MUTUAL FUND IN INDIA

INTRODUCTION

A Mutual Fund is an investment security type that enables investors to pool their money together
into one professionally managed investment .Mutual Fund can invest in Stocks, bonds, cash and
other assets. These Underlying security Type , called holding combine to form one Mutual Fund
,also called a portfolio. Mutual Funds can be considered baskets of Investments. Each basket holds
dozens or hundreds of security types ,such as stocks or bonds. Therefore when an investors buys
a Mutual Fund, they are buying a basket of investment securities.

Mutual fund investment trace its origin to the early pioneering investments of Scottish and English
investors in the American West in the 1800s and later of the early global portfolio investors in
Japan in the 1960s.The investment trust concept spread rapidly through Europe, the first American
fund was created in. The idea spread quickly around the world, but it came to India only in
the1960s.The Mutual Fund Industry in India started in 1963 with the formation of Unit Trust of
India (UTI),at the initiative of the Government of India and Reserve Bank of India. The year 1987
marked the entry of non-uti, public sector .Mutual Fund set up by public sector banks and Life
Insurance of India Limited (LIC) and General Insurance Corporation of India Limited(GIC),with
the entry of private sector funds in the year 1993, a new era started in the Indian Mutual Fund
Industry , giving the Indian investors a wider choice of fund families.

Mutual Funds are financial intermediaries which collect the savings of investors and invest them
in primary and secondary securities, like money market instruments, corporate and government
bonds ,and equity shares of joint stock companies. They have emerged as rivals to banks in saving
mobilisation because banking services could not show extra-ordinary efforts to employ household
savings in remunerative sectors.
Mutual Funds are governed by Securities and Exchange Board of India (SEBI). SEBI has the
authority to issue guidelines and to supervise and regulate the working of Mutual Funds
Regulation. Usually NAV of a Mutual Fund changes daily according to the underlying assets of
the fund. Mutual Funds are safe investments as they are compulsorily registered and operated
within the SEBI regulations. The main benefit of investing through a Mutual Fund is that you get
access to professional fund management and diversified portfolio at a relatively small amount of
investments.
COMPANY PROFILE

2.1 History of Nirmal Bang

Nirmal Bang one of the leading stock broking companies in India, Founded in 1986 by Shri Nirmal
Bang, Shri Dilip bang and Shri Kishore Bang. Nirmal Bang has been offering stock broking and
financial services for more than 30 years. They started as a small localised player and ultimately
transformed into a diverse group. Nirmal Bang is located in 26 states across India. Company is a
first to become the registered member of the Securities and Exchange Board of India (SEBI),
Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE),
Multi Commodity Exchange of India Limited (MCX), National Commodity & Derivatives
Exchange Limited (NCDEX), National Commodity and Derivatives Exchange Limited and also a
depository participant of NSDL and CDS. They provide quality of services on financial products
including equities, derivatives, commodities, currency derivatives, mutual funds, insurance, and
depository services. The company offers daily and company reports, stock ideas, and sector
updates .Company is continuously improving its product and services to meet investors’
expectations. Services offered by Nirmal Bang are Customer service desk, Margin Funding,
Advance Brokerage, Back office software, Advisory Services. Team works together to provide
superior results to their investors by identifying there financial goal and risk tolerance levels.
Professionals are always on call and provide services throughout the year, not just at the end of the
year. Such services are essential for delivering solution and maintaining good relationship with
investors by maximizes their return. Company has made growth form 1986 till now by maintaining
ethical standards at all times and lays strong emphasis on honesty ,integrity and confidentiality.

