Reserve Bank of India has issued 'know your customer' guidelines for non-
banking financial companies, which are similar to those for commercial banks.
The board of directors of NBFCs have been advised to formulate policies and
procedures to operationalise and ensure the observance of these guidelines, which
come into immediate effect, in respect of all new customers, the bank said.
NBFCs have also been asked to complete the identification process in respect of
the existing customers by June 30, 2004.
These guidelines, the RBI said, would be applicable to all NBFCs, including
Miscellaneous Non-Banking Companies (chit fund companies) and Residuary
Non-Banking Companies.
The RBI said that the guidelines have been reviewed in the context of the
provisions of the Prevention of Money Laundering Act, 2002 and the need to put in
place systems and procedures to help control financial frauds, identify money
laundering and suspicious activities.
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3. These guidelines aim at safeguarding NBFCs from being unwittingly used for
transfer or deposit of funds derived from criminal activity or for financing of
terrorism. The guidelines are also applicable to deposits accepted from NRIs.
Guidelines for new deposits
Customer identification: 'Know Your Customer' (KYC) should be the key
guiding principle for identification of an individual / corporate customer
(depositor or borrower).
Accordingly, the KYC framework should have two-fold objective, (i) to
ensure customer identification and verifying his identity and residential
address; and (ii) to monitor transactions of a suspicious nature.
NBFCs should ensure that the identity of the customer, including beneficial
owner is done based on disclosures by customers themselves.
Typically easy means of establishing identity would be documents such as
Permanent Account Number (PAN), ration card, driving licence, Election
Commission's identity card, passport, et cetera in case of individuals and
registration certificate, partnership deed/agreement, et cetera and other
reliable documents in respect of companies, firms and other bodies.
Verification through such documents should be in addition to the
introduction by a person known to the NBFC.
Procedures for existing customers
In respect of existing customers, NBFCs should ensure that gaps and
missing information in compliance of KYC guidelines on customer
identification procedure is filled up and completed before June 30, 2004.
Ceiling and monitoring of cash transactions
NBFCs would normally not have large cash withdrawals and deposits.
However, wherever transactions of Rs 10 lakh (Rs 1 million) and above are
undertaken, they should keep record of these transactions in a separate
register maintained at branch, as well as at Registered Office.
Such information should be made available to regulatory and investigating
authorities, when demanded.
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4. Guidelines and monitoring procedures
The board of directors of NBFCs should formulate policies and procedures
to operationalise the guidelines and put in place an effective monitoring
system to ensure compliance by their branches.
Early computerisation of branch/office reporting will facilitate prompt
generation of such reports and monitoring.
Internal control systems
Duties and responsibilities should be explicitly allocated among the staff for
ensuring that policies and procedures are managed effectively and that there
is full commitment and compliance to an effective KYC programme in
respect of both existing and prospective customers/clients.
Internal audit/inspection
Internal auditors must specifically scrutinise and comment on the
effectiveness of the measures taken by branches / offices of NBFC in
adoption of KYC norms and steps towards prevention of money laundering.
Specific cases of violation should be immediately brought to the notice of
head / controlling / registered office.
Record keeping
NBFCs should prepare and maintain proper documentation on their
customer relationships and cash transactions of Rs 10 lakh and above.
The records of all such transactions should be retained for at least ten years
after the transaction has taken place and should be available for perusal and
scrutiny by audit functionaries as well as regulators and law enforcement
authorities; as and when required, at the branch as well as at registered
office.
Training of staff and management
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5. It is important that all the operating and management staff is made fully
aware of the implications and understand the need for strict adherence to
KYC norms.
NBFCs may take suitable steps to impart training to their operational staff
on anti-money laundering measures.
These guidelines have been issued under Sections 45K and 45L of the RBI Act,
1934 and any contravention of the same will attract penalties under the relevant
provisions of the Act, the RBI said.
MACROECONOMIC ANALYSIS OF NBFC
Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Int.rate 7.9 6.5 5.5 4.5 4.75 5.3 6.00 6.00 4.00 3.2
Here interest rates of banks are going down that means people will invest
in stock market. And also, if interest rate is going down, it is profitable to
get money from the suppliers.
Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
inflation 3.77 4.31 3.81 3.77 4.25 5.79 6.39 8.32 10.83 12.11
Here, if inflation increases, purchasing power decreases so people have
no extra saving to invest. So people are reluctant to invest in stock
market.
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6. FIVE FORCE MODEL OF NBFC
1.Barriers to entry
In this industrybarriers to entry is high. Because to entre in this industry, a
company have to aquire licence from RBI, which is very difficult to get. To get the
licence, you have to fulfil all the capital requirement as given by RBI. Another
reason which can become barrier is product differentiation. In this industry you can
not give extra ordinary or innovative product to your customer.
2.Threat of competitor
In non banking financial sector, threat of competitors is high. There are very large
number of banks and they are established from years. And the switching cost of
customer is very low. Customer can switch over to bank when he get some more
benefit from bank.
3.Bargaining power of Customer
Bargaining power of customer is high because there are various alternatives for
customer to take loan. And there is not much differentiation in the products so
customer can switch over to other when he get low rate. Customer has full
information regarding the alternatives in the market.
4.Bargaining power of supplier
Bargaining power of suppliers is high because there are various altenatives to
invest in. RBI also has mantion some rules and regulations which every NBFC
have to fulfil which cause benefit to supplier not the financial company.
5.Threat from substitute
There are various alternatives available with customer other than NBFC. Customer
can invest in Post Office saving, stock market or take loan from banking
institutions.
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7. SWOT ANALYSIS OF NBFC
Strenghts
The main strengths of NBFC are:
Strong customer relationship
Good understanding of regional dynamics
Ability to reach to those customers who are ignored by banks
Weaknesses
The main weaknesses of NBFC are:
Growth of banking industry
Decreasing profit due to high competition
Opportunity
The main opportunities for NBFC are:
Innovation throgh vergin segments
Going forward by doubling up with banks
Threat
The main threats for NBFCs are:
Competitive cost of funds and the ability to capitalize at every regular
intervals are key requirement to maintain competitive position
Slowly and steadily NBFC are loosing grounds to bank and it only way out
is go for partnership.
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8. ETOP ABOUT NBFC
Environmental Nature of impact Impact of each sector
sector
Economical NBFC is a rising
business and education
& standard of living are
also rising
Market Market is growing and
consumers are
increasing.
Regulatory
RBI has made strict
rule for NBFC than
Bank
Transfer of money,
Social easily availability of
loan.
Supplier Investors do more
access in banking to
protect their money.
Credit card, debit card,
Technology online payment. But
not that much facility a
bank has.
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9. FUTIRE OF NBFC
The RBI announced in its latest budget that will give additional branch
licenses to private sector banks and NBFCs that meet the central bank's
eligibility criteria. These new licenses should be awarded shortly. A number
of NBFCs, microfinance companies and industrial houses are planning to opt
for the same.
According to the recommendations of the Usha Thorat committee, the core
Tier-1 capital ratio for NBFCs needs to reach 12% over the next three years.
Thus if these recommendations are accepted, companies will have to shore
up their capital sufficiently to account for growth as well as regulatory
requirements. Provisioning and other norms may also be brought similar to
that of banks in a phased manner.
As per the committee, risk weights for NBFCs not sponsored by banks
or that do not have any bank as part of the group may be raised to
150% for capital market exposures and 125% for commercial real
estate exposures. Thus, there are a number of regulatory concerns that
still need to be ironed out with regards to this space. However the
prospects of certain players receiving a banking license, and limits on
risky exposures, and maintaining capital buffers are welcome reforms.
COMPANY SELECTION AND CUTOFF
To make optimum portfolio we have consider 4 parameters. They are net sales, net
profit, EPS and total assets. By comparing the companies we have selected 10 best
companies. They are:
Relience Cap
Oscar
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10. Bajaj Finserve
Bajaj Holdings
Shree Global TR
Tata Investment Corporation
Religare
India Bulls
JM Finance
L & T Finance
From these 10 companies, we have made calculation of cutoff and we get 4
companies in cutoff calculation. They are:
Shree Global TR
Bajaj Finserve
Tata Investment
Bajaj Holdings
To get one company we had done fundamental analysis. By comparing ratios and
giving weightage we have selected “L & T Finance” in our portfolio.
COMPANY OVERVIEW
Shree Global TR
1980 - Founded in 1980 as Benson Steels Ltd by Kenneth Benson and
Merilyn Benson and is finance business..
1981 - Paul Benson Become a part of Benson Steel as President.
1994 - Paul Benson retired in 1994.
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11. 1995 - Ken Benson appointed as president and CEO.
2005 - Shree Global Tradefin Ltd. acquired Sanford Steel Pvt Ltd.
- Shree Global Tradefin Ltd has informed that the Board of Directorsof the
Company on October 21, 2005, has decided that for consideration of Scheme of
Amalgamation of M/s Harold International Ltd, M/s. TrumpInvestments Ltd, M/s.
Tradition Exim Ltd, M/s. Sanford Steel Pvt Ltdand M/s. Salvador Steel Pvt Ltd
with the Company, and reduction ofshare capital of the Company. For this the
Board will meet again onOctober 26, 2005.
- There was a plant expansion of 13000 square feet at Bolton headquarters, which
allowed Benson Steel to service customers betterand faster.
2006 - Mumbai High Court had approved the scheme of amalgamation of four
companies with Shree Global Tradefin Ltd.
2007 - There was a re-appointment of Shri. Prashant Puri, as Director of the
Company.
Financial Ratios of Shree Global TR
Mar '11 Mar '10 Mar '09
Investment Valuation Ratios
Dividend Per Share -- -- --
Net Operating Profit Per Share (Rs) 33.98 17.13 14.94
Profitability Ratios
Net Profit Margin(%) -0.48 0.34 0.02
Return On Capital Employed(%) -- 0.16 --
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12. Return On Net Worth(%) -- 0.56 --
Adjusted Return on Net Worth(%) -1.56 0.56 0.03
Return on Long Term Funds(%) -0.44 0.16 0.04
Liquidity And Solvency Ratios
Current Ratio 1.79 2.22 0.89
Long Term Debt Equity Ratio 2.50 2.47 --
Management Efficiency Ratios
Asset Turnover Ratio 5,230.55 564.92 474.62
Number of Days In Working Capital 159.96 429.12 117.07
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit -- -- --
Dividend Payout Ratio Cash Profit -- -- --
Earnings Per Share -0.16 0.06 --
Book Value 10.48 10.65 10.59
Bajaj Holdings
Bajaj Holdings & Investment Limited [(BHIL) – erstwhile Bajaj Auto Limited ]
was de-merged as per Order dated 18 December 2007 of the Hon‟ble Bombay
High Court, whereby its manufacturing undertaking has been transferred to the
new Bajaj Auto Limited (BAL) and its strategic business undertaking consisting of
wind farm business and financial services business has been vested with Bajaj
Finserv Limited (BFS). All the businesses and all properties, assets, investments
and liabilities of erstwhile Bajaj auto Ltd, other than the manufacturing
undertaking and the strategic business undertaking, now remain with BHIL. (For
details of the scheme refer Demerger News) .
Post-demerger, BHIL holds more than 30% shares each in BAL and BFS. Going
forward, BHIL will focus on new business opportunities. BAL and BFS will be
able to tap (on an arm‟s length basis) into BHIL‟s cash pool to support future
growth opportunities. BHIL by having 30% stake in both BAL and BFS will
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13. benefit from the future growth of these companies.
BHIL has been registered as a Non-Banking Financial Company (NBFC) under the
Registration No. N-13.01952 dated 29 October 2009 with Reserve Bank of India
(RBI). The Company is classified as a „Systemically Important Non-deposit taking
NBFC‟ as per RBI Regulations. .
Financial ratios
Particular 2011 2010 2009
Liquidity Ratios
Debt/Equity Ratio 0.00 0.00 0.00
Current Ratio 0.75 0.91 0.96
Turnover Ratios
Inventory Turnover Ratio 0.00 0.00 0.00
Fixed Assets Turnover Ratio 10.49 7.96 2.17
Debtors Turnover Ratio 0.00 0.00 0.00
Interest Coverage Ratios 0.00 0.00 663.00
Profitability Ratios
Operating Profit Margin 99.52 99.39 89.87
PAT/Total Income 92.91 94.82 82.91
NPM (Net Profit Margin) 93.07 94.98 88.47
Return on Capital Employed 25.39 22.97 6.28
Return on Networth 23.75 21.96 6.19
News regarding Bajaj Holding
Bajaj Holdings has reported a net profit of Rs 58.82 crores for the quarter
ended June 30,2011 down by 54.91%, 130.44 crores.
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14. Tata Investment
Tata Investment Corporation Limited was promoted by Tata Sons Ltd., in 1937,
under the name The Investment Corporation of India Limited. The Company
remained a closely held company till 1959, when it became one of the few publicly
held investment companies listed on the Stock Exchange, Mumbai. During the
1960s and 1970s the Company‟s activities underwent a gradual transformation
from assisting in the establishment of new ventures, to acting as an investment
company with a diversified portfolio of investments.
The original inspiration for launching Tata Investment Corporation Limited (TICL)
was to help set up and nurture small and medium-sized enterprenuers and their
companies.
The Company‟s activities comprises primarily of investing in long term
investments in equity shares, listed and unlisted, and equity related securities of
companies in a wide range of industries. The major sources of income of the
Company consist of dividend income and profit on sale of investments. Over the
years, through a gradual and judicious portfolio management Tata Investment has
built up a portfolio of investments which had a book value of over Rs.1305.52
crores with an approximate market value of Rs.3638.07 crores as at 31st March,
2010 spread over 197 companies in various industries.
Financial Ratios
Particular 2011 2010 2009
Liquidity Ratios
Debt/Equity Ratio 0.00 0.00 0.47
Current Ratio 38.54 27.88 3.58
Turnover Ratios
Inventory Turnover Ratio 0.00 0.00 0.00
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15. Fixed Assets Turnover Ratio 0.00 0.00 0.00
Debtors Turnover Ratio 37.31 128.29 59.26
Interest Coverage Ratios 258.21 0.00 0.00
Profitability Ratios
Operating Profit Margin 95.11 - -
NPM (Net Profit Margin) 80.61 - -
Return on Capital Employed 14.24 - -
Return on Networth 12.11 - -
Future news about Tata Investment
Tata Investment Corporation has recently increased its stake in Tata Elxsi to 2.04%
holding 6.34 lakh shares. The company will continue investing is various
companies in future.
Bajaj Finserve
Bajaj Finance Ltd. (BAFL) was incorporated as a Private Limited Company on
25th March, 1987. It became a deemed Public Limited Company by virtue of
Section 43(A) of the Companies Act, 1956 w.e.f., 20th October, 1987.
Bajaj Finance Ltd was promoted by erstwhile Bajaj Auto Limited and Bajaj Auto
Holdings Limited. Bajaj Auto Limited is one of the leading manufacturers of two
wheelers & three wheelers in the country and Bajaj Auto Holdings Limited is an
investment company that is a wholly owned subsidiary company of Bajaj Holdings
& Investment Limited. As per the Scheme of Demerger of erstwhile Bajaj Auto
Limited, the shareholding of Bajaj Auto Limited in BAFL has now been vested
with Bajaj Finserv Limited.
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16. Bajaj Finance Ltd is engaged primarily in the business of financing of two
wheelers, consumer durables, personal loans, small business loans, mortgages,
construction equipment, and loan against securities. Bajaj Finance Ltd made a
Public Issue of Equity Shares in 1994 and its Equity Shares are listed on Bombay
Stock Exchange Limited and National Stock Exchange of India Limited.
Bajaj Finance Ltd made a Preferential Issue of Equity Shares to the Promoters and
a few foreign corporate bodies and also warrants to the Promoters in 2006. Bajaj
Finance Ltd made a Rights Issue of Equity Shares and Non-Convertible
Debentures with detachable warrants to the existing shareholders in 2006-07.
The present Paid-up Capital of the Company is Rs. 365,960,760. Bajaj Finance
Ltd. has its headquarters at Pune and has more than 63 branches spread across the
country.
Financial Ratios
Mar
Mar '10 Mar '09
'11
Profitability Ratios
Operating Profit Margin(%) -- -- 81.61
Profit Before Interest And Tax Margin(%) -- -- 54.23
Gross Profit Margin(%) -- -- 55.03
Cash Profit Margin(%) -- -- 62.54
Adjusted Cash Margin(%) 46.69 39.55 62.54
Net Profit Margin(%) 150.39 26.18 36.38
Adjusted Net Profit Margin(%) -- -- 36.38
Return On Capital Employed(%) -- -- 4.17
Return On Net Worth(%) -- -- 3.43
Liquidity And Solvency Ratios
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17. Current Ratio 0.15 0.79 1.17
Quick Ratio 0.15 0.72 0.91
Debt Equity Ratio -- 0.26 0.26
Long Term Debt Equity Ratio -- 0.26 0.26
Debt Coverage Ratios
Interest Cover -- -- 6,331.00
Total Debt to Owners Fund -- 0.26 0.26
Management Efficiency Ratios
Inventory Turnover Ratio -- -- --
Debtors Turnover Ratio 112.50 68.33 38.76
Investments Turnover Ratio -- -- --
Fixed Assets Turnover Ratio -- -- --
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit 8.62 49.64 40.93
Dividend Payout Ratio Cash Profit 8.19 30.15 23.80
L & T Finance
L&T Finance Limited (LTF) is a subsidiary of Larsen and Toubro. It was
incorporated as a Non Banking Finance Company in November 1994. Through
LTF, L&T aims at making a strong foray in the ever-expanding financial services
sector.
As a business philosophy, we fund income generating assets/activities while
maintaining a clear focus on returns.
LTF offers a spectrum of financial products and services for trade, industry and
agriculture. The company's focus segments are corporate products, construction
equipment, CVs and tractors. Despite the turbulence in the financial services
markets over the past few years, L&T Finance has adapted well to the changing
market dynamics to remain consistently profitable.
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18. Like the rest of the companies in L&T group, LTF is also professionally managed.
LTF shares the professional values and ethos of its parent company, and has
acquired and maintained a reputation for reliability, transparency of operations and
absolute integrity. A steady growth rate validates the trust that industry has reposed
in the company.
Financial ratio
Perticulars 2011
Investment Valuation
Ratios
Face Value 10.00
Dividend Per Share --
Operating Profit Per Share 0.04
(Rs)
Net Operating Profit Per 0.04
Share (Rs)
Free Reserves Per Share 2.57
(Rs)
Bonus in Equity Capital --
Profitability Ratios
Operating Profit Margin(%) 88.83
Profit Before Interest And 88.83
Tax Margin(%)
Gross Profit Margin(%) 88.83
Cash Profit Margin(%) 81.40
Adjusted Cash Margin(%) 81.40
Net Profit Margin(%) 2.37
Adjusted Net Profit 2.37
Margin(%)
Return On Capital 0.23
Employed(%)
Return On Net Worth(%) --
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19. Adjusted Return on Net 0.2
Worth(%)
Future Plans
Establish a global standards forum for bench marking global projects.
Create a repository of project management cases for the benefit of future learning.
Create a core group focused on project management research.
Create an innovation hub in project management
Establish L&T BOK in project management.
Religare
Starting as a pure-play retail broking operation, Religare has evolved into an
integrated financial services group in less than a decade. Religare has a presence
across the Indian financial services spectrum – it offers an integrated suite of
products and services comprising broking, distribution, lending, asset management,
wealth management and insurance. Anchored in India, they are now building an
emerging markets financial services business.
The Religare name is ubiquitous in the financial services space in India. Religare‟s
network of 2,209 business locations in 579 towns and cities (as of 31st March,
2011) gives its presence across the length and breadth of the country. Religare
touches the lives of over a million people, be it providing small investors access to
profitable opportunities in the capital markets, linking agriculturists and traders in
the mandis of India to global commodity markets, assisting the young and old alike
to accumulate savings to achieve their life goals, helping entrepreneurial dreams
come to life by funding thousands of micro, small and medium enterprises or
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20. providing savings and protection options to deal with the uncertainties of life.
Financial Ratios
Particular 2011 2010 2009
Liquidity Ratios
Debt/Equity Ratio 0.02 0.04 -
quick Ratio 0.49 97.38 2.01
Turnover Ratios
Inventory Turnover Ratio - 155.54 882.68
Fixed Assets Turnover Ratio 0.00 0.00 0.00
Debtors Turnover Ratio 22.02 25.49 248.66
Interest Coverage Ratios 4.43 0.55 6.78
Profitability Ratios
Operating Profit Margin 59.68 -28.09 85.83
NPM (Net Profit Margin) 41.1 -58.15 73.49
Return on Capital Employed 3.47 0.43 4.91
Return on Networth 12.11 - -
JM Finance
JM Financial Ltd is one of the leading players in the financial services sector with
business interests in investment banking, equity broking, wealth management,
lending, asset management and alternative asset management. These diversified
offerings have helped JM Financial establish itself as a one stop financial shop and
develop strong relations with clients. Accordingly, we maintain the fundamental
grade of „4/5‟, indicating that JM Financial‟s
Fundamentals are ‘superior’ relative to other listed securities in India. JM
Financials is focusing on the high yield cash segment which should help it report
stable yields going forward. Further, its emphasis on expanding its business
through a cost-effective franchise-based model should help it to report strong
operational performance.
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21. Expect two-year revenue CAGR of 11%
CRISIL Equities expects the company‟s revenue to grow at a CAGR of 35.9% to
Rs 11 bn during FY10 to FY12, buoyed by the expected strength in the capital
markets. PAT is expected to increase at a CAGR of 30.5% to Rs 1.9 bn over FY10
to FY12. EPS is expected to be Rs 1.8 in FY11 and Rs 2.6 in FY12.
JM Financial Limited is an investment holding company and is engaged in various
financial services businesses through its subsidiaries and associate companies forming a
financial services group, JM Financial. The Company operates in four segments:
Investment banking and securities business, securities funding and fund-based activities,
alternative asset management and asset management. Investment banking and securities
business includes advisory and execution services. Securities funding and fund based
activities include providing finance against securities to a diverse range of corporates
and non-corporate clients. Alternative asset management includes managing funds of
institutional and large non-institutional investors. Assets management includes
managing mutual fund assets through several schemes offering a range of investment
options to a large number of investors. In April 2010, it acquired the remaining 50%
interest in Infinite India Investment Management Pvt. Ltd.
JM Financial Asset Management- This company offers mutual fund business that has
distributor network of 10,000 spread across in 52 locations in India. It offers 30 products
to more than 4 lakh investors that comprise institutional and individual.
Financial Ratio
Particular 2011 2010 2009
Liquidity Ratios
Debt/Equity Ratio 0.00 0.00 0.00
Current Ratio 1.65 1.51 1.9
Turnover Ratios
Inventory Turnover Ratio - - -
Fixed Assets Turnover Ratio - - -
Debtors Turnover Ratio - - -
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22. Interest Coverage Ratios 807.15 1221.38 392.04
Profitability Ratios
Operating Profit Margin 46.92 50.65 62.12
NPM (Net Profit Margin) 22.82 49.65 32.45
Return on Capital Employed 1.24 2.87 0.91
Return on Networth 0.62 2.86 0.48
Oscar
Oscar investment Ltd.was incorporated on january 25, 1978 as a public limited
company in mumbai. Subsequantly, registered office of the company was shifted
from mumbai ti delhi.
The company is promoted by Mr. Malvinder Mohan Singh and Mr. Shivinder
Mohan Singh, promoters of Renbaxy Laboratories Limited, India‟s largest
pharmaceuticle xompany.
The company is a non banking finance company registered with RBI as Loan and
Investment company. The company is a part of Ranbaxy Promoter Group and
holds a significant stake in Ranbaxy and other companies promoted by promoters
of Ranbaxy.
Financial Ratios
Particular 2011 2010 2009
Liquidity Ratios
Debt/Equity Ratio 0.04 0.34 0.05
Current Ratio 0.89 4.49 4.31
Turnover Ratios
Inventory Turnover Ratio 0.00 0.00 0.00
Fixed Assets Turnover Ratio 0.00 0.00 0.00
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23. Debtors Turnover Ratio 2660.06 1037.81 15152.20
Interest Coverage Ratios 987.17 - 59.58
Profitability Ratios
Operating Profit Margin 96.97 - 99.06
NPM (Net Profit Margin) 63.78 79.45 86.95
Return on Capital Employed 4.62 - 81.25
Return on Networth 3.18 - 73.72
Relience Cap
Reliance Capital, a constituent of CNX Nifty Junior and MSCI India, is a part of
the Reliance Group. It is one of India's leading and amongst most valuable
financial services companies in the private sector.
Reliance Capital has interests in asset management and mutual funds; life and
general insurance; commercial finance; equities and commodities broking;
investment banking; wealth management services; distribution of financial
products; exchanges; private equity; asset reconstruction; proprietary investments
and other activities in financial services.
Reliance Mutual Fund is amongst top two Mutual Funds in India with over seven
million investor folios. Reliance Life Insurance and Reliance General Insurance are
amongst the leading private sector insurers in India. Reliance Securities is one of
India‟s leading retail broking houses. Reliance Money is one of India‟s leading
distributors of financial products and services.
Reliance Capital has a net worth of Rs. 7,844 crore (US$ 2 billion) and total assets
of Rs. 33,356 crore (US$ 7 billion) as on September 30, 2011.
Financial Ratios
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24. Mar '11 Mar '10 Mar '08
Profitability Ratios
Operating Profit Margin(%) 76.20 72.59 79.74
Profit Before Interest And Tax Margin(%) 73.30 71.63 77.95
Gross Profit Margin(%) 75.42 71.82 79.02
Cash Profit Margin(%) 11.91 14.52 34.83
Adjusted Cash Margin(%) 11.91 14.52 34.83
Net Profit Margin(%) 12.10 14.30 32.48
Adjusted Net Profit Margin(%) 12.10 14.30 32.48
Return On Capital Employed(%) 5.64 9.02 11.48
Return On Net Worth(%) 3.29 4.92 14.45
Liquidity And Solvency Ratios
Current Ratio 6.50 2.48 1.57
Quick Ratio 13.81 7.43 26.31
Debt Equity Ratio 2.63 1.72 2.02
Long Term Debt Equity Ratio 2.50 1.49 1.26
Debt Coverage Ratios
Interest Cover 1.16 1.35 1.91
Management Efficiency Ratios
Inventory Turnover Ratio -- -- --
Debtors Turnover Ratio 26.69 23.35 22.05
Asset Turnover Ratio 13.75 12.54 8.79
Average Raw Material Holding -- -- --
Average Finished Goods Held -- -- --
Number of Days In Working Capital 2,755.29 1,216.93 1,412.84
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit 70.32 55.03 19.29
Dividend Payout Ratio Cash Profit 66.18 52.24 18.88
India Bulls
Tolani Institute of Management Studies Page 24

25. Indiabulls Financial Services Ltd, one of India's leading non-banking financial
companies (NBFCs) is leading provider of lending and other financial products
including home loans, loans against property, commercial vehicle loans, and
commercial credit to prime corporates.
Indiabulls Housing Finance Ltd, a SARFAESI notified Housing Finance Company
is a wholly owned subsidiary of Indiabulls Financial Services Ltd; provides
competitively priced home loans to both self employed & salaried segment clients.
With dedication to serve the customers at maximum possible locations, Indiabulls
Financial Services has a wide network of 170 branches spread over 87 cities across
India. Indiabulls Housing Finance has one of the fastest Home Loan delivery
systems in India. Easy & convenient online access of Indiabulls‟ Home Loan
account saves time, efforts & money wasted in visiting offices of home loan
providers for every single query or requirement. All the security measures for
online account access are taken care of at Indiabulls Housing Finance.
Indiabulls Home Loans is emerging as the most preferred brand in housing finance.
Indiabulls Financial Services has over 3,00,000 satisfied customers & cumulative
disbursements of loan amount over Rs.50,000 Cr. Indiabulls believes in forging a
deep personal bond with each of its valued customers. At Indiabulls Housing
Finance, Customer care is of utmost importance. At Indiabulls all the customers
feel privileged as they get guidance in all aspects of home buying such as selecting
the suitable property, checking approvals of the project, filing documents,
registration of the property, choosing EMI & tenure of their loan to accommodate
Tolani Institute of Management Studies Page 25

26. their financial resources etc. Indiabulls team always tries to help customers even
going beyond the call of duty.
Indiabulls Financial Services enjoys AA+ rating and has one of the lowest leverage
and highest net worth among the peer group. Indiabulls has very stable long term
financing from leading Indian and international banks and financial institutions.
Indiabulls is serving its customers over a decade with passion & commitment.
Fancial Ratio
Mar '11 Mar '10 Mar 09
Face Value 2.00 2.00 2.00
Dividend Per Share 10.00 5.00 2.00
Operating Profit Per Share (Rs) 49.03 29.94 47.66
Net Operating Profit Per Share (Rs) 65.22 45.85 70.22
Free Reserves Per Share (Rs) 118.78 121.10 110.91
Bonus in Equity Capital 24.73 24.82 30.33
Profitability Ratios
Operating Profit Margin(%) 75.16 65.30 67.87
Profit Before Interest And Tax Margin(%) 74.66 64.76 67.46
Gross Profit Margin(%) 74.70 64.78 67.49
Cash Profit Margin(%) 28.10 18.56 11.45
Adjusted Cash Margin(%) 28.10 18.56 11.45
Net Profit Margin(%) 29.99 18.58 10.67
Adjusted Net Profit Margin(%) 29.99 18.58 10.67
Return On Capital Employed(%) 7.31 8.37 12.55
Return On Net Worth(%) 14.66 6.32 5.72
Adjusted Return on Net Worth(%) 13.51 6.13 5.95
Return on Assets Excluding Revaluations 133.50 130.83 120.26
Return on Assets Including Revaluations 133.50 130.83 120.26
Return on Long Term Funds(%) 8.76 13.00 18.17
Liquidity And Solvency Ratios
Tolani Institute of Management Studies Page 26

27. Current Ratio 3.13 1.97 2.07
Quick Ratio 18.38 10.11 20.20
Debt Equity Ratio 4.00 1.71 2.14
Long Term Debt Equity Ratio 3.17 0.75 1.17
Debt Coverage Ratios
Interest Cover 1.98 1.76 1.30
Total Debt to Owners Fund 4.00 1.71 2.14
Financial Charges Coverage Ratio 1.97 1.74 1.27
Financial Charges Coverage Ratio Post Tax 1.80 1.51 1.21
Management Efficiency Ratios
Inventory Turnover Ratio -- -- --
Debtors Turnover Ratio 274.36 196.21 446.79
Asset Turnover Ratio 39.25 29.92 40.23
Number of Days In Working Capital 3,059.35 2,523.02 1,650.10
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit 59.42 71.00 35.54
Tolani Institute of Management Studies Page 27