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Project Report
Project Report
Project Report
A PROJECT REPORT
SUBMITTED BY
SUBHA LAXMI
(MAY-JUNE) 2019
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ACKNOWLEDGEMENT
Would like to express my deep sense of gratitude to the respectable guide distinguished
personalities for their precious suggestions and encouragement during the project.
The experience which is gained by me during the project is essential for me at the turning point
of my career.
I am also thankful to MS. SWATI CHAUHAN for providing the guidance and suggestion
Last but not the least I would like to thank company officials, my friends & family members for
their constant support.
SUBHA LAXMI
MBA
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DECLARATION
titled “(comparative study of equity & debt mutual fund of reliance securities ltd.)” under the
guidance of “MS. SWATI CHAUHAN” at Institute of Professional Education and Research,
Bhopal. This is an original piece of work & I have not submitted it earlier elsewhere.
Date: Signature:
Place: Name:
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TABLE OF CONTENT
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CHAPTER – 1
EXECUTIVE SUMMARY
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EXECUTIVE SUMMARY
Now a day, there is a tough competition in financial avenues due to increase in the investment
products. People can get many investment options to invest their savings. Selecting one from the
many available options considering many associated factors is a very complex process.
Reliance Mutual fund is one of India’s largest brokerage and securities distribution house in
India. It is new to securities market but still among the top 5 performing company leaving far
behind the oldest companies. It is considered to be one of the leading investment broking house
catering to the needs of both institutional and non-institutional investor categories with presence
all over the country through franchises and co-coordinators.
Financial service Industry which is basically my concern industry around which my project has
to be revolved in really a very complex industry and to work for this was really a complex and
hectic task.
Financial service sector was quite similar in offering and products and because of that it
was very difficult to discriminate between our product and products of competitors.
Target customers and respondents were too busy person that to get their time and view
for specific questions was very difficult.
Sensitivity of the industry was also a very frequent factor which was very important to
measure correctly.
Area covered for the project while doing job also very large and it was very difficult to
correlate two different customers/respondents’ views in a one.
Every financial customer has his/her own need and according to the requirements of the
customer product customization was possible.
In this project I studied the schemes of Reliance Mutual Fund and their returns in various period
of time which help me in knowing how the various schemes are performing and the reasons
behind it. I also came to know the risk associated with various schemes and how risk and returns
are related.
Basically, in this project I analyzed that what factors are really responsible for designing of
portfolio of an investor in this competitive era determine which strategy may be appropriate to
help to achieve our financial goal.
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CHAPTER – 2
OVERVIEW OF SECTOR
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Securities Market in India: An Overview
Introduction
The last decade (2000-2010) has been the most eventful period for the Indian securities market
during which it took major strides to carve a niche for itself in the global securities markets. The
major developments which hastened this incredible journey can broadly be observed under three
categories, viz. improved market microstructure, introduction of new products and progressive
changes in the regulatory framework.
The facility of DMA was introduced for institutional investors in the year 2008 which provided
them direct access to the exchange trading system through the broker’s infrastructure without
manual intervention by the broker. Currently, around 25-30% of FII trades are routed through
DMA and it is expected to increase to 40-45% by end-2011. DMA ensured direct control over
orders by institutional investors, faster order placement and execution, more arbitrage
opportunities, improved liquidity, greater transparency and lower impact cost for large order.
Algorithmic trading refers to orders that are automatically placed in the market by software
programs, built on certain mathematical models. Smart Order Routing enables the broker’s
trading engines to systematically choose the execution destination from out of trading platforms
of different stock exchanges based on factors such as price, costs, speed, likelihood of execution
and settlement, size, nature or any other consideration relevant to the execution of the order.
Finally, global exchanges introduced co-location services to support high frequency trading
using Algorithmic trading and DMA. The details of the co-location facility at NSE have been
discussed later in the chapter.
On the clearing and settlement front, in July 2001, the Indian securities market made a paradigm
shift from the century old account period settlement to a T+5 rolling settlement. Keeping abreast
with the dynamics of the securities market and to integrate with the world markets, in April
2002, the Indian capital markets joined the league of developed markets in the world by the
introduction of the T+3 rolling settlement cycle and further to T+2 in April 2003.
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Dematerialization which was introduced in 1998 achieved 100% de -mat trading at NSE in June
2002.