2.2 Brief details of Top Management

 Name Position
Shri Kishore Bang Founder and Managing Director
Shri Dilip Bang Founder and Managing Director
Shri Rakesh Bhandari Chartered Accountant
Shri Sunil Jain Chartered Accountant

Nirmal Bang group is headed by Shri Kishore Bang and Shri Dilip Bang who bring forward
industry expertise, insight and most importantly, create an environment of unmatched commitment
to clients.
Shri Kishore Bang : is the Founder and Managing director of Nirmal Bang. He is a visionary
with over 20 years of industry experience and has a in depth knowledge of Instrumental and retail
expansion of the group. He is responsible for operational and management aspects.
Shri Dilip Bang: is the Founder and Managing director of Nirmal Bang. He is a visionary with
over 24 years of industry experience and has a in depth knowledge of India capital market. He his
responsible for front end business operations and trading opportunities.
Shri Rakesh Bhandari: is the Chartered accountant of Nirmal Bang. He has vast experience of
more than 13 years in capital market industry.
Shri Sunil Jain: is the Chartered accountant of Nirmal Bang. He has vast experience of more than
10 years in Equity research.

2.3 Size of the organization

Turnover-
Nirmal Bang is a well capitalized group with net worth of 3500 crocres

Nirmal Bang authorized share capital is Rs.285000000

Paid up capital is Rs.5910700

Employees-

Nirmal Bang has 89 branches all over India. Number of employees working for Nirmal Bang are
more than 6000 .Employees are targeting different cities since 2009.

Geographical Spread-

Nirmal Bang is located in 26 states across India . It has 89 branches most of the branches are almost
in all capital of the states namely Mumbai, Chennai, Bangalore, Delhi etc.All branches are inter-
related so that clients can go anywhere .Nirmal Bang has more than 2000 franchises .

Awards received by Nirmal Bang.

● 2019
MCX Award-Broking House –Base Metals
BSE Premier League-Championship
MCX Premier League-Winning Team

● 2018
ASSOCHAM Excellence Awards-Commodity Broker of the Year

● 2017
Advisory India-1st Runner up Intraday Equity
CEO Award-Best Equity Research House, Commodity Broker
BSE Sensex Cup-Winner

● 2016
ASSOCHAM excellence Award-Best Marketing Research in Bullion Industry, Commodity
Broker of the year
NSDL star performer Awards-Leader in Go Green Initiative-3rd position

2.4 Mission and Vision

Mission

To work together with integrity and make customers feels valued.

Vision

To create valuable relationship and provide the best financial services most professionally.

Core Value

Respect our colleagues and the business itself.

3. INDUSTRY ANALYSIS

3.1 PESTEL
PESTEL is an analysis of the external macro-environment that affects all the firm. Such external
factors are beyond the firm’s control and sometimes it present as threats. (Political, economic,
social, technological, legal and environmental) analysis is a framework for marketers .This tool
helps to identify all of the various external factors that might affect a business .The goal is to figure
out just how the different factors influence business performance.

Political factors

Political factors affect profitability of business. Government policy plays an important role.
Change in government policy can be economic, legal or social. All firms must follow the law.
Political factors could add a risk and lead to a major loss it has power to change results. Political
decision can influence the rate of emergence of new technologies and its acceptance. The political
situation of the country affects its economic setting. The economic environment affects the
business performance.

● The political uncertainty has impact on mutual fund market. There is a dramatic drop in
net mutual fund inflow with Rs 6158crore according to data released by the Association of Mutual
Funds of India(AMFI).
● As Mutual fund Equity schemes fall down by 60% and steady increase in redemption of
Rs 11397crore in January 2019 and the Balance funds also have negative returns as
compared to past year which shows poor performance in this sector.
● Retail investor is yet to give up on mutual funds.
● Securities and Exchange Board of India (SEBI) over the past year had tightened rule on
commission in mutual funds. Now SEBI had banned upfront commissions in mutual funds
and introduced an “all-trail model” which had impact on mutual funds market.
● Mutual fund also operates in numerous countries so it has to make policies. Each country
based on the finance & accounting industry. Recent rise in populism across the world
mutual fund lead to greater instability in its existing market.
● Mutual fund has benefitted from lower taxation policies in the budget2019. It has resulted
in high profits and increasing spending in the research and development. Finance minister
brought cheers to mutual fund industry. Mutual fund industry preferred to overlook the
 setback on LTCG tax and focused on income tax sops as they believe the industry stands
to gain from it .The industry believes that taxpayers would invest more.
● Investors are really concerned about election. What will be the impact of election on there
mutual fund investments. Should they make changes in mutual fund investment or what
should be there investment strategy .
● Elections are temporary act they are not for long term so investor need not be worry or
change their strategy. Investors must follow a disciplined approach and stick to their asset
allocation. Due to high volatility not to invest in lump sum.

Economic factors

Economic factors have a significant impact on how an organisation does business and also how
profitable they are. Various economic factors need to be taken into account when determining the
current and expected future value of business or investment portfolio. Factors include economic
growth, interest rates , exchange rates, inflation and so on..

● Interest rate has a significant effects on the world economy. Rising rate will also have
impact on US dollar, commodity prices, corporate earnings and the stock market
.Significant emerging economies like India have cut their own interest rates to gain back
the momentum . This will have counterbalancing effect on rising interest rates.
● Inflation means decline in the real value of money and a loss of purchasing power in the
means of exchange which is also the monetary unit of accounts. So most of the people
invest in mutual fund is to keep their savings safe from the effects of inflations.
● Exchange rate movements are a reflection of short term economic conditions and can occur
because of a number of different factors.
● The balance of trade between imports and exports can impact the supply and demand for
currencies. If the overall pricing of exports rises faster than the pricing of imports it can
result in greater value for its currency as well.
● High level of government debt can have a negative impact on a country’s exchange rate. A
debt can create the perception that the country is in poor financial shape and has the
potential of defaulting if it accumulates debt that it can’t pay off.

Social factors
Socio-culture factors involve the shared belief and attitudes of the population.Factors include
population growth, age distribution, career attitude and so on. Every companies include an
examination of the socio-cultural environment prior to entering their target markets.
● Consumer attitude toward mutual fund is to earn good return with comparatively low risk.
● People are always ready to invest in LIC, FD because they think it is more safety than
mutual funds.
● Changing lifestyle of the people also affect the mutual fund industry. People are demanding
high returns with low risk. They are investing more in Gold ,Real-estate as compared to
mutual fund.
● As per the demographic no significant difference between males and females in their choice
of investments and also any gender, age group, occupation, can invest in mutual funds.
● Media coverage play an important role toward influencing people .Media has a both
positive and negative impact which effects investors attention and learning..Both
traditional and social media are rapidly growing. Mutual fund can leverage this trend to
build efficient marketing network.

Technology factors-

Technology that may affect the operations of the industry and the market favourably or
unfavourably. Factor include ( innovation , research and development for producing goods and
services or Distributing goods and services.)

● Due to technology both investors and distributors will have benefits .People can do KYC
online and for redemption they don’t need to submit forms offline which can save time of
investors. They can simply ask their distributor to put redemption request. Distributor can
put online requests by BSE star MF website.
 ● Mutual funds will increase exponentially across the country if E-commerce platforms
receive permission to sell mutual funds.
● In December 2015, SEBI chairman U.K.Sinha mentioned that the sale of Mutual Fund units
on E-commerce platforms could become effective soon.BEF (India Brand Equity
foundation) found that there are1-1.2 million transaction per day in E-commerce retailing.
Mutual Funds can benefit from these platforms.
● Many fund houses are using social media holistically to create awareness about their
products and services, engage with clients, resolve their queries and understand investor
needs
● Using big data analytics mutual funds can statistically analyse the actions of investors. The
big technology companies are using data to increase sales. This will help Mutual Fund
industry to get deeper insights on the investor behaviour and devise new strategies and
offer customised investment solutions to different investors using big data analytics.

Environmental Factors-
Environmental factors become important due to the increasing scarcity of raw materials, pollution
targets and carbon footprint targets set by government. Factors includes ecological and
environmental aspects such as weather, climate which may affect industries such as
tourism, farming, agriculture and insurance.

● In a last five years from paper work, Industry associations such as AMFI and stock
exchange have developed online platforms. Mutual fund industry can comfortably do the
 entire transaction chain from receiving money to investing and back to redeeming it
everything on technology platform.
● The Mutual Fund industry has launched ESG funds(Environmental, Social, Governance
focused fund)
● ESG funds focus on non-financial factors of a company and invest in stocks of companies
that have no evidence on any harmful environmental impact or any social risk are
committed to corporate social responsibility (CSR) and do not have harmful relationship
with stakeholder and the society at large.
● SBI was first to launch SBI equity ESG mutual Fund in India. After repositioning an ECG
fund there has been a change in the investment process which involves exclusion of certain
sectors.
● First time investors or who has stayed in the market for long can invest in ESG fund.ESG
funds will be taxed as your regular equity investment-LTCG tax at 10%.
● ESG funds are slightly risky because of the stricter compliance parameters.
● Mutual Fund industry give generously to support environmental organizations and projects
in cities and town across the country

Legal factors-
Factors include any changes in laws and legislation, health and safety guidelines consumer rights,
ethical standards .If an organisation trades globally this become especially tricky since each
country has its own set of rules and regulations.
● Securities and Exchange Board of India ( SEBI) has laid down rules on Mutual Fund
three categories. Large cap,Mid-Cap, Small Cap. There has been confusion about what
an investor is really buying. As per Rule Large cap fund can buy stocks of firms that
 sit in the bucket containing the top 100 stocks by market cap. Mid Cap fund fall between
101st and 250th and small cap fund have market cap from the 251st company onwards.
● A tax rate of 20% is charged on the debt funds of long term capital gain .
● Mutual Fund Deduct Securities Transaction Tax (STT) on equity funds and Hybrid
funds. Deduction is performed at the rate of 0.001%.
● SEBI latest changes will have a significant impact on India Rs25.93 trillion mutual fund
industry which has to comply with the new sectoral caps from September 2020

3.2 PORTER’S FIVE FACTOR MODEL

Porter's Five Forces is a business analysis model that helps to explain why different industries are
able to sustain different levels of profitability. The model was published in Michael E. Porter's
book, "Competitive Strategy: Techniques for Analyzing Industries and Competitors" in 1980. The
model is widely used to analyze the industry structure of a company as well as its corporate
strategy. Porter identified five undeniable forces that play a part in shaping every market and
industry in the world. The forces are frequently used to measure competition intensity,
attractiveness, and profitability of an industry or market. These forces are:
Competitive rivalry
A company must be always aware of their competitor strategy. They should always give better
product and services such has better guidance about each scheme of Mutual Fund which
gives maximum return for a long period of time , than competitor to stay in the market
.When a competitor rivalry is low a company has greater power to achieve higher sales and
profit.

Threat of new entrants

A company power is always affected by the force of new entrants into its market. New entrants
are Product differentiation, Government policies, Brand loyalty, Access to latest
technology .Customers always prefer to invest their money in safety scheme rather than
risk scheme that can affect the company growth. So company should innovate new
products and services the company should offer solutions instead of products. .Answering
investor’s queries and suggesting solutions to their savings and investment problem .

Substitute Product

Companies that produce goods or services for which there are no close substitutes will have more
power to increase their sales and profit. When close substitutes are available, customers
will have the option to forgo buying a company's product and services,
Threat of substitute products or services arises when customer can easily switch to alternative
products .

Bargaining power of buyer

Bargaining power of buyers in an industry affects the competitive environment for seller’s ability
to achieve profitability. Strong buyers can pressure sellers to lower prices, improve product
quality, and offer more and better services. Low buyer bargaining power makes an industry
more attractive and increases profit potential for the seller.
Supplier power
The bargaining power of the supplier in an industry affects the competitive environment for the
buyer and influences the buyers ability to achieve profitability. Strong suppliers can
pressure buyers by raising prices, lowering product quality, and reducing product
availability. .

4.COMPANY ANALYSIS

4.1 SWOT

The SWOT Analysis examine the environment of the organisation as internal and external is an
important part of planning process. Internal factors usually classified as strength or weakness and
External factors opportunities or Threat. SWOT analysis provides information that is helpful for
organisation to maximize their strengths, minimize their weakness, take advantage of their
opportunities and overcome their weakness.

Following is the SWOT Analysis for Nirmal Bang Brokerage Firm

Strengths:

● Nirmal Bang is one of the leading stock brokerage comapny in India

● Company has good financial advisor in term of guiding investors toward right investments.
● Company always identify investors financial goals and risk tolerance and help to achieve
their goals.
● Nirmal Bang staff is experienced and Harworking.
● Nirmal Bang professional keeps continuous communication and delegation with investors
via Calls, Email and provide services throughout the year.
● The research analysts appear on leading business news channels where they share their
insights on the market.

Weakness;
 ● Nirmal Bang lacks in Marketing and Advertising Strategy.
● Nirmal Bang has huge competition in the markets .Competitors are Angel brokering,
Motilal Oswal, ICICI securities.
● Nirmal Bang has no presence in rural area ./Nirmal Bang has only presence in Metro cities.
● Convincing efforts are less toward investors.
● Technology wise they are lacking they do not have fast online services.
● Nirmal Bang is a full services broker so the brokerage charged by them is higher than the
discount brokers.

Opportunities;

● Nirmal Bang have presence in 26 state of the country, so company has good opportunity
to extend its branches all over the country.
● Company has not come yet with its own IPO. This is good chance for the company to be
public limited company which will help company to get money created brand awareness
in this market.
● Beside offline services they should also concentrate on online services for attracting more
investors.
● Greater scope for strategic alliance due to strong financial position. Strategic alliances
allow two organizations to work toward common or correlating goals.

Threats

● In India People mostly do investment in Gold, FD, and LIC as compare to Stock market.
● Competition has already increase in brokerage firm which can affect Nirmal Bang.
Competitor are Angel brokering, Motilal Oswal, ICICI securities they are also offer same
services to customers.
● Nirmal Bang is not able to expand their technology in brokerage firm as compare to Angel
brokering.
4.2 MCKINSEY’S 7S MODEL
Mckinsey 7s model is a tool that analyses firm’s organizational design by looking at
7 keys internal elements( structure, strategy, system, shared values, skills, style, staff) in order to
identify if they are effectively aligned and allow organization to achieve its objectives.

Strategy-

Nirmal Bang internal control play a major role in determining business strategies as well as day to
day operation of the group. They Create an opportunities, add values ,and transform visions into
reality.As per Nirmal Bang services is essential for delivering solutions and maintaining
relationship with investors .Professionals are always on call simply to help the investors to
maximize their retruns.

Structure

Nirmal Bang handles commodity trading facilities as well as currency derivatives and wide range
of financial services. Nirmal Bang teams are Fundamental Researchers, Technical analysts,
Management philosophy, Human Resources. Company provides the framework relationship
among different parts of organizations. Nirmal Bang Decision making are centralized.

Systems

Nirmal Bang senior research analysts who have more than 15 years of experience run the
organization systematically. Work done by the employees are accurate, with speed,and on time
Document Storage are also systematic..All branches are connected through Wide Area Network
and are served by centralized back office which enable clients to obtain up to date information’s.

Shared Values
Nirmal Bang Core Value is Respect our colleagues and the business itself. Nirmal Bang culture is
to maintain standards at all times and lay emphasis on honesty ,integrity and confidentiality. They
act to ensure transparency at all levels and in everything they do.

Style

Nirmal Bang have developed a strong and enduring team by recruiting graduates ,postgraduates
,accountants. Team work together to provide superior results, working towards a common goal.

Staff

Nirmal Bang Human Resources are the key to service. They have a strong and vibrant workforce
in every field and activity like research, system, accounts, marketing, networking. They have
professional qualified team like CA, MBA, Engineers.

Skills

Nirmal Bang team has significant experience in securities trading, market structure, trading
technology, portfolio management. They also have skill like initial trade, investment into
collaborative, person to person relationship that keeps delivering true added value.
4.3 BCG MATRIX
BCG Matrix is developed by Bruce Henderson of the Boston Consulting Group in the early 1970’s
.According to this technique, business or products are classified as low or high performance
depending upon their market growth rate & relative market share.

BCG matrix consist of four elements

▪ STARS
▪ QUESTION MARKS
▪ CASH COW
▪ DOGS
STAR
Nirmal bang mainly do business in Mutual Funds. They are stars in this market because they have
high market growth rate and relatively high market shares in Mutual Fund Segments. They
get large number of clients in systematic investment plan (SIP) and also in Systematic
withdrawal plan(SWP) and in many othere scheme of Mutual Funds.
They get more number of cash from Mutual funds segments.

QUESTION MARK
Nirmal Bang do business in Demat accounts Segments. They have high market growth but low
market share in Demat accounts .They generate less number of cash from a Demat accounts
segments.

CASH COW
Nirmal Bang offer clients commodity Trading in the commodity markets involving metals, oil,
crude etc. These are the product that they have high market shares but low growth in these
segments.

DOGS

Nirmal Bang is also distributor of life insurance, general insurance, health insurance and term
plan. They have low market share and low market growth in the insurance segments. They have
very low amount of cash in these segment.

PART-B

5.1 OBJECTIVES

● To study brief idea about Mutual Fund available in India

● To study some of the Mutual Fund schemes
● To study about tax benefits and returns of the Mutual Funds

5.2 EXPECTED BENEFITS

Expected benefits are as follow-

● Accessibility - Mutual Funds are easy to buy. Mutual Funds are offered at brokerage
firms, discount brokers online, mutual fund companies, banks, and insurance companies.
Even beginning investors can easily open an account at a no-load mutual fund company,
such as vanguard investments, and open an account within minutes.
● Variety- Mutual Funds come in many different categories and types. Investors can invest
in mutual fund that cover the main asset classes (stocks, bonds, cash) and various sub
categories into specialized area, such as sector funds or precious metals funds.
● Affordability- Mutual Funds have low minimums. Investor can invest in systematic
investment program, where they have a fixed amount or fixed number of shares
purchased once per months.
● Professional Management- Mutual Fund has a team of professionals researching and
analyzing Investments. Greatest benefits of mutual funds is that investors can save
 countless hours of time ,energy and frustration involved with the research and analysis
required to find quality investment to hold in a portfolio.
● Flexibility-Benefits’ of Mutual Funds overlaps into simplicity and flexibility ,Investor
can invest in just one fund or invest in a wide variety. Automatic deposit, systematic
withdrawal, short term saving.

5.3 LIMITATION

Apart from Details about mutual funds it has some limitations due to that all details could not be
published & displayed. It has been done on the basis of secondary sources like Journals, Website.

● Analysis which done on Mutual Fund industry is limited to the availability of data.
● Time constraints- Due to shortage or less availability of time it may be possible that all the
related & concerned aspects may not be covered in the project.
● Selection of the schemes for the study is very difficult task because there is wide variety of
schemes in each selected category. So the study is restricted to the selected schemes.
● The Mutual Fund industry is growing very fast and new development take place almost
every day .It is difficult thus to incorporate the latest data in the study as every day the data
changes.

6. METHODOLOGY

In a Competitive market there are multiple Mutual Funds working in Indian market. It is necessary
to know Mutual Fund .As the performance of the Mutual Fund decides the Future of Mutual Fund
Company.

Information collected in this project are base on Primary by the way of interview with proprietor
of Nirmal Bang and secondary data that are taken from Newspaper like Economics Times, Live
mint, Time Of India Website like Mutual Fund India, Money control, SEBI ,IBEF . Information
collected are based on Mutual funds Schemes and Mutual Funds Returns, Investments.
Brief idea about Mutual Fund available in India

The Mutual fund industry was introduced in India in 1963 with the formation of Unit Trust Of
India, at the initiative of the Government of India and Reserve Bank Of India. One of the first
Mutual Fund scheme launched by UTI in 1964 was Unit Scheme . At the end of 1988 UTI had
Rs 6700crores of assets under managements .In 1978, UTI was de-linked from RBI and the
Industrial Development Bank of India(IDBI) took over the regulatory and administrative control
in place of RBI.

The year 1987 marked the entry of Public Sector Mutual Funds set up by Public Sector Bank and
Life Insurance Corporation of India(LIC) and General Insurance Corporation of India(GIC). In
June 1987,SBI Mutual Fund became the first non-UTI mutual fund in India. It was followed by
Canbank Mutual fund (Dec 1987),Punjab National bank Mutual Fund9 Aug1989),Indian Bank
Mutual Fund(Nov 1989),Bank of India(June 1990),Bank of Baroda Mutual Fund ( Oct 1992).Life
Insurance Corporation (LIC) established its Mutual Fund in June 1989 while General Insurance
Corporation ( GIC) had set up its Mutual Fund in December 1990.

1993 was a new era in the Mutual Fund industry giving the Indian investors a wider choice of fund
families. This was marked by the entry of Private Companies in the sector .After the Securities
and Exchange Board of India ( SEBI) Act was passed in 1992,the SEBI Mutual Fund Regulations
came into being in 1996.Since then the Mutual Fund companies have continued to grow
exponentially with foreign institutions setting shop in India, Through joint ventures and
acquisitions. At the end of 1993 the Mutual Fund Industry had assets under management of Rs
47004 crores.
As the industry expanded , a non-profit organization, the Association Of Mutual Funds in India

( AMFI) was established on 1995.Its objectives is to promote healthy and ethical marketing
practices in the Indian Mutual Fund Industry .SEBI has made AMFI certification mandatory for
all those engaged in selling or marketing Mutual Fund products.

The objectives of Association of Mutual Funds in India

● The Mutual Fund Association of India maintains high professional and ethical standards in
all area of operation of the industry.
● It also recommends and promotes the top class business practices and code of conduct
which is followed by members and related people engaged in the activities of mutual fund
and asset management including agencies connected or involved in the field of capital
markets and financial services.
● To interact with Securities and Exchange Board of India ( SEBI) and to represent the SEBI
on all matters concerning the Mutual Fund Industry.
● To represent to the Government, Reserve Bank of India and Other bodies on all matters
relating to the Mutual Fund Industry
● To undertake nationwide investor awareness programme so as to promote proper
undertaking of the concept and working of Mutual Funds.
● To protect Interest of Investor/Unit Holder

In February 2003 The Unit Trust of India Act 1963 UTI was bifurcated into two separate entities.
One is the Specified Undertaking of the Unit trust of India .The Specified Undertaking of Unit
Trust of India, functioning under an administrator and under the rules framed by government of
India and does not come under the purview of Mutual Fund Regulations.

The second is the UTI Mutual Fund, sponsored by SBI,PNB,BOB and LIC .It is registered with
SEBI and Functions under the Mutual Fund Regulations.
Advantages of Mutual Funds

● Diversification-book Mutual Funds have their own share of risk as their performance is
based on the market movement. The fund manger always invests in more than one assets
class (equities, debts,money market instruments )to spread the risk. One asset class doesn’t
perform, the other can compensate with higher returns to avoid the loss for investors.
● Expert Management- Mutual Fund is favoured because it doesn’t require the investors to
do research and asset allocation. A fund manger takes care of it all and make decisions on
what to do with investment. They decides whether to invest in equities or debt also decide
on whether to hold them or not and for how long.
● Less cost for bulk transactions-There is always price drop with increased volume when
investors buy any product. If investors buy multiple units at a time, the processing fees
and other commission charges will be less compared to when they buy one units.
● Invest in Smaller denominations-By investing in smaller denominations like Systematic
investment plan( SIP) investors get exposure to the entire stock .This reduces the average
transactional expenses ,investors benefit from the market lows and highs. Regular
investments as opposed to lump sum investments give investors the benefit of rupee-cost
averaging.
● Cost efficiency-Investor can check the expenses ratio of different Mutual Funds and
choose one that fits in their budget and financial goals. Expense ratio is the fee for
managing investor’s fund. It is useful tool to assess a Mutual Fund performance.
● Tax-efficiency-Investors can invest up to Rs 1.5 lakhs in tax saving Mutual funds
mentioned under 80C tax deductions. ELSS is an example .Though a 10% Long Term
 Capital Gains(LTCG) is applicable for returns in excess of Rs 1 lakh after one year. they
have consistently delivered higher returns than other tax-saving instruments like FD .

Disadvantages of Mutual Funds.

● Costs to manage the Mutual Fund- The salary of the market analysts and fund manger
basically comes from investors. Total Fund management charge is one of the main
parameters to consider when choosing a Mutual Fund. Greater management fees do not
guarantee better fund performance.
● Lock in periods-Many Mutual Funds has long term lock in period, ranging from 5 to 8
years. Exiting such funds before maturity can be an expensive affairs. A certain portion of
the fund is always kept in cash to pay out an investor who wants to exit fund. This portion
in cash cannot earn interest for investors.
● Dilution-While diversification investors risk of loss ,it can also dilute investors profits.
Hence investors should not invest in more than 7-9 Mutual Funds at a time.
● No control over Investment-Investors have absolutely no control over what the Fund
manger does with their money. They cant advise Fund manager on how their money should
get invested.
● Index Does Better-In some cases, the stock Index may outperform the Mutual Fund. This
is not always the case as it depends in large part on the Mutual Fund the investors has
invested in as well as the skill set of fund mangers. Therefore it is a good idea to do research
before investing in fund.
● Profitability of High returns reduced significantly-A Mutual Fund contains a diversified
basket of securities. If a single security outperforms by a significant margin the impact will
be limited. Investors should not expect that their investment to grow and give them profit
over night. There will also be downward fall in the limits of the fund.
7. OBSERVATIONS

7.1 CLASSIFICATIONS OF OBERSAVATION

7.1.1 ABOUT ORGANIZATION TRANING

Nirmal Bang Gave me short explanation on Shares, Stock market, Compounding Interest in Mutual
fund, Initial Public offer ,Large cap, Mid Cap ,Small cap, Multi-cap and give me training on what
are Mutual Funds , Basics of Mutual funds Investment, Most Popular Mutual funds Investment
plans.

Mutual Funds

Mutual Fund is long term Benefit plan with low risk. Mutual Fund refers to a pool of money
collected by various investors who intend to save and make money through their investment.
Investment in different asset classes, namely liquid assets, debt funds, bonds, stock. Professional
money managers known as the fund managers operate Mutual Funds. The portfolio of Mutual
Funds is structure and designed to match the financial goals mentioned in the prospectus and the
fund managers ensure to maintain these standards.

Mutual Funds are registered with Securities and Exchange Board of India (SEBI).SEBI is
responsible for regulating security markets prior to the accumulation of the funds from the
investors .Making investment in Mutual Funds can be as simple purchasing or selling stocks or
bonds online. In additions the investors can also sell out their shares whenever they want or need.

Stock Market
Stock Market is a place where shares of public listed companies are traded. The primary market is
where companies float shares to general public in an initial public offering ( IPO) to raise capital

Shares

A unit of ownership that represents an equal proportion of a company’s capital. It entitles its holder
(the shareholder)to an equal claim on the company profits and an equal obligation for the
company’s debts and losses.

Compound Interest in Mutual fