Nikita icici direct project

A
TRAINING REPORT
ON
ICICI DIRECT
SUBMITTED TO:
MAHARISHI DAYANAND UNIVERSITY, ROHTAK
in the partial fulfillment of the requirements for the award
of the degree of
MASTER OF BUSINESS ADMINISTRATION
(INDUSTRY INTEGRATED)
(II Semester)
Submitted by
NIKITA KANAUJIA
Regn. No.-1073901750
1

GURUGRAM BUSINESS SCHOOL
ELC CODE: 151012055Plot no 467, Near H B Town, Old Paradi
Naka,Bhandara Road, Nagpur, Maharashtra
2

DECLARATION
I, hereby declare that the Training Report conducted at
ICICI DIRECT, NAGPUR
Under the guidance of
Mr. Ajay Patole
Submitted in Partial fulfillment of the requirements for the
Degree of
MASTER OF BUSINESS ADMINISTRATION
(Industry Integrated)
TO
MAHARISHI DAYANAND UNIVERSITY, ROHTAK
Is my original work and the same has not been submitted for the
award of any other Degree/diploma/fellowship or other similar titles
or prizes.
Date: NIKITA KANAUJIA
Place: Regn. No.:
107390175
3

CERTIFICATE
This is to certify that Ms. Nikita Kanaujia a student of the
Maharishi Dayanand University Rohtak, has prepared her Training
Report at ICICI DIRECT under my guidance. She has fulfilled all
requirements leading to award of the degree of MBA (Industry
Integrated). This report is the record of bonafide training undertaken
by her and no part of it has been submitted to any other University or
Educational Institution for award of any other
degree/diploma/fellowship or similar titles or prizes.
I wish her all success in life.
(Signature)
Mr. Ajay Patole
<Faculty & Coordinator>
<B.E , MBA>
4

CERTIFICATE
This is to certify that Ms. Nikita Kanaujia who is pursuing MBA
(Industry Integrated) course of Maharishi Dayananad University,
Rohatak, at Gurugram Business School, Nagpur has undergone
management training.
Her performance during the training was found to be GOOD.
We wish her success for her future Endeavour’s.
MR. SUMAN BHATTACHARYA
5

ACKNOWLEGDEMENT
Apart from the efforts of me, the success of any project depends largely on the
encouragement and guidelines of many others. I take this opportunity to express my
gratitude to the people who have been instrumental in the successful completion of this
project.
First off all, I would like to extend my gratitude towards MAHARISHI DAYANAND
UNIVERSITY, Rohatak for giving me an opportunity to take up this project as
preparing this project has definitely broadened my horizons.
Next, I would like to extend my thanks to GURUGRAM BUSINESS SCHOOL,
NAGPUR for providing me with the necessary ware withal to successfully complete this
project
.I would also like to thank my college director Mr. Sumit Walia, my very helpful project
guide Prof. Ajay Patole for his continuous support and guidance
.I would also like to express my gratitude towards Mr. Suman Bhattacharya at ICICI
Direct. D, for helping me whenever the need arise in spite of their busy schedules and
for encouraging me and providing me with the necessary information and material, the
blend of which has made it a Knowledgeable project
Last but not the least; my heartfelt love for my friends, whose constant support and
blessings helped me throughout this project.
6

Contents:
SR.NO PARTICULARS PAGE
NO
1 Cover Page 1
2 Declaration 2
3 Certificate of the College 3
4 Certificate of the Organization 4
5 Acknowledgement 5
1 INTRODUCTION 8-24
1.1 General Introduction about the sector 8
1.2 Industry Profile 14-24
1.3 a. Origin and development of the
industry
14
b. Growth and present status of the
industry
22
C. Future of the Industry 24
2 Profile of ICICI Direct 26-46
2.1 Origin of the ICICI Direct 26
2.2 Growth and development of ICICI Direct 32
2.3 Present status of ICICI Direct 35
2.4 Functional Departments of ICICI Direct 36
2.5 Structure of ICICI Direct 41
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2.6 Product and Service profile of ICICI
Direct
42
2.7 Market Profile of ICICI Direct 46
3 DISCUSSIONS ON TRAINING 48-50
3.1 Key Learnings 48
3.2 SWOT Analysis 49
Achievements and Awards
8

INTRODUCTION
FINANCIAL SECTOR
Financial Sector of India is intrinsically strong, operationally sundry and exhibits
competence and flexibility besides being sensitive to India’s economic aims of
developing a market oriented, industrious and viable economy. An established financial
sector assists greater standards of endowments and endorses expansion in the economy
with its intensity and exposure. The fiscal sector in India entails banks, financial
organization, markets and services. The sector is classified as organized and
conventional that is also recognized as unofficial finance market. Fiscal transactions in
an organized industry are executed by a number of financial organizations which are
commercial in nature and offer monetary services to the society. Further classification
includes banking and non-banking enterprises, often recognized as activities that are
client specific.
The chief controller of the finance in India is the Reserve Bank of India (RBI) and is
regarded as the supreme organization in the fiscal structure. Other significant fiscal
organizations are business banks, domestic rural banks, cooperative banks and
development banks. Non-banking fiscal organizations entail credit and charter firms and
other organizations like Unit Trust of India, Provident Funds, Life Insurance
Corporation, mutual funds, GIC, etc.
Financial Sector of India – Chief Characteristics :-
 The financial sector of India allows Most Favored Nation (MFN) reputation to all
international banks and firms offering financial facilities.
 The sector has relaxed previous MFN tax exemption on banking activities.
 Allows 12 new financial bank division authorizations every year to
international banks, that is higher as compared to the existing 8 every year.
9

 Raises the 10% limit of reinsurance by insurance firms in India.
 Permits 51% foreign endowment in fiscal advisory, issuing, hiring, business
enterprise capital, business banking and non-banking credit firms.
Financial services refer to services provided by the finance industry. The finance
industry encompasses a broad range of organizations that deal with the management
of money. Among these organizations are credit unions, banks, credit
card companies, insurance companies, consumer finance companies, stock
brokerages, investment funds and some government sponsored enterprises. As of
2004, the financial services industry represented 20% of the market capitalization of
the S&P 500 in the United States.
Banks:-
A "commercial bank" is what is commonly referred to as simply a "bank". The term
"commercial" is used to distinguish it from an "investment bank," a type of financial
services entity which, instead of lending money directly to a business, helps businesses
raise money from other firms in the form of bonds (debt) or stock (equity).
Banking services
• The primary operations of banks include:
• Keeping money safe while also allowing withdrawals when needed
• Issuance of checkbooks so that bills can be paid and other kinds of payments can
be delivered by post
• Provide personal loans, commercial loans, and mortgage loans (typically loans to
purchase a home, property or business)
• Issuance of credit cards and processing of credit card transactions and billing
• Issuance of debit cards for use as a substitute for checks
• Allow financial transactions at branches or by using Automatic Teller
Machines (ATMs)
• Provide wire transfers of funds and Electronic fund transfers between banks
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• Facilitation of standing orders and direct debits, so payments for bills can be
made automatically
• Provide overdraft agreements for the temporary advancement of the Bank's own
money to meet monthly spending commitments of a customer in their current
account.
• Provide internet banking system to facilitate the customers to view and operate
their respective accounts through internet.
• Provide Charge card advances of the Bank's own money for customers wishing
to settle credit advances monthly.
• Provide a check guaranteed by the Bank itself and prepaid by the customer, such
as a cashier's check or certified check.
Other types of bank services:-
• Private banking - Private banks provide banking services exclusively to high
net worth individuals. Many financial services firms require a person or
family to have a certain minimum net worth to qualify for private banking
services.[3]
Private banks often provide more personal services, such as
wealth management and tax planning, than normal retail banks.
• Capital market bank - bank that underwrite debt and equity, assist company
deals (advisory services, underwriting and advisory fees), and restructure
debt into structured finance products.
• Bank cards - include both credit cards and debit cards. Bank Of America is
the largest issuer of bank cards.
• Credit card machine services and networks - Companies which provide credit
card machine and payment networks call themselves "merchant card
providers".
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Foreign exchange services
Foreign exchange services are provided by many banks around the world. Foreign
exchange services include:
 Currency exchange - where clients can purchase and sell foreign currency
banknotes.
 Foreign Currency Banking - banking transactions are done in foreign currency.
 Wire transfer - where clients can send funds to international banks abroad.
Investment services
 Asset management - the term usually given to describe companies which
run collective investment funds. Also refers to services provided by others, generally
registered with the Securities and Exchange Commission as Registered Investment
Advisors.
 Hedge fund management - Hedge funds often employ the services of "prime
brokerage" divisions at major investment banks to execute their trades.
 Custody services - the safe-keeping and processing of the world's securities
trades and servicing the associated portfolios. Assets under custody in the world are
approximately $100 trillion.[5]
Insurance:-
Insurance brokerage - Insurance brokers shop for insurance (generally corporate
property and casualty insurance) on behalf of customers. Recently a number of websites
have been created to give consumers basic price comparisons for services such as
insurance, causing controversy within the industry.[6]
 Insurance underwriting - Personal lines insurance underwriters actually
underwrite insurance for individuals, a service still offered primarily through
agents, insurance brokers, and stock brokers. Underwriters may also offer similar
commercial lines of coverage for businesses. Activities include insurance
12