In the primary markets, SEBI made IPO grading compulsory for companies coming out with the
IPOs of equity shares in May 2007. An IPO Grade provides an additional input to investors in
arriving at an investment decision based on independent and objective analysis. In addition,
SEBI introduced the process of Application Supported by Blocked Amount (ASBA) which
ensured that the application money does not move out of the account of applicant but is only
blocked and debited to the extent of allotment. ASBA helped to overcome the earlier refund
related concerns upon allotment and enabled investors to earn interest on the blocked amount.
Regulatory Framework
The regulatory framework has been strengthened. The corporation and demutualization of stock
exchanges was mandated through amendments in SCRA 1956 in the year 2004. In the same year,
amendment to SCRA was also made to provide for clearing and settlement by a clearing
corporation. It provided that an exchange with the approval of SEBI could transfer the duties and
functions of a clearing house to a recognized clearing corporation.
In addition to the introduction of new products, an endeavor was made to strengthen the existing
products which had not gained momentum. Notable among them were the corporate bonds and
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interest rate futures. Simplification of corporate bond issuance norms and introduction of repos
in corporate bonds were some of the measures taken to resurrect this market segments.
Indian exchanges are entering into cross border agreements with overseas exchanges for
introducing their products on their trading platform. By providing an opportunity to the investors
to diversify their portfolios internationally, this could add another dimension to the Indian
securities markets. For example: in March 2010, NSE and Chicago Mercantile Exchange (CME)
had announced cross-listing arrangements. Under the cross-listing arrangements, the S&P CNX
Nifty Index (Nifty 50), the leading Indian benchmark index representing 22 sectors of the Indian
economy, has been made available to CME for the creation and listing of U.S. dollar
denominated Nifty futures contracts for trading on CME. Keeping in view the increased
integration of global markets, the market regulator also allowed Indian stock exchanges to extend
their trade timings from 9:55 a.m.-3:30 p.m. to 9:00 a.m.-5:00 p.m.
The securities market is endeavoring to make equity finance available for small and medium
enterprises. In May 2010, SEBI has permitted setting up of a stock exchange or trading platform
for SMEs by stock exchanges having nationwide trading terminals.
In addition to this, various initiatives have been taken by SEBI to strengthen the corporate
governance among the listed companies. Clause 49 has been amended from time to time to
improve disclosures, strengthen the responsibilities of audit committees and include provision for
whistle blower policy and restrict the term of independent directors etc. Clause 35 of the Listing
Agreement has also been amended to provide for disclosure of details of shares held by
promoters and promoter group entities in listed companies which are pledged or otherwise
encumbered. This was done with a view to ensure that while deciding to invest in the company,
the investors may factor in information about the pledged or otherwise encumbered shares held
by promoter/promoter group in the company, as the extent of pledge/ encumbrance may have a
significant impact on the price of the shares. In a major move aimed at bringing in more
accountability and enhancing investor participation, the government has made it mandatory for
all listed companies, other than listed public sector enterprises (PSEs), to raise public
shareholding to 25%; listed PSEs must maintain public shareholding of at least 10%. Any listed
company which falls short of these prescribed limits on the commencement of the Securities
Contracts (Regulation) (Amendment) Rules, 2010, shall increase its public shareholding to the
stipulated level within a period of three years. Companies coming out with initial public offers to
get listed, must adhere to the above public shareholding limits at the time of their listing. This
move would reduce price manipulation by creating large and diversified public shareholdings.
In a recent initiative on the regulatory front, a Financial Stability and Development Council
(FSDC) has been created to strengthen and institutionalize the mechanism for maintaining
financial stability and monitoring macro prudential supervision of the economy.
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2.Structure and Developments of the Indian Securities Markets
during 2009-10
Key strengths of the Indian securities markets
The securities markets in India have made enormous progress in developing sophisticated
instruments and modern market mechanisms. The key strengths of the Indian capital market
include a fully automated trading system on all stock exchanges, a wide range of products, an
integrated platform for trading in both cash and derivatives, and a nationwide network of trading
through over 4,6184 corporate brokers.
A significant feature of the Indian securities market is the quality of regulation. The market
regulator, Securities and Exchange Board of India (SEBI) is an independent and effective
regulator. It has put in place sound regulations in respect of intermediaries, trading mechanism,
settlement cycles, risk management, derivative trading and takeover of companies. There is a
well-designed disclosure based regulatory system. Information technology is extensively used in
the securities market. The stock exchanges in India have the most advanced and scientific risk
management systems. The growing number of market participants, the growth in volume of
securities transactions, the reduction in transaction costs, the significant improvements in
efficiency, transparency and safety, and the level of compliance with international standards have
earned for the Indian securities market a new respect in the world.
Market Segments
The securities market has two interdependent and inseparable segments, the new issues
(primary) market and the stock (secondary) market. The primary market provides the channel for
creation and sale of new securities, while the secondary market deals in securities previously
issued. The securities issued in the primary market are issued by public limited companies or by
government undertakings. The resources in this kind of market are mobilized either through the
public issue or through private placement route. It is a public issue if anyone can subscribe it,
whereas if the issue is made available to a selected group of persons it is termed as private
placement. There are two major types of issuers of securities, the corporate entities who issue
mainly debt and equity instruments and the government (central as well as state) who issue debt
securities (dated securities and treasury bills).
The secondary market enables participants who hold securities to adjust their holdings in
response to changes in their assessment of risks and returns. Once the new securities are issued
in the primary market they are traded in the stock (secondary) market. The secondary market
operates through two mediums, namely, the over-the-counter (OTC) market and the exchange-
traded market. OTC markets are informal markets where trades are negotiated. Most of the trades
in the government securities are in the OTC market. All the spot trades where securities are
traded for immediate delivery and payment take place in the OTC market. The other option is to
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trade using the infrastructure provided by the stock exchanges. The exchanges in India follow a
systematic settlement period. All the trades taking place over a trading day (day=T) are settled
together after a certain time (T+2 day). The trades executed on exchanges are cleared and settled
by a clearing corporation. The clearing corporation acts as a counterparty and guarantees
settlement. A variant of the secondary market is the forward market, where securities are traded
for future delivery and payment. A variant of the forward market is Futures and Options market.
Currently only two exchanges viz., National Stock Exchange of India Ltd. (NSE) and Bombay
Stock Exchange (BSE) provide trading in the equity futures & options in India.
Market Participants
In every economic system, some units, individuals or institutions, are surplus units who are
called savers, while others are deficit units, called spenders. Households are surplus units and
corporate and Government are deficit units. Through the platform of securities markets, the
savings units place their surplus funds in financial claims or securities at the disposal of the
spending community and in turn get benefits like interest, dividend, capital appreciation, bonus
etc. These investors and issuers of financial securities constitute two important elements of the
securities markets. The third critical element of markets is the intermediaries who act as conduits
between the investors and issuers. Regulatory bodies, which regulate the functioning of the
securities markets, constitute another significant element of securities markets. The process of
mobilization of resources is carried out under the supervision and overview of the regulators.
The regulators develop fair market practices and regulate the conduct of issuers of securities and
the intermediaries. They are also in charge of protecting the interests of the investors. The
regulator ensures a high service standard from the intermediaries and supply of quality securities
and non-manipulated demand for them in the market.
The four important elements of securities markets are the investors, the
issuers, the intermediaries and regulators.
Investors
An investor is the backbone of the capital market of any economy as he is the one lending his
surplus resources for funding the setting up or expansion of companies, in return for financial
gain.
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in instruments like currency, deposits, contractual savings (pension and provident funds) and
investment in government securities remained broadly stable during the year.
Issuers
Primary markets
An aggregate of ` 10,075,102 million (US $ 223,197 million) were raised by the government
and corporate sector during 2009-10 as against `6,588,920 million (US $ 129,321 million) in
2008-09, an increase of 52.91%. Private placement accounted for 93.07% of the domestic total
resource mobilization by the Corporate Sector. Resource mobilization through euro issues
escalated significantly by 233.48% to `159,670 million (US $ 3,537 million) in 2009-10.
Intermediaries
The term “market intermediary” refers to those who are in the business of managing individual
portfolios, executing orders, dealing in or distributing securities and providing information
relevant to the trading of securities. The market mediators play an important role in the stock
exchanges; they put together the demands of the buyers with the offers of the security sellers. A
large variety and number of intermediaries provide intermediation services in the Indian
securities markets. The market intermediary has a close relationship with the investor with whose
protection the regulator is primarily tasked. As a consequence, a large portion of the regulation
of a securities industry is directed towards the market intermediary.
Regulators
The absence of conditions of perfect competition in the securities market makes the role of
regulator extremely important. The regulator ensures that the market participants behave in a
desired manner so that securities markets continue to be a major source of finance for corporate
and government and the interest of investors are protected.
The responsibility for regulating the securities market is shared by Department of Economic
Affairs (DEA), Ministry of Corporate Affairs (MCA), Reserve Bank of India (RBI) and SEBI.
The orders of SEBI under the securities laws are appealable before a Securities Appellate
Tribunal (SAT).
Most of the powers under the SCRA are exercisable by DEA while a few others by SEBI. The
powers of the DEA under the SCRA are also concurrently exercised by SEBI. The powers in
respect of the contracts for sale and purchase of securities, gold related securities, money market
securities and securities derived from these securities and ready forward contracts in debt
securities are exercised concurrently by RBI.
Regulatory Framework
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At present, the five main Acts governing the securities markets are (a) the SEBI Act, 1992; (b)
the Companies Act, 1956, which sets the code of conduct for the corporate sector in relation to
issuance, allotment and transfer of securities, and disclosures to be made in public issues; (c) the
Securities Contracts (Regulation) Act, 1956, which provides for regulation of transactions in
securities through control over stock exchanges (d) the Depositories Act, 1996 which provides
for electronic maintenance and transfer of ownership of demat shares and (e) Prevention of
Money Laundering Act, 2002.
Legislations
SEBI Act, 1992: The SEBI Act, 1992 was enacted to empower SEBI with statutory powers
for (a) protecting the interests of investors in securities, (b) promoting the development of the
securities market, and (c) regulating the securities market. Its regulatory jurisdiction extends over
corporates in the issuance of capital and transfer of securities, in addition to all intermediaries
and persons associated with securities market. It can conduct enquiries, audits and inspection of
all concerned and adjudicate offences under the Act. It has powers to register and regulate all
market intermediaries and also to penalize them in case of violations of the provisions of the Act,
Rules and Regulations made thereunder. SEBI has full autonomy and authority to regulate and
develop an orderly securities market.
Securities Contracts (Regulation) Act, 1956: It provides for direct and indirect control
of virtually all aspects of securities trading and the running of stock exchanges and aims to
prevent undesirable transactions in securities. It gives Central Government regulatory
jurisdiction over (a) stock exchanges through a process of recognition and continued supervision,
(b) contracts in securities, and (c) listing of securities on stock exchanges. As a condition of
recognition, a stock exchange complies with conditions prescribed by Central Government.
Organized trading activity in securities takes place on a specified recognized stock exchange.
The stock exchanges determine their own listing regulations which have to conform to the
minimum listing criteria set out in the Rules.
Depositories Act, 1996: The Depositories Act, 1996 provides for the establishment of
depositories in securities with the objective of ensuring free transferability of securities with
speed, accuracy and security by (a) making securities of public limited companies freely
transferable subject to certain exceptions; (b) dematerializing the securities in the depository
mode; and (c) providing for maintenance of ownership records in a book entry form. In order to
streamline the settlement process, the Act envisages transfer of ownership of securities
electronically by book entry without making the securities move from person to person. The Act
has made the securities of all public limited companies freely transferable, restricting the
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company’s right to use discretion in effecting the transfer of securities, and the transfer deed and
other procedural requirements under the Companies Act have been dispensed with.
Companies Act, 1956: It deals with issue, allotment and transfer of securities and various
aspects relating to company management. It provides for standard of disclosure in public issues
of capital, particularly in the fields of company management and projects, information about
other listed companies under the same management, and management perception of risk factors.
It also regulates underwriting, the use of premium and discounts on issues, rights and bonus
issues, payment of interest and dividends, supply of annual report and other information.
Prevention of Money Laundering Act, 2002: The primary objective of the Act is to
prevent money-laundering and to provide for confiscation of property derived from or involved
in money-laundering. The term money-laundering is defined as whoever acquires, owns, possess
or transfers any proceeds of crime; or knowingly enters into any transaction which is related to
proceeds of crime either directly or indirectly or conceals or aids in the concealment of the
proceeds or gains of crime within India or outside India commits the offence of money-
laundering. Besides providing punishment for the offence of money-laundering, the Act also
provides other measures for prevention of Money Laundering. The Act also casts an obligation
on the intermediaries, banking companies etc. to furnish information, of such prescribed
transactions to the Financial Intelligence Unit- India, to appoint a principal officer, to maintain
certain records etc.
Secondary Market
Exchanges in the country offer screen-based trading system. There were 9,772 trading members
registered with SEBI as at end March 2010. The market capitalization has grown over the period
indicating more companies using the trading platform of the stock exchange. The All-India
market capitalization was around ` 61,704,205 million (US $ 1,366,952 million) at the end of
March 2010. The market capitalization ratio is defined as market capitalization of stocks divided
by GDP. It is used as a measure to denote the importance of equity markets relative to the GDP.
It is of economic significance since market is positively correlated with the ability to mobilize
capital and diversify risk. The All- India market capitalization ratio increased to 94.20% in 2009-
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10 from 55.40% in 2008-09 (Table 1-4). At end of March 2010, NSE Market Capitalization ratio
fell to 76.28% during 2009-10 while BSE Market Capitalization ratio was 78.26%.
NSE has set up infrastructure that serves as a role model for the securities industry in terms of
trading systems, clearing and settlement practices and procedures. The standards set by NSE in
terms of market practices, products, technology and service standards have become industry
benchmarks and are being replicated by other market participants. It provides screen-based
automated trading system with a high degree of transparency and equal access to investors
irrespective of geographical location. The high level of information dissemination through on-
line system has helped in integrating retail investors on a nation-wide basis.
NSE has been playing the role of a catalytic agent in reforming the market in terms of
microstructure and market practices. Right from its inception, the exchange has adopted the
purest form of demutualized set up whereby the ownership, management and trading rights are in
the hands of three different sets of people. This has completely eliminated any conflict of interest
and helped NSE to aggressively pursue policies and practices within a public interest framework.
It has helped in shifting the trading platform from the trading hall in the premises of the
exchange to the computer terminals at the premises of the trading members located country-wide
and subsequently to the personal computers in the homes of investors. Settlement risks have been
eliminated with NSE’s innovative endeavors in the area of clearing and settlement viz., reduction
of settlement cycle, professionalization of the trading members, fine-tuned risk management
system, dematerialization and electronic transfer of securities and establishment of clearing
corporation. As a consequence, the market today uses the state-of-art information technology to
provide an efficient and transparent trading, clearing and settlement mechanism.
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CHAPTER – 3
INTODUCTION OF COMPANY
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INTRODUCTION OF COMPANY
Reliance Money is promoted by Reliance Capital; one of India's leading and fastest growing
private sector financial services companies, ranking among the top 3 private sector financial
services and banking companies, in terms of net worth. Reliance Capital is a part of the Reliance
Anil Dhirubhai Ambani Group. Thus, Reliance Money provides a comprehensive platform,
offering an investment avenue for a wide range of asset classes. Its endeavor is to change the
way India transacts in financial market and avails financial services. Reliance Money offers a
single window facility, enabling you to access amongst others, Equities, Equity and Commodity
derivatives, Offshore Investments, IPO‟s, Mutual Funds, Life Insurance and General Insurance
products.
To achieve & sustain market leadership, Reliance Money shall aim for complete customer
satisfaction, by combining its human and technological resources, to provide world class quality
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services. In the process Reliance Money shall strive to meet and exceed customer's satisfaction
and set industry standards.
Mission Statement
“Our mission is to be a leading and preferred service provider to our customers, and we aim to
achieve this leadership position by building an innovative, enterprising, and technology driven
organization which will set the highest standards of service and business ethics.”
The success story of the company is driven by 9 success sutras adopted by it namely Trust,
Integrity, Dedication, Commitment, Enterprise, Hard work, Homework, Team work play,
Learning and Innovation, Empathy and Humility and last but not the least it’s the Network.
These are the values that bind success with Reliance Money.
Online Trading in Equities in both cash and derivative segments through Reliance
Securities Ltd, which is a member of both NSE and BSE
Overseas investment will be available through a separate platform. CFD (Contract for
Difference) Platform
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Online / Offline subscription of Initial Public Offerings (IPO).
Online enquiry of all Reliance Money products, namely equity, commodity, overseas
investments, Life and General Insurance through “Online query” in “Customer Service”.
A host of value-added services like live news from Dow Jones and Commodity Control,
fundamental and technical research reports, risk analyzer, personal finance tracker,
portfolio tracker, etc.
Equity Reliance Money offers its clients competitively priced Equity broking, PMS and
Portfolio Advisory Services. Trading execution assistance provided to clients. In addition,
Reliance Money provides independent and unbiased view on markets along with trading
strategies and entry / exit points for taking an informed decision.
Mutual Funds A mutual fund is a professionally managed fund of collective investments that
collects money from many investors and puts it in stocks, bonds, short-term money market
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instruments, and/or other securities. Reliance Money offers dedicated research & expert advice
on Mutual Funds. Mutual funds are considered to have low risk factors owing to diversification
of assets into various sectors and scripts or instruments within.
Life-Insurance Reliance Money assists its clients in choosing a customized plan which will
secure the family’s future and their expenses post-retirement. Clients can choose from different
plans of almost all Insurance Companies where they can invest their money. Clients can choose
from products and services that channelize their savings and protect their needs while
guaranteeing security and returns for life. A team of experts will suggest the best Insurance
scheme which suits the client’s requirement.
General Insurance General Insurance is all about protecting against all kind of insurable
risks. Reliance Money assists you in areas of Health insurance, Travel insurance, Home
insurance and Motor insurance.
Commodities A single. platform to trade on both the major commodity exchanges i.e.
NCDEX and MCX. In addition, In-house research desk shall provide research reports on all
major commodities which shall enable in getting views for trading and diversify client’s
holdings. Trade Execution assistance is also provided to clients
Tax Planning With a view to provide complete wealth management solutions, Reliance
Money’s wealth management offerings include tax related services like: Tax Planning &
advisory Filing Tax returns for individuals.
Real Estate Advisory Services Broking Model for lease/rent and buy/sell of property
Valuation Real-estate Consulting – Corporate earnings model, Lease rentals, etc.
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CHAPTER – 4
JOB DESCRIPTION
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Trading
SHARE TRADING & D-MAT A/C: Simply put, acquiring equity shares of a company
to the extent of shares that you have acquired. D-mat account is just like a bank account but the
basic difference is that we keep money in bank account and shares in D-Mat account.
DERIVATIVES: The term “Derivative” refers to an asset that has no independent value, but
„derives‟ its value from that of an underlying asset. The underlying asset could be
securities, commodities, bullion, currency, livestock, or anything else.
COMMODITIES TRADING: Now we can trade in commodities and make money, just
like buying and selling shares of companies without owning an iota of the commodities we trade
in. The kind of commodities being traded are:
Agriculture – based commodities such as rice, wheat, sugar etc.
Mineral – based commodities such as gold, platinum, aluminum, copper etc.
Energy based commodities such as crude oil.
Gold coins
DEMAT ACCOUNT
There are many broking houses doing business in India and they charge a brokerage on every
transaction made online or offline. (Buying and Selling are treated as separate transaction).
Reliance Money’s advantage over others is that it’s charging the lowest brokerage in the market
which is just 1 paisa on every executive trade irrespective of the volume traded. Reliance Money,
the brokerage and distribution arm of Reliance ADA Group, aims to tap investors in the smaller
towns and cities through a flat fee structure.
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Cost Effective
Convenience
Security
3 in 1 Integrated Access
Other Services like research, live news from Reuter and Dow Jones, etc.
2. Lowest brokerage: Reliance offers the lowest brokerage of 1 paisa which is very less with
respect to the other DPs in the market.
3. User friendly software: The portal offered is very easy to understand and use.
4. Forex and offshore investment: Reliance provides the offshore facility which no other AMC
is providing in the market.
5. Better research and news: Reliance offers news from the DOW JONES and REUTERS.
EQUITY
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increases. The terms share, equity and stock mean the same thing and can be used
interchangeably. Holding a company's stock means that you are one of the many owners
(shareholders) of a company, and, as such, you have a claim (to the extent of your
holding) to everything the company owns. Yes, this means that technically, you own a
portion of every piece of furniture; every trademark; every contract, etc. of the company.
As an owner, you are entitled to your share of the company's earnings as well as any
voting rights attached to the stock.
CHARACTERISTICS OF EQUITY
When you invest your money in a debt investment such as a bank deposit, bonds, etc.,
you are promised a fixed amount of interest on your investment and return of capital.
This isn’t the case with an equity investment. By becoming an owner, you bear the risk of
the company not being successful. However, the rewards for bearing this risk are high.
You, as an equity shareholder, are entitled to a share in the profits of the company’s
business as well as any appreciation in the perceived value of the shares.
Limited liability
Another extremely important feature of equity is its limited liability, which means that, as
a part-owner of the company, you are not personally liable if the company is not able to
pay its debts. In case of other entities such as partnerships, if the partnership goes
bankrupt, the partners are personally liable towards the creditors/lender.
DEBT
Debt instruments are contracts in which one party lends money to another on pre-determined
terms with regard to rate of interest to be paid by the borrower to the lender, the periodicity of
such interest payment, and the repayment of the principal amount borrowed (either in
installments or in bullet). In the Indian securities markets, we generally use the term „bond‟ for
debt instruments issued by the Central and State governments and public sector organizations,
and the term „debentures‟ for instruments issued by private corporate sector.
INSTRUMENT FEATURES
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The principal features of a bond are:
a) Maturity
b) Coupon
c) Principal
Maturity of a bond refers to the date on which the bond matures, or the date on which the
borrower has agreed to repay (redeem) the principal amount to the lender. The borrowing is
extinguished with redemption, and the bond ceases to exist after that date. Term to maturity, on
the other hand, refers to the number of years remaining for the bond to mature. Term to maturity
of a bond changes every day, from the date of issue of the bond until its maturity.
Coupon Rate refers to the periodic interest payments that are made by the borrower (who is also
the issuer of the bond) to the lender (the subscriber of the bond) and the coupons are stated
upfront either directly specifying the number (e.g.8%) or indirectly tying with a benchmark rate
(e.g. MIBOR+0.5%). Coupon rate is the rate at which interest is paid, and is usually represented
as a percentage of the par value of a bond.
Principal is the amount that has been borrowed, and is also called the par value or face value of
the bond. The coupon is the product of the principal and the coupon rate.
1. Government Securities,
2. Public Sector Units (PSU) bonds, and
3. Corporate securities.
The market for Government Securities comprises the Centre, State and State-sponsored
securities. In the recent past, local bodies such as municipalities have also begun to tap the debt
markets for funds.
The PSU bonds are generally treated as surrogates of sovereign paper, sometimes due to explicit
guarantee and often due to the comfort of public ownership. Some of the PSU bonds are tax free,
while most bonds including government securities are not tax-free. The RBI also issues tax-free
bonds, called the 6.5% RBI relief bonds, which is a popular category of tax-free bonds in the
market.
Corporate bond markets comprise of commercial paper and bonds. These bonds typically are
structured to suit the requirements of investors and the issuing corporate, and include a variety of
tailor- made features with respect to interest payments and redemption
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CHAPTER – 5
FIELD WORK
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FIELD WORK
Achieving accuracy in any research requires in depth study regarding the subject. As the prime
objective of the project is compare various Investment products available in the market with the
existing players in the market and the impact of entry of private players in the market, the
research methodology adopted was basically based on primary data via which the most recent
and accurate piece of first-hand information that could be collected from all possible source.
Secondary data was used to support primary data wherever needed.
To conduct this research on the target population was about to know investment
objectives and experience, time horizon, risk tolerance and financial situation that people
are aware or not aware from Investment in equity and debt market.
With accurate information that will assist us in providing the best recommendations that
will be suitable for your investment needs and to reallocate the investments in your
portfolio.
Target geographic area was Bhopal area. Sample size of 100 people was taken
To these 100 people a questionnaire was given, the questionnaire was a closed ended
questionnaire.
Some people already have investment plan were also interviewed to know their
prospective.
Finally, the collected data and information was analyzed and compiled to arrive at the
conclusion and recommendation give
RESEARCH PROBLEM
Financial service sector was quite similar in offering and products and because of that it
was very difficult to discriminate between our product and products of the competitors.
Target customers and respondents were too busy persons that to get their time and view
for specific questions was very difficult.
Sensitivity of the industry was also a very frequent factor which was very important to
measure correctly.
Area covered for the project while doing job also was very large and it was very difficult
to correlate two different customers/respondents’ views in a one.
Every financial customer has his/her own need and according to the requirements of the
customer product customization was possible.
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RESEARCH OBJECTIVE
The main objective of this project is concerned with getting the opinion of people
regarding the investment in equity and debt and create awareness while with the
generation of leads.
I have tried to explore the general opinion about stock market. It also covers why/ why
not investors are availing the services of financial advisors.
SAMPLE DESIGN
Sampling procedure:
The sample is selected in a random way, irrespective of them being investor or not or availing
the services or not. It was collected through mails and personal visits to the known persons, by
formal and informal talks and through filling up the questionnaire prepared. The data has been
analyzed by using the measures of central tendencies like Mean, median, mode. The group has
been selected and the analysis has been done on the basis statistical tools available.
Sample size:
The sample size of my project is limited to 100 only. Out of which only 44 people attempted all
the questions. Other 56 not investing in equity market nor in debt market.
Sample design:
Data has been presented with the help of bar graph, pie charts, line graphs etc.
DATA COLLECTION
Data sources: Research is totally based on primary data. Secondary data can be used only for
the reference. Research has been done by primary data collection, and primary data has been
collected by interacting with various people. The secondary data has been collected through
various journals and websites and some special publications of R-MONEY.
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Questionnaire method
Direct interview method
Observation method
INTERNET
MAGZINES
NEWSPAPERS
JOURNALS
LIMITATION
1. Cold Calling
Voice and accent play a major role.
The right time to call a customer cannot be decided, as the customer may in a different
mood at the time of calling.
Time consuming
2. Corporate
Time consuming
3. Data Collection
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Possibility of error in analysis of data due to small sample size.
Some of the people provide false data as they were scared about providing actual data
DATA ANALYISIS
1. Relationship between Age & Tenure of investment
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3.Relation between Investment & Satisfaction
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4.Relation between age of investor and objective of investment
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6.Relation between age of investor & tenure
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CHAPTER- 6
LEARNING IN INTERNSHIP
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LEARNING IN INTERNSHIP
The income group which fall under the category of 4.5-6 L invest more money than the
other income group.
The level of satisfaction is more of investor during investment in mutual fund and in real
estate.
In the long-term people usually go for other alternative like real estate (property)as
compared to the financial instrument.
Younger people invest money for long term as depicted by the graphs the age group 25 -
40, go for long term gain usually.
Generally, people invest in the stock market for high return at younger age
Equity investment is high risk and high gain therefore it is mostly done by the younger
age group people for long term investment and for wealth appreciation.
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CHAPTER – 7
ACHIEVEMENTS AND CONTRIBUTIONS
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CONTRIBUTIONS
Giving information to the client about different products of reliance securities ltd.
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References
Websites
www.reliancemoney.com
www.mutualfundsindia.com
www.valueresearchonline.com
www.moneycontrol.com
www.morningstar.com
www.yahoofinance.com
www.theeconomictimes.com
www.rediffmoney.com
www.bseindia.com
www.nseindia.com
www.investopedia.com
www.scribd.com
www.online.sagepub.com
www.google.com
www.reliancemoney.co.in
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ANNEXURES
(Questionnaire)
The purpose of these questions is to assist us in defining your investment goals by assessing your
attitude toward risk and return. This questionnaire deals with the assets you are considering
investing in a new account and will be a helpful tool in determining your current investment
profile. It will run through a short series of questions designed to outline your current financial
objectives, your time horizon and the amount of risk you are willing and able to assume. The
answers to these questions will help us determine which strategy may be appropriate to help you
achieve your financial goals.
2. What is the time horizon you have to achieve your financial goal?
0-5 years
6-10 years
11-14 years
15 years or longer
5. During the next five years, your monthly income will most likely:
Decline
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Remain about the same
Increasing slightly
Increase Significantly
7. Are you planning any major expenditures greater than 10% of your investment assets?
Within the next year
Within the next 5 years
Within the next 5 to 10 years
None expected
8.How do you intend to use the income earned by your investment portfolio?
Reinvest at least 80% of my earnings
Reinvest between 20% and 80% of my earnings
Receive at least 80% of my earnings as income
9. Taking into consideration all sources of income, what is your current attitude towards your
income needs:
I can forego at least 10% of my current income
Present income is adequate for present needs
I need at least 10% more income
10. How many months of living expenses could be safely covered by your current liquid
investments?
More than 12 months
Between 4 and 12 months
Less than 4 months
11. Which of the following investments would you feel most comfortable with taking into
consideration the risk return trade-off?
Equity securities of established companies
Mix of equity securities and government bonds
Government bonds
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12. What factor would you consider most important before choosing an investment?
How quickly I will be able to increase my wealth.
The opportunity for steady growth.
The amount of monthly income the investment will generate.
The safety of my investment principal.
13. Which of the following best describes your reaction if the value of your portfolio suddenly
declined 15%?
I would be very concerned because I cannot accept fluctuations in the value of my
portfolio.
I invest for long term growth, but would be concerned about even a temporary
decline.
If the amount of income I received was unaffected, it would not bother me.
I invest for long term growth and accept temporary fluctuations due to market
influences.
14. When it comes to investing in stock or bond mutual funds (or individual stocks and bonds), I
would describe myself as a/an...
Very inexperienced investor
Somewhat inexperienced investor
Somewhat experienced investor
Experienced investor
Very experienced investor
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