and annuities, life insurance, retirement insurance, health insurance, and property &
casualty insurance.
 Reinsurance - Reinsurance is insurance sold to insurers themselves, to protect
them from catastrophic losses.
Other financial services :-
 Intermediation or advisory services - These services involve stock brokers
(private client services) and discount brokers. Stock brokers assist investors in
buying or selling shares. Primarily internet-based companies are often referred to as
discount brokerages, although many now have branch offices to assist clients. These
brokerages primarily target individual investors. Full service and private client firms
primarily assist and execute trades for clients with large amounts of capital to invest,
such as large companies, wealthy individuals, and investment management funds.
 Private equity - Private equity funds are typically closed-end funds, which
usually take controlling equity stakes in businesses that are either private, or taken
private once acquired. Private equity funds often use leveraged buyouts (LBOs) to
acquire the firms in which they invest. The most successful private equity funds can
generate returns significantly higher than provided by the equity markets
 Venture capital is a type of private equity capital typically provided by
professional, outside investors to new, high-potential-growth companies in the
interest of taking the company to an IPO or trade sale of the business.
 Angel investment - An angel investor or angel (known as a business angel or
informal investor in Europe), is an affluent individual who provides capital for a
business start-up, usually in exchange for convertible debt or ownership equity. A
small but increasing number of angel investors organize themselves into angel
groups or angel networks to share research and pool their investment capital.
 Conglomerates - A financial services conglomerate is a financial services firm
that is active in more than one sector of the financial services market e.g. life
insurance, general insurance, health insurance, asset management, retail banking,
wholesale banking, investment banking, etc. A key rationale for the existence of
13

such businesses is the existence of diversification benefits that are present when
different types of businesses are aggregated i.e. bad things don't always happen at
the same time. As a consequence, economic capital for a conglomerate is usually
substantially less than economic capital is for the sum of its parts.
 Debt resolution is a consumer service that assists individuals that have too much
debt to pay off as requested, but do not want to file bankruptcy and wish to payoff
their debts owed. This debt can be accrued in various ways including but not limited
to personal loans, credit cards or in some cases merchant accounts. There are many
services/companies that can assist with this. These can include debt
consolidation, debt settlement and refinancing.
14

INDUSTRYPROFILE:
I
 ORIGIN AND DEVELOPMENT OF THE INDUSTRY :-
One of the major economic developments of this decade has been the recent takeoff
of India, with growth rates averaging in excess of 8% for the last four years, a stock
In 2006, total equity issuance reached $19.2bn in India, up 22 per cent.
market that has risen over three-fold in as many years with a rising inflow of foreign
investment Merger and acquisition volume was a record $27.8bn, up 38 per cent, driven
by a 371 percent increase in outbound acquisitions exceeding for the first time inbound
deal volumes. Debt issuance reached an all-time high of $13.7bn, up 28 per cent from a
year earlier. Indian companies were also among the world's most active issuers of
depositary receipts in the first half of 2006, accounting for one in three new issues
globally, according to the Bank of New York.
The questions and challenges that India faces in the first decade of the
new millennium are therefore fundamentally different from those that it has wrestled
with for decades after independence. Liberalization and globalization have breathed
new life into the foreign exchange markets while simultaneously besetting them with
new challenges. Commodity trading, particularly trade in commodity futures, have
practically started from scratch to attain scale and attention. The banking industry
has moved from an era of rigid controls and government interference to a more
market-governed system. New private banks have made their presence felt in a very
strong way and several foreign banks have entered the country. Over the years,
microfinance has emerged as an important element of the Indian financial system
increasing its outreach and providing much-needed financial services to millions of
poor Indian households.
Indian Economy and Financial Markets since liberalization
The Domestic Economy
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There is hardly a facet of economic life in India that has not been radically altered
since the launch of economic reforms in the early 90’s. The twin forces of globalization
According to the official definition, the unorganized sector is comprised of: 1) all the
enterprises except units registered under Section 2m(i) and 2m(ii) of the Factories Act,
1948, and Bidi and Cigar Workers(condition of employment) Act, 1966; and 2) all
enterprises except those run by the government (central, state and local bodies) or Public
Sector Enterprises and the deregulation have breathed a new life to private business and
the long-protected industries in India are now faced with both the challenge of foreign
competition as well as the opportunities of world markets. The growth rate has continued
the higher trajectory started in 1980 and the GDP has nearly doubled in constant prices
The end of the “License Raj” has removed major obstacles from the path of new
investment and capacity creation. The effect is clearly visible in ratio of capital
formation in the private sector to that in the public sector for a decade preceding
liberalization and for the period following it.
The unmistakable ascent in the ratio following liberalization points to the unshackled
private sector’s march towards attaining the “commanding heights” of the economy. In
terms of price stability, the average rate of inflation since liberalization has stayed close
to the preceding half decade except in the last few years when inflation has declined to
significantly lower levels. Perhaps the biggest structural change in India’s macro-
economy, apart from the rise in the growth rate, is the steep decline in the interest rates.
interest rates have fallen to almost half in the period following the reforms, bringing
down the corporate cost of capital significantly and increasing the competitiveness of
Indian companies in the global marketplace.
The Financial Sector
Despite the history of India’s stock exchanges (4 at independence to 23 today)
and the large number of listed firms (over 10,000), the size and role in terms of
allocating
resources of the markets are dominated by those of the banking sector, similar to many
other emerging economies. The equity markets were not important as a source of
funding
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for the non-state sector until as recently as the early 1980s. The ratio of India’s market
capitalization to GDP rose from about 3.5% in the early 1980’s to over 59 % in 2005,
which ranks 40th among 106 countries while the size of the (private) corporate
bond market is small. On the other hand, total bank deposits (of over
$527 billion dollars) are equivalent to 52 % of GDP in 2005, and constitute three-
quarters
of the country’s total financial assets. The efficiency of the banking sector, measured by
the concentration and overhead costs, is above the world average.
In a series of seminal papers beginning in the late 1990s, La Porta, Lopez de
Silanes, Shleifer and Vishny (LLSV) have empirically demonstrated the effects that the
investor protection embedded in the legal system of a country has on the development
and nature of financial systems in the country. Broadly speaking, they posit the
common-law countries provide better investor protection than civil law countries leading
to “better” financial and systemic outcomes for the former including a greater fraction of
external finance, better developed financial markets and more dispersed shareholding in
these countries as compared to the civil law countries. Consequently, the LLSV averages
of financial system indicators across different legal system groups serve as a benchmark
against which an individual country’s financial system can be compared.
India’s banking sector is much smaller than the (value-weighted) average of LLSV
sample countries, even though its efficiency (overhead cost as fraction of total banking
assets) compares favorably to most countries. The size of India’s stock market, measured
by the total market capitalization as fraction of GDP, is actually slightly larger than that
of the banking sector, although this figure is still below the LLSV average. However, in
terms of the “floating supply” of the market, or the tradable fraction of the total market
capitalization, India’s stock market is only half of its banking sector.
“Structure activity” and “Structure size” measure whether a financial system is
dominated by the market or banks. India’s activity (size) figure is below (above) even
the average of English origin countries, suggesting that India has a market-dominated
system; but this is mainly due to the small amount of bank private credit (relative to
GDP) rather than the size of the stock market. In terms of relative efficiency (“Structure
efficiency”) of the market vs. banks, India’s banks are much more efficient than the
17

market (due to the low overhead cost), and this dominance of banks over market is
stronger in India than for the average level of LLSV countries. Finally, in terms of the
development of the financial system, including both banks and markets, we find that
India’s overall financial market size (“Finance activity” and “Finance size”) is much
smaller than the LLSV-sample average level. Overall, based on the above evidence, we
can conclude that both India’s stock market and banking sector are small relative to the
size of its economy, and the financial system is dominated by an efficient (low overhead
cost) but significantly under-utilized (in terms of lending to non-state sectors) banking
sector.
However, the situation has changed considerably in recent years: Since the middle
of 2003 through to the third quarter of 2007, Indian stock prices have appreciated
rapidly.
In fact, as shown in Figure 1, the rise of the Indian equity market in this period allowed
investors to earn a higher return (“buy and hold return”) from investing in the Bombay
Stock Exchange, or BSE’s SENSEX Index than from investing in the S&P 500 Index
and
other indices in the U.K., and Japan during the period. Only China did better. Many
credit the continuing reforms and more or less steady growth as well as increasing
foreign
direct and portfolio investment in the country for this explosion in share values.4
it compares the two major Indian exchanges, the Bombay Stock Exchange
(BSE), and the much more recent, National Stock Exchange, (NSE)) vis-à-vis other
major exchanges in the world. At the end of 2005, BSE was the sixteenth largest stock
market in the world in terms of market capitalization, while NSE ranked eighteenth.
It also shows that trading in the BSE is one of the most concentrated among the
largest exchanges in the world, with the top 5% of companies (in terms of market
capitalization) accounting for over 72% of all trades, but the (share) turnover velocity of
BSE (35.4% for the year) is much lower than that of exchanges with similar
concentration ratios.5 Figure 1.9 shows that Indian markets outperformed most major
global markets handsomely during 1992-2006 period.
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In 2004-05, non-government Indian companies raised $2.7 billion from the market
through the issuance of common stocks, and $378 million by selling bonds/debentures
(no preferred shares). Despite the size of new issues, India’s financial markets, relative
to the size of its economy and population, are much smaller than those in many other
countries. It presents a comparison of external markets (stock and bonds) in India and
different country groups (by legal origin) using measures from LLSV (1997a). The
horizontal axis measures overall investor protection (protection provided by the law,
rule of law, and government corruption) in each country, while the vertical axis
measures the (relative) size and efficiency of that country’s external markets.6 Most
countries with the English common-law origin (French civil-law origin) lie in the top-
right region (bottom-left region) of the graph. India is located in the south-eastern region
of the graph with relatively strong legal protection (in particular, protection provided by
law) but relatively small financial markets.
The Financial Sector
Along with the rest of the economy and perhaps even more than the rest, financial
markets in India have witnessed a fundamental transformation in the years since
liberalization. The going has not been smooth all along but the overall effects have been
largely positive.
Over the decades, India’s banking sector has grown steadily in size (in terms of
total deposits) at an average annual growth rate of 18%. There are about 100 commercial
banks in operation with 30 of them state owned, 30 private sector banks and the rest 40
foreign banks. Still dominated by state-owned banks (they account for over 80% of
deposits and assets), the years since liberalization have seen the emergence of new
private sector banks as well as the entry of several new foreign banks. This has resulted
in a much lower concentration ratio in India than in other emerging economies
(Demirgüç-Kunt and Levine 2001). Competition has clearly increased with the
Herfindahl index (a measure of concentration) for advances and assets dropping by over
28% and about 20% respectively between 1991-1992 and 2000-2001 (Koeva 2003).
Within a decade of its formation, a private bank, the ICICI Bank has become the second
19

largest in India.
Compared to most Asian countries the Indian banking system has done better in
managing its NPL problem. The “healthy” status of the Indian banking system is in part
due to its high standards in selecting borrowers (in fact, many firms complained about
the
stringent standards and lack of sufficient funding), though there is some concern about
“ever-greening” of loans to avoid being categorized as NPLs. In terms of profitability,
Indian banks have also performed well compared to the banking sector in other Asian
economies, as the returns to bank assets and equity.
Private banks are today increasingly displacing nationalized banks from their
positions of pre-eminence. Though the nationalized State Bank of India (SBI) remains
the
largest bank in the country by far, new private banks like ICICI Bank, UTI Bank
(recently renamed Axis Bank) and HDFC Bank have emerged as important players in
the
retail banking sector. Though spawned by government-backed financial institutions in
each case, they are profit-driven professional enterprises.
The proportion of non-performing assets (NPAs) in the loan portfolios of the
banks is one of the best indicators of the health of the banking sector, which, in turn, is
central to the economic health of the nation the distribution of NPAs
in the different segments of the Indian banking sector for the last few years. Clearly the
foreign banks have the healthiest portfolios and the nationalized banks the worst, but the
downward trend across the board is indeed a positive feature. Also, while there is still
room for improvement, the overall ratios are far from alarming particularly when
compared to some other Asian countries.
While the banking sector has undergone several changes, equity markets have
experienced tumultuous times as well. There is no doubt that the post-reforms era has
witnessed considerably higher average stock market returns in general as compared to
before.
.Since the beginning of the reforms, “equity culture” has spread across the country
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to an extent more than ever before. This trend is clearly visible which shows the ratio of
BSE market capitalization to the GDP. Although GDP itself has risen faster than before,
the long-term growth in equity markets has been significantly higher.
The rise in stock prices (and the associated drop in cost of equity) has been
accompanied by a boom in the amounts raised through new issues – both stocks as well
as debentures – beginning with the reforms and continuing at a high level for over half a
decade
The ride has not been smooth all along though. At least two major bubbles have
rocked the Indian stock markets since liberalization. The first, coinciding with the initial
reforms, raised questions about the reliability of the equity market institutions. A joint
parliamentary committee investigation and major media attention notwithstanding
another crisis hit the bourses in 1998 and yet again in 2001. Clearly several institutional
problems have played an important role in these recurring crises and they are being fixed
in a reactive rather than pro-active manner. Appropriate monitoring of the bourses
remains a thorny issue and foul play, a feature that is far from absent even in developed
countries, is, unfortunately, still common in India. Consequently, every steep rise in
stock
values today instills foreboding in some minds about a possible reversal. Nevertheless,
institutions have doubtless improved and become more transparent over the period. The
time-honored “badla” system of rolling settlements is now gone and derivatives have
firmly established themselves on the Indian scene.
Indeed the introduction and rapid growth of equity derivatives have been one of
the defining changes in the Indian financial sector since liberalization. Notwithstanding
considerable resistance from traditional brokers in Indian exchanges, futures and options
trading began in India at the turn of the centuries. The rapid growth in
the turnover in the NSE derivatives market broken down into different instrument-types.
Evidently futures – both on individual stocks as well as index futures – have been more
popular than options, but the overall growth in less than half a decade has been
phenomenal indeed. Tradable interest rate futures have made their appearance as well
but
their trading volume has been negligible and sporadic. Nevertheless, the fixed-income
21

derivatives section has witnessed considerable growth as well with Interest Rate Swaps
and Forward Rate Agreements being frequently used in inter-bank transactions as well
as
for hedging of corporate risks. Similarly currency swaps, forward contracts and currency
options are being increasingly used by Indian companies to hedge currency risk.
Finally the market for corporate control has seen a surge of activity in India in recent
years. The evolution of mergers and acquisitions involving Foreign private equity has
been a major player in this area with inflows of over $2.2 billion in 2006, the largest in
any Asian country.
Hence the Financial sector development in developing
countries and emerging markets is part of the private sector development strategy to
stimulate economic growth and reduce poverty .A solid and well-functioning financial
sector is a powerful engine behind economic growth. It generates local savings, which in
turn lead to productive investments in local business. Furthermore, effective banks can
channel international streams of private remittances. The financial sector therefore
provides the rudiments for income-growth and job creation.
Development of financial sector in India:-
The Financial Sector Development Project aims to foster greater market orientation,
allocative efficiency, technical competence and competition in India's financial system
and contribute to meeting the long-term financing needs of its investors as a means of
stimulating economic growth. It will assist the Government of India to sustain financial
liberalization, institutional development of public sector commercial banks and
integration into the global capital markets. It will facilitate expansion of private equity
ownership in public sector commercial banks and development of term foreign currency
lending. The project comprises the following three components:
1) capital restructuring to support selected nationalized commercial banks which commit
to plans for increasing private equity through public offerings and modernization
initiatives, this support will be through subordinated loans from the government to
22

strengthen their capital base as required by capital adequacy norms.
2) The project will support a modernization and institutional development program
fostering action in strategic planning, automation and computerization of payment and
accounting functions, human resource development, organizational improvements, and
enhanced capability in the areas of asset-liability credit and treasury management.
3) The backstop facility component will assist eligible Indian banks and financial
institutions in India to source private funds to meet rapidly expanding demand for foreign
currency term loans. It will assist in meeting such demand from small- and medium-sized
companies with foreign exchange earnings and exporters whose direct access to offshore
markets is hampered by high issue cost, the facility will provide a medium-term liquidity
assurance at a market-related price to financial institutions by offering them the option to
borrow funds from the facility at a market-related price representing a market perception
of systemic disruption.
GROWTH AND PRESENT STATUS OF THE INDUSTRY :-
The growth of financial sector in India at present is nearly 8.5% per year. The rise in
the growth rate suggests the growth of the economy. The financial policies and the
monetary policies are able to sustain a stable growth rate.
The reforms pertaining to the monetary policies and the macro economic policies over
the last few years has influenced the Indian economy to the core. The major step towards
opening up of the financial market further was the nullification of the regulations
restricting the growth of the financial sector in India. To maintain such a growth for a
long term the inflation has to come down further.
The financial sector in India had an overall growth of 15%, which has exhibited stability
over the last few years although several other markets across the Asian region were
going through a turmoil. The development of the system pertaining to the financial
23

sector was the key to the growth of the same. With the opening of the financial market
variety of products and services were introduced to suit the need of the customer. The
Reserve Bank of India (RBI) played a dynamic role in the growth of the financial sector of India.
The growth of financial sector in India was due to the development in sectors
Growth of the banking sector in India
The banking system in India is the most extensive. The total asset value of the entire
banking sector in India is nearly US$ 270 billion. The total deposits is nearly US$ 220
billion. Banking sector in India has been transformed completely. Presently the latest
inclusions such as Internet banking and Core banking have made banking operations
more user friendly and easy
.
Growth of the Capital Market in India
 The ratio of the transaction was increased with the share ratio and deposit system
 The removal of the pliable but ill-used forward trading mechanism
 The introduction of infotech systems in the National Stock Exchange (NSE) in
order to cater to the various investors in different locations
 Privatization of stock exchanges
Growth in the Insurance sector in India
With the opening of the market, foreign and private Indian players are keen to convert
untapped market potential into opportunities by providing tailor-made products.
The insurance market is filled up with new players which has led to the introduction
of several innovative insurance based products, value add-ons, and services. Many
24

foreign companies have also entered the arena such as Tokyo Marine, Aviva, Allianz,
Lombard General, AMP, New York Life, Standard Life, AIG, and Sun Life.
The competition among the companies has led to aggressive marketing, and
distribution techniques.
The active part of the Insurance Regulatory and Development Authority (IRDA) as a
regulatory body has provided to the development of the sector.
Growth of the Venture Capital market in India
• The venture capital sector in India is one of the most active in the financial
sector inspite of the hindrances by the external set up.
• Presently in India there are around 34 national and 2 international SEBI
registered venture capital funds.
FUTURE OF FINANCE SECTOR:-
The financial sector has witnessed changes in many respects. Banking has seen many
changes in the last two decades, as has the mutual fund business. During the first three
decades after independence, the financial sector and changes in it were largely
dominated by SBI, IDBI, IFCI, UTI, ICICI, and LIC but the last two decades saw a
significant contribution by many other players, smaller in size, but faster on their feet.
Each one of these large players was created with very specific mandates, but with sector-
wide responsibilities. For example formation of SBI was the result of the Rural Credit
Survey Committee recommendation to create an entity that among other things, would
help the government in stimulating banking in the entire country. Similarly, the UTI was
created in 1964 with the explicit objective of stimulating investment in the stock market.
In other words, these organizations were created with specific purposes and a vision for
the future. They have significantly served the purposes that drove them all these years,
25

and delivered on the agenda set for them. The present day financial sector has been built
on the achievements of these organizations. However, in the last few years, we see
organisations like SBI and UTI endeavoring to compete with every player in the market.
As a consequence, these organisations are trying to become everything to everybody.
The negative image associated with a public enterprise has only added to their attempt to
emulate private enterprise behavior. Survival has become the objective of these pioneers.
In sum, these organisations are fast losing their initial identity without gaining a new
one! These organisations are trying to respond by tinkering with their organisation
design or by changing the ownership pattern. Such interventions are likely to be
inappropriate given the status of these organisations. A comprehensive relook at the
existence of these organisations is an imperative. They will have to introspect on their
relevance in the present context. For example, SBI will have to contemplate on the role it
can play in the market given the state of the market today and a desirable state in the
future. Similarly, UTI may have to examine its role in the mutual fund sector.
Organisations, which have played defining roles in economies, have often found
themselves at such crossroads because they reach there first. The genius of the
organisation is in identifying the moment as such and in reinventing itself to play a
similar pivotal role again although in a different context. AT&T was one such
organisation, which during the early seventies went through an elaborate exercise of
reinventing itself for the future state of communications business that it envisioned. The
task was not just about being prepared for the future but about preparing to shape the
future of the industry. The major players of the financial markets in India will have to do
something similar; they need to envision the desirable future state of the market and
define their role in shaping the future. This would mean playing a pioneering role once
again in a new context; any other role would probably be insignificant for these
organisations. The finance ministry as the de facto owner of these organisations needs to
encourage their managements to undertake this critical task immediately.
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PROFILE OF THE ORGANISATION :-
ORIGIN OF ICICI GROUP :-
1955:
The Industrial Credit and Investment Corporation of India Limited (ICICI) incorporated
at the initiative of the World Bank, the Government of India and representatives of
Indian industry, with the objective of creating a development financial institution for
providing medium-term and long-term project financing to Indian businesses.
Mr.A.Ramaswami Mudaliar elected as the first Chairman of ICICI Limited.
ICICI emerges as the major source of foreign currency loans to Indian industry. Besides
funding from the World Bank and other multi-lateral agencies, ICICI was also among
the first Indian companies to raise funds from international markets.
1967 - ICICI made its first debenture issue for Rs.6 crore, which was oversubscribed.
1977 - ICICI sponsors the formation of Housing Development Finance Corporation.
& Managed its first equity public issue.
1986 - First Indian Institution to receive ADB Loans
- The first public issue by any Indian equity in the Swiss Capital Market.
(75 million Swiss Franc)
- Along with UTI sets up Credit Rating Information Services of India Limited.
1994- ICICI sets up ICICI Bank.
1997 - The name "The Industrial Credit and Investment Corporation of India
Limited " was changed to "ICICI Limited".
2001- ICICI Ltd and ICICI Bank were Merged.
2002 – Merger of ICICI Limited, ICICI Capital Services Ltd and ICICI Personal
Financial Services Limited with ICICI Bank.– “A Reverse Merger”.
ICICI India’s Largest Pvt. Sector Bank.
 International Presence in UK, Canada, Eurasia etc.
 Assets Worth Rs. 34,46,581.1 million – 2007.
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 889.78 Million Equity Share – Issued & Subscribed.
 Providing Services Like
Retail Banking
Corporate Banking
Structured Finance
ICICI Group offers a wide range of banking products and financial services to corporate
and retail customers through a variety of delivery channels and through its specialised
group companies, subsidiaries and affiliates in the areas of personal banking, investment
banking, life and general insurance, venture capital and asset management. With a strong
customer focus, the ICICI Group Companies have maintained and enhanced their
leadership position in their respective sectors.
ICICI Bank is India's second-largest bank with total assets of Rs. 3,793.01 billion (US$
75 billion) at March 31, 2009 and profit after tax Rs. 37.58 billion for the year ended
March 31, 2009. The Bank has a network of 1,451 branches and about 4,721 ATMs in
India and presence in 18 countries.
ICICI Prudential Life Insurance Company is a 74:26 joint venture with Prudential plc
(UK). It is the largest private sector life insurance company offering a comprehensive
suite of life, health and pensions products. It is also the pioneer in launching innovative
health care products like Diabetes Care Active and health Saver.The company operates
on a multi-channel platform and has a distribution strength of over 2,76,000 financial
advisors operating from more than 2000 branches spread across 1800 locations across
the country. In addition to the agency force, it also has tie-ups with various banks,
corporate agents and brokers. In fiscal 2009, ICICI Prudential attained a market share of
10.9% based on retail weighted premium and garnered a total premium of Rs 153.56
billion registering a growth of 13% and held assets of Rs. 327.88 billion as on March 31,
2009.
ICICI Lombard General Insurance Company, a joint venture with the Canada based
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Fairfax Financial Holdings, is the largest private sector general insurance company. It
has a comprehensive product portfolio catering to all corporate and retail insurance
needs and is present in over 300 locations across the country. ICICI Lombard General
Insurance has achieved a market share of 27.2% among private sector general insurance
companies and an overall market share of 11.2% during fiscal 2009. The gross return
premium grew by 2.2% from Rs. 33.45 billion in fiscal 2008 to 34.20 billion in fiscal
2009.
ICICI Securities Ltd 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 retail and corporate customers. ICICI
Securities (I-Sec) 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.
ICICI Securities Primary Dealership Limited is the largest Primary Dealer in
Government Securities. It is an acknowledged leader in the Indian fixed income and
money markets, with a strong franchise across the spectrum of interest rate products and
services - institutional sales and trading, resource mobilization, portfolio management
services and research. One of the first entities to be granted Primary Dealership license
by RBI, I-Sec PD has made pioneering contributions since inception to debt market
development in India. I-Sec PD is also credited with pioneering debt market research in
India. I-Sec PD has been recognized as the 'Best Domestic Bond House in India' by Asia
money every year from 2002 to 2007 and selected as 'Best Bond House' by
Financeasia.com for the years - 2001, 2004 to 2007 and 2009."
ICICI Prudential Asset Management is the third largest mutual fund with average asset
under management of Rs. 514.33 billion and a market share of 10.43% as on March 31,
2009. The Company manages a comprehensive range of mutual fund schemes and
portfolio management services to meet the varying investment needs of its investors
through162 branches and 185 CAMS official point of transaction acceptance spread
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across the country.
ICICI Venture is one of the largest and most successful private equity firms in India with
funds under management in excess of USD 2 billion. ICICI Venture, over the years has
built an enviable portfolio of companies across sectors including Life Sciences,
Information Technology, Media, Manufacturing, Retail, Financial Services, and Real
Estate thereby building sustainable value. It has several “firsts” to its credit in the Indian
Private Equity industry. Amongst them are India’s first leveraged buyout (Infomedia),
the first real estate investment (Cyber Gateway), the first mezzanine financing for a
acquisition (Arch Pharmalabs), the first ‘royalty-based’ structured deal in Pharma
Research & Development (Dr Reddy’s Laboratories - JV) and the first fund level
secondary transaction (Collar Capital)
ORIGIN OF ICICI DIRECT :-
Even as the European and American stock markets reckon with the changes brought
about by the Internet and IT/telecom advances, the Indian stock market has quickly
moved to global standards.
The sheer breadth of the changes since the National Stock Exchange started
operations in 1994 and with the Securities and Exchange Board of India (SEBI) also
driving the changes in the market system, have enabled the Indian market to move well
ahead in just five years.
Even as online automated trading and better clearing and settlement
mechanisms have been put in place, perhaps, the most significant change in the Indian
market has been the coming of paperless trading; it may well be a precursor to the next
big changes – rolling settlements and Internet trading. But the push towards paperless
trading stands out even in a decade when the market landscape has changed beyond
recognition.
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Dematerialization (holding and trading securities in paperless mode) was
an alien concept in India before 1995; in five years, large quantities of paper have been
flushed out of the system. Since the entry of the foreign institutional investors (FIIs) and
online trading, the old system, laden with paperwork at every conceivable stage, was out
of place in an otherwise fast trading environment.
As the FIIs complained about the paperwork as a major
constraining factor, the government and SEBI took notice. The requisite legislative
changes were put in place quickly - the Depositories Act, 1996 was passed and the NSE,
with the UTI and the IDBI, set up the National Securities Depository Ltd (NSDL).
But the depository concept did not gain popularity; the FIIs
which had clamored for its introduction, now ignored it. The reason: Lack of liquidity.
But, unless the institutional investors stepped in, there could be no liquidity. This
stalemate frustrated the push for a paperless environment.
Until SEBI stepped in, that is.
With regulatory pushes SEBI, in phases, made demat trading in stocks
mandatory for institutions first and, then, for all investors. Mandatory paperless trading,
forced the FIIs to dematerialize their holdings quickly.
As a consequence of SEBI's action, most major stocks are traded in
the paperless mode now. The second phase will involve some 200 stocks in a few
months time. The effect of SEBI's action is evident from NSDL's statistics. A total of
698 companies, with a market capitalization of Rs. 7,37,300 crores (almost 80 per cent
of the market capitalization of all listed stocks), is enrolled with the NSDL.
With 13.65 billion shares in the demat mode, nearly 19 million
investor accounts, and securities valued at Rs. 3,96,800 crores ($91 billions) actually
dematerialized, the concept of dematerialization can be said to have taken roots. If the
regulatory direction is any indication, more paper will be flushed out of the system in the
next two years.
The costs of dematerialization have declined as the NSDL slashed
charges as volumes expanded and the competition _ from the Central Depository
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Services Ltd (CSDL) floated by the BSE _ started in 1999 second half. A series of
measures by SEBI and NSDL also helped ease the strain faced by retail investors.
From a long-term perspective, demat in India is of considerable
significance. Not only has the general trading environment improved and quickened,
volumes too have perked up, even in the demat segment. With demat taking off, there is
now scope for an improvement in the quality of investor services.
As a consequence of dematerialization, the Indian market is
also well prepared for web-based trading though the quality of telecom infrastructure
and inadequacies in the banking system-stock exchange linkages may cause delays.
Notably, with regard to the thrust towards paperless trading, the Indian market managed
in three years what took even the US much longer.
With a high degree of dematerialization a reality, the stage is set for rolling settlements
and web-based trading. Once these are in place, the Indian market will have moved
closer to the standards in advanced markets, such as the US. And paperless trading may
well be the catalyst for such a rapid advancement.
This is the concluding week of Business Line's 20-week series
Markets – a Century in Retrospect, which featured the most significant market- and
corporate-related events. Other, equally significant, specific topics of a micro-nature will
be published through the year.
The dematerialized form of shareholding and the depository
mode of trade (scrip less trade) have been in operation in developed financial markets for
over 15 years. In India, the first depository commenced operation a decade back and is
relatively new. The Indian financial market is in need of both scrip-based and scrip less
trade, but the investing community, which is used scrip-based trade, is bound to take
some time to accept the latter. The scrip less trading, till now a domain of the western
world, institutional investors and GDR holders is now mandatory even for small
investors. All those who hold physical share certificates have to get them dematerialized.
If they do not, they will be forced to do so at the time of sale.
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The countless numbers of conservative Indians have to
digest it, whether they like it or not. First, the institutional investors succumbed. Then
the high net worth individuals, trading in more than a certain numbers of shares, were
forced to give in. now, it is the turn of the small investors of select-companies.
With their share certificates being replaced by small slips and
receipts, naturally the average investors will have their share of fears and apprehensions.
It is necessary to educate and convince these investors about the benefit of Demat rather
than forcing them to take part in the game.
GROWTH AND DEVELOPMENT OF THE ORGANISATION :-
ICICI Consolidating gains
It is a surprise to everyone if the newspapers or the late night editions of the TV
news do not carry anything about the ICICI. One of India's biggest financial
institution is always in the limelight. The growth of the ICICI over the years has
proved repeatedly the ability of the institution in adopting new technologies and
products. It is through its ability to nourish new products and services that the
institution has become a household name in a very short span of time.
This time again the FI is in the news in a big way. Previously, the institution has
been in the limelight for controlling the market turbulence or expansion into new
markets. However, the reason this time is totally different from the earlier ones.
After a constant expansion of the number of subsidiaries in the last five years, the
leading financial institution has announced its plans of restructuring. Things are
moving fast at the Bandra-Kurla complex of ICICI. Also, after substantially
diluting its stake in the ICICI Bank, the group is also planning for a reverse
merger.
Exponential growth
The Industrial Credit and Investment Corporation of India limited founded way
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back in 1955, has witnessed more than it could have dreamed of at the time of its
inception. However, following the economic liberalization of Indian economy, it
has renamed itself as ICICI. The principal objective behind setting up this
organization at that time was to make available long-term capital for industrial
development and investment in India. Gopalan Ramachandran, Chief executive,
Business Economics and Risk Management says, "Considering the fact that it was
established at a time when India had a stock market but not a reliable capital
market to supply long-term debt and equity, the growth of ICICI is wonderful."
Not only did the institution withstand the test of time but also witnessed
exponential growth that anybody can ever imagine. Under its group umbrella,
ICICI has around 27 subsidiaries. Of course, the most prominent and most
successful among them is the ICICI bank. One observer puts the constant increase
in the number of subsidiaries as part of their decentralization strategy.
The major reason for the exponential growth of ICICI is due to its willingness to
adapt itself to changes. It is the first one to start Internet banking. Also it has been
the first ever institution to start a web based securities trading through its
subsidiary ICICI Web Trade Ltd. Says Gopalan Ramachandran, "ICICI is a
financial institution that has seldom resisted change. It has been an ardent
promoter of internal and external change." Truly, it has been the best in the
business to adopt to the changes in the environment. And what more can it ask for
from its employees who were most willing to adopt new things. And all this is due
to the comfort provided by the subsidiaries identifies an industry observer.
Not only it witnessed increase in the number of subsidiaries during the last few
years, it has also witnessed one of the best years in existence in terms of rise in its
total assets. At the end of the financial year 2000, its assets stood at Rs. 706 bn. In
the process, it has become the second largest financial institution in India. Also,
today the group manages around 7.4 mn customer accounts. It includes three mn
customers' accounts of the ICICI bank. The well-diversified portfolio of the
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company will tell the story of its success. Out of the total portfolio, corporate
finance accounts for 37 percent while the structured project finance accounts for
23 percent. Slowly it is also gaining momentum in the retail loans segment,
though at present it represents only 2 percent of the total portfolio.
It is no doubt that ICICI has now become India's best-managed financial
institution catering to the needs of different customers. The key to success has
been the constant endeavor to implement new technologies and products.
According to Anurag Khanna, Founder and CEO of BanknetIndia.com, "The
company is making constant efforts to exploit first mover advantage in the
technology-related businesses." The principal achievements of ICICI according to
Gopalan Ramachandran, are, "It has been able to reduce drastically the percentage
of problem loans and the surge in the size of its balance sheet. Also, it has rapidly
assimilated the technology and had developed institutional and managerial
process aimed at managing risk." The result is the rapid increase in the
shareholder value compared to others in the industry.
SOME MAJOR HIGHLIGHTS OF THIS GROWTH ARE:-
1."As ICICI has transformed its business from a development financial institution
to a diversified financial service group offering a wide variety of products and
services it required various subsidiaries to handle particular activities." Justifying
the reason behind the floating of the subsidiaries and their contribution to the
overall success he adds, "These subsidiaries helped in focusing on their specific
areas of operation and facilitated attention to their specific customer segments and
activities."
2. Subsidiaries enable special managerial talent to deploy cutting-edge
technologies. The internalisation of risk and reward in subsidiaries is a potent
impetus for the growth of the ICICI group
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3. . "ICICI has empowered managers to try new techniques, technologies and
process and above all, to establish new beachheads for exploitation in the future,"
4. , "The retail subsidiaries have hitherto focused on their specific areas of
operation in order to facilitate rapid time to market and dedicate attention to their
customer segments and channels."
PRESENT STATUS OF ICICI DIRECT:-
More than 1,30,000 persons, including NRIs in the Gulf, who trade in shares listed on the
NSE, are registered with the site, which is India’s largest and worlds tenth share-trading
portal. The site was launched last April by ICICI Web Trade Ltd, a fully-owned subsidiary
of ICICI. Around 15,000 people trade via ICICIdirect.com every day. The unique three-in-
one trading account of the site offers a hassle-free and seamless trading experience for the
customer. The customers bank, demat and broking accounts are linked automatically. All
that the customer needs to do is to just place the order of the chosen scrip and the desired
price - our system does the rest of the work.
Under the Spot facility, ICICI direct customers are given a daily limit of Rs 50,000. These
funds can be withdrawn at the end of the day and customers would not have to wait until the
payout day of the stock exchange to receive their funds for sales. This would increase the
liquidity for the customers and all S&P CNX Nifty and CNX Nifty Junior scrip’s would be
available on Spot.
Despite the existence of so many online share trading portals how could ICICI direct capture
65 per cent of the market share and emerge a front-runner. Another reason for the immense
popularity of the site is due to ICICIs countrywide network, which comprises 110 branches,
93 centre’s and 589 ATMs.
➢ Direct Business Catalyst (DBC):
A Direct Business Catalyst (DBC) is an entity which gets new clients for
ICICI Direct and nurtures them by offering them the trade facility on phone. For all its
effort it gets a fixed referral fee and trail commission.
○ Role
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Acting as a facilitator between ICICI Direct and the end customer, he introduces a client
to ICICI Direct, get his I-direct account opened and subsequently on the request of the
client he places orders for him on his behalf in clients account.
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FUNCTIONAL DEPARTMENTS OF ICICI :-
Infrastructure financing, corporate financing and retail have been the strong pillars of
ICICI's growth. They expect these to remain thrust areas in the future too. The financial
institution sees significant opportunities in the power sector, and in the rapid de-
regulation of the Telecom sector. On the retail side, ICICI has established a retail
franchisee through a physical presence across 42 cities. Its retail thrust has been on the
planks of technology enabled low cost distribution channels like the Internet, Call
centers and ATMs.
It occupies the number one position in automobile financing (over 20% of the market
share), number one in credit cards on an incremental basis. It also has a growing
presence in home finance and on-line trading.
ICICI BANK
ICICI Bank is a commercial banking outfit set up by the ICICI Group. The Bank was
registered a banking company on January 5th
, 1994 and received its banking license from
the Reserve Bank of India on May 17th
, 1994. The Bank has an authorized capital of INR
300crore (USD 75.96 million), of which subscribed and paid-up capital is INR 165 crore
(USD 41.78 million). The first ICICI Bank branch was started in Madras in June 1994.
The branches are fully computerized with state-of-the-art technology and systems. All of
them are fully networked through V-SAT (Satellite) technology. The Bank is connected
to the international SWIFT network since March 1995. ICICI Bank offers a wide
spectrum of domestic and international banking services to facilitate trade, investment,
cross-border business, and treasury and foreign exchange services. This is in addition to
a whole range of deposit services offered to individuals and corporate bodies. ICICI
Bank’s Infinity was the first Internet banking service in the country, and a prelude to
banking in the next millennium. Currently the Bank has around 150,000 customers
ICICI VENTURE FUNDS MANAGEMENT COMPANY LIMITED
With the recent spurt in entrepreneurship in the country, venture capital and private
equity capital financing are fast attaining a role of prominence. Uniquely positioned to
38

take the Indian entrepreneur further is ICICI Venture Funds, the wholly owned
subsidiary of ICICI, with its keen understanding of the Indian Financial Markets,
entrepreneurial ethos, access to global capital and a network through influential global
alliances. Strong parentage and affiliates provide ICICI Venture with access to a broad
spectrum of financial and analytical resources. An affiliation with (Trust Company of the
West) provides a platform for networking Indian Companies to global markets and
technology. ICICI Venture Funds currently manages / advises 11 Funds aggregating
US$ 400 million, making it the most significant private equity investor in the country.
The investment experience of ICICI Venture’s professionals is the foundation its
strengths and success in several areas of investing. ICICI Venture seeks to invest in
opportunities where its network through ICICI and TCW can create value for all
involved. ICICI Venture’s primary investment objective is capital investment through
investments by way of equity or equity-related securities in unlisted companies with
significant growth potential. ICICI Venture’s investments span a broad spectrum of
industries and stages of development, the investment focus being on
• Information Technology
• Biotechnology and Life Sciences
• Media and entertainment
• Retail Services
ICICI SECURITIES AND FINANCE COMPANY LIMITED
Formed in 1993 when ICICI’s Merchant Banking Division was spun off into a new
company, I-SEC today are India’s leading Investment Bank and one of the most
significant players in the Indian capital markets. Its client list includes some of the best
known, most respected names in Indian business and industry, and I-SEC offers them
what are probably the widest, most in-depth range of services in the market, with the
highest standards of professionalism. Backed by a strong distribution network, I-SEC is
acknowledged to be at the forefront of all new developments in the Indian debt market.
I-SEC Research Reports, Compendia, Updates, I-BEX and sovereign Bond Index, have
become industry standards, sought after by finance, business and reputed publications
alike. The Project Finance Group has helped take strategic projects from the drawing
board to financial closure, leveraging the expertise of parent organization. I-SEC has
39

also executed several assignments in M & A, including business valuations, spin-offs
and mergers, for both domestic and overseas clients. The range of products offered by
i-SEC includes:
Corporate Finance – Mergers and Acquisitions, Equity, Bidding (especially for Telecom
Projects)
Fixed Income – Primary Dealership, Debt Research
Equities – Lend management, Underwriting, Syndication, Private Equity placement,
Sales, Trading, Broking, Sectoral and Company Research I - SEC
Continues to sustain a steady rate of growth by offering the most extensive range of
services combined with unrivalled standards of professionalism.
ICICI BROKERAGE SERVICES LIMITED
Set up in March 1995, ICICI Brokerage Services is a 100% subsidiary of I-SEC. It
commenced its securities brokerage activities in February 1996 and is registered with
the National Stock Exchange of India Limited and The Stock Exchange, Mumbai. We
are a joint venture between ICICI and the leading financial services provider in India,
and prudential plc of U.K., one of the finest Life insurance companies in the world.
Together we provide you with an extensive range of insurance products to suit your
various needs at various life stages. We aim to keep you covered, at every step in life.
Their policies are need-specific and address particular age groups. This means that no
matter where in life you are, we offer specific products to suit your needs for savings,
protection and retirement. Our products can be categorized into the following:
• Saving plans
• Protection plans
• Retirement plans
ICICI PERSONAL FINANCIAL SERVICES LIMITED
ICICI Personal Financial Services Limited (ICICI PFS), formerly ICICI-Credit, was one
of the first four companies to obtain registration as a Non-Banking Financial Company
(NBFC) from the Reserve Bank of India (RBI) on September 10, 1997 under the new
section 45IA of the Reserve Bank of India Act, 1934. During the year 1998-99, there
was a significant shift in the Company’s operation from leasing to hire purchase to
40

distribution and servicing of all rental products for the ICICI Group. It is now a focal point
for marketing and distribution of all rental asset products for ICICI, including auto loans,
consumer durable finance and other financial products. The Company has thus become
part of ICICI’s retail strategy aimed at offering a comprehensive range of products and
services to retail customers. In view of this reorientation of the business, the name of
the Company was changed from ICICI Credit Corporation to ICICI Personal Financial
Services Limited (ICICI PFS) effective March 22, 1999.
ICICI CAPITAL SERVICES LIMITED
ICICI Capital Services Ltd. was incorporated in the name of SCICI Securities Ltd. on
September 24, 1994 as a wholly owned subsidiary of erstwhile SCICI Ltd. with the
objective of providing stock broking services to the institutional clients and undertaking
activities such as underwriting, primary market placements & distribution industry &
company research etc. After the amalgamation of SCICI with ICICI effective from April
1, 1996, resulting in the change of the name. The company is mandated, under review
by ICICI, to carry out on its behalf the retail resource raising activities and to provide
front office services related to all retail and semi retail liability products of ICICI. The
company also operates the network of ICICI Centers being set up by ICICI. As on date
the company has set up 91 centers across the country.
ICICI INFOTECH
ICICI InfoTech is a leading provider of end-to-end IT solutions. We have an in-depth
experience of having worked on varied technologies with leading corporations
worldwide. Our service portfolio includes the following:
 IS & IT Consulting
 Software Design and Development
 Enterprise Application Integration
 Value Chain Management Solutions (SCM, CRM etc.)
 Application Re-engineering and Management
 Knowledge Management Solutions
 Embedded System Applications
 Technology Incubation, IT-enabled Services & IT Outsourcing
ICICI Capital Ltd.
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Its products are
 RBI Bonds
 E-invest (ICICI Direct.com)
 Fixed Deposits
 Mutual Funds
 Bonds
 De-mat
 Equity IPO
ICICI DIRECT.COM (ONLINE SHARE TRADING):
ICICI Direct.com is a truly online share-trading site. Which means that from the time
you punch in a buy or sell trade on your computer to the final settlement in your
account, everything happens completely online? The 3-in-1 e-invest account integrates
your brokerage, bank and one or more depository accounts to make sure that you can
do the otherwise cumbersome share trading from the comfort of your home or office, at
absolutely any time of the day or night
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PRODUCT AND SERVICE PROFILE OF THE
ORGANISATION:-Products:-
A product for every need: ICICIdirect.com is the most comprehensive website,
which allows you to invest in Shares, Mutual funds, Derivatives(Futures and Options)
and other financial products. Simply put we offer you a product for every investment
need of yours.
○ Trading in shares:
ICICIdirect.com offers you various options while trading in shares.
 Cash Trading
This is a delivery based trading system, which is generally done with
the intention of taking delivery of shares or monies.
 Margin Trading
You can also do an intra-settlement trading upto 3 to 4 times your available
funds, wherein you take long buy/ short sell positions in stocks with the intention of
squaring off the position within the same day settlement cycle.
 Margin PLUS Trading
Through Margin PLUS you can do an intra-settlement trading up to 25times your
available funds, wherein you take long buy/ short sell positions in stocks with the
intention of squaring off the position within the same day settlement cycle. Margin
PLUS will give a much higher leverage in your account against your limits.
 Spot Trading:
This facility can be used only for selling your demat stocks which are already
existing in your demat account. When you are looking at an immediate liquidity option,
'Cash on Spot' may work the best for you, On selling shares through "cash on spot",
money is credited to your bank a/c the same evening & not on the exchange payout date.
This money can then be withdrawn from any of the ICICI Bank ATMs.
 BTST:
Buy Today Sell Tomorrow (BTST) is a facility that allows you to sell shares even
on 1st and 2nd day after the buy order date, without you having to wait for the receipt of
shares into your demat account.
44

 Call N Trade®:
Call N Trade® allows you to call on a local number in your city &trade on the
telephone through our Customer Service Executives. This facility is currently available
in over 11 major states across India.
 Trading on NSE/BSE:
Through ICICIdirect.com, you can trade on NSE as well as BSE.
 Market Order:
You could trade by placing market orders during market hours that allows you to
trade at the best obtainable price in the market at the time of execution of the order.
 Limit Order:
Allows you to place a buy/sell order at a price defined by you. The execution can
happen at a price more favorable than the price, which is defined by you, limit orders
can be placed by you during holidays & nonmarket hours too.
 DE-MAT:-
The dematerialized form of shareholding and the depository mode of trade (scrip less
trade) have been in operation in developed financial markets for over 15 years. In India,
the first depository commenced operations a decade back and is relatively new. The
Indian Financial Markets is in need of both scrip-based trade, but the investing
community, which is used to scrip-based and scrip less trade, is bound to take some time
to accept the latter. The scrip less trading, till now a domain of the western world,
institutional investors and GDR holders is now mandatory even for small investors. All
those who hold physical share certificates have to get them dematerialized. If they do
not, they will be forced to do so at the time of sale.
A process by which the physical certificates of an investor are taken back
by the company / registrar and actually destroyed and an equivalent number of securities
are credited in the electronic holdings of the investor.
45

Offers services to clients dealing in Government securities through the SGL A/C.
besides holding the securities, ICICI Capital Services Ltd.
 Provides records update based on the transactions made by the clients.
 Collects and credits the benefits and proceeds from sale to the clients’ account;
and
 Supplies periodical reports on the transactions and holding of the clients.
 TRADING:
Next function activates when an investor buys or sells in the market.
Buying:
1. An investor gets order executed and makes payment to the broker.
2.Investor instructs his Depository Participant to expect credit on settlement day. Broker
instructs his DP to debit his Clearing Member account on settlement day.
3.Before settlement day Broker makes payment to clearinghouse through Clearing Bank.
4.On settlement day Clearing house releases shares to broker’s Clearing Member
account which is then transferred to investors account through NSDL (National
Securities Depository Limited). Investor gets credit in his account.
SELLING:
An investor gets order executed.
1.Investor instructs his Depository Participant to debit his account with immediate effect.
2.The shares move from investors account to Brokers Clearing Member account via
NSDL. A Broker clearing member accounts is credited.
3.Before settlement day broker transfers shares from his clearing member account to
Clearinghouse via NSDL. His account is debited.
4.On settlement day Broker receives payment from clearing house which he passes on to
the investor.
 ICICIDirect.com
ICICIDirect.com is a truly online share-trading site. This means that from the time you
punch in a buy or sell trade on your computer to the final settlement in your account,
everything happens completely online. The 3-in-1 e-invest account integrates your
46

brokerage, bank and one or more depository accounts to make sure that you can do the
otherwise cumbersome share trading from the comfort of your home or office, at
absolutely any time of the day…or night.
HOW CAN ONE OPEN AN ACCOUNT IN DEMAT?
First an investor has to approach a DP and fill up an account opening form. The
account opening form must be supported by copies of any one of the approved
documents to serve as proof of identity (POI) and proof of address (POA) as specified by
SEBI. Besides, production of PAN card in original at the time of opening of account has
been made mandatory effective from April 01, 2006.
All applicants should carry original documents for verification by an
authorized official of the depository participant, under his signature.
Further, the investor has to sign an agreement with DP in a depository prescribed
standard format, which details rights and duties of investor and DP. DP should provide
the investor with a copy of the agreement and schedule of charges for their future
reference. The DP will open the account in the system and give an account number,
which is also called BO ID (Beneficiary Owner Identification number).
The DP may revise the charges by giving 30 days notice in advance.
SEBI has rationalised the cost structure for dematerialisation by removing account
opening charges, transaction charges for credit of securities, and custody charges vide
circular dated January 28, 2005.
Further, SEBI has vide circular dated November 09, 2005 advised that
with effect from January 09, 2006, no charges shall be levied by a depository on DP and
consequently, by a DP on a Beneficiary Owner (BO) when a BO transfers all the
securities lying in his account to another branch of the same DP or to another DP of the
same depository or another depository, provided the BO Account/s at transferee DP and
at transferor DP are one and the same, i.e. identical in all respects. In case the BO
Account at transferor DP is a joint account, the BO Account at transferee DP should also
be a joint account in the same sequence of ownership.
47

 MARKET PROFILE OF ICICI DIRECT :-
ICICI direct is started in March, 1995. Anil kaul is the CEO of this company. The sales
turnover of the company is 2602 million. It’s a sister concern company of ICICI limited.
This organization basically deals this organization basically deals with on-line share
trading. Regd. Office of the company is at regd. Office of the company is at Mumbai.
Company has a diversified client base that includes retail customers (including High Net
worth Individuals), mutual funds, foreign institutional investors, financial institutions
and corporate clients. Company’s headquarter is in Mumbai. Its de-mat account holders
are diverse but ICICI direct service is ok but the brokerage charges are touching sky.
A unique 3-in-1 On-line Trading Account
Seamless, Secure and Integrated 3-in-1 trading platform...
Our 3-in-1 trading platform links your banking, trading and demat accounts, ensuring
unmatched convenience for customers.
With an ICICIdirect.com account, you get the following benefits:
Wide range of products
Share trading in both NSE and BSE, innovative offerings like - Margin, Margin Plus,
BTST, SPOT. Derivatives trading, overseas trading, mutual funds, IPOs and on-line life
insurance.
Control
You can be rest assured, that your order will be precisely for the amount you wanted it
to be, without any deviation, giving you full control of your money and your trades
Tracking and Review
Monitoring your investments is as important if not more than making that investment
itself. Our portfolio tracker and watch list along with SMS alerts will always keep you
updated on the status of your investments with us and act on them when required.
48

Security
Instead of transferring monies to a broker's pool or towards deposits, you can manage
your own demat and bank accounts when you trade through ICICIdirect.com. It provides
you the flexibility to pay only when you trade.
Award Winning Research
We understand the need for the right research to make the right investment decision and
has focused heavily n this area.
Our team with its consistent delivery has been voted as the 'Most preferred brand of
financial advisory services' at the CNBC Awaaz Consumer Awards, 2007.
Its main competitors are HDFC, Reliance and SBI .
49

DISCUSSIONS ON TRAINING
 KEY LEARNINGS:-
This project has been a great learning experience for me; at the same time it gave me
enough scope to implement my analytical ability..
This project has given me a insight about financial sector and a true vision about ICICI DIRECT.
I have got a deeper knowledge about de-mat account, bonds and online trading etc. Working
with ICICI DIRECT was an great experience as working with this organization helped me a lot
to know about securities and stock market. By working on this project, I also gain the knowledge
about the service profile of the company and its way of working.
How to open an DE-MAT account was a learning experience for me.
By the help of this project, I become able to know about the departmentation and
structure of the company. As on-line share trading is increasing day by day it is very
necessary to know the working of this particular work. This project gave me a golden
chance to work with the organization and learn all the important key points. The
manager’s work profile was the main ingredient I got to know.
The overall project was helpful for me as it covered financial sector’s
knowledge and financial services. ICICI direct .com is an unique account that integrates
your saving, trading and de-mat account.
50

SWOT ANALYSIS OF THE COMPANY:
Strengths
1. Management philosophy and commitment to maximize shareholders returns
2. Upgraded product design and development facilities to develop new products and aid
diversification
3. Ongoing activities to support up gradation of operational performance and rise in
productivity
4. Team of talented and committed professionals available to improve companies
performance Weakness
1. Competition from cheap imports
2. Low customer base
Opportunities
1. UFSL has initiated development of products for diesel application. This will provide
tremendous scope for diversification and growth
2. Acquisition of AMTEC to provide opportunities to access global OEMs
3. Opportunity to support AMTECs operations by supplying products from India
4. The introduction of new emission norms will provide UFSL opportunity to develop
injection systems and thereby upgrade the status of the company from product to system
supplier.
51

Threats, Risks & Concerns
1. Constant pressure to be cost competitive to meet customer expectations
2. Relentless pressure to maintain profitability due to rising input/raw material prices
3. Increasing popularity of alternative fuel vehicles, such as Hybrid, Hydrogen powered,
CNG and LPG vehicles poses new challenges for the company
52

ACHIEVEMENT AND AWARD
Winning is a habit that is assiduously cultivated at ICICI Securities Limited (i-
SEC). Be it deals, mandates or awards, we manage them all in our quite and efficient
way.
For us winning awards is a matter of pride and honor. Each new award is a manifestation
of our hard work and commitment to our clients.
Since inception, i-SEC’s expertise has been time and again widely recognized by both
domestic and international agencies.
Our Fixed Income team for the last two years (CY 2004 and 2005) has been
adjudged the “Best Bond House” in India by both Asia money and Finance Asia. The
equities team was adjudged the ‘Best Indian Brokerage House-2003’ by Asia money.
The Corporate Finance team, according to Bloomberg topped the M&A league tables in
2003.
53

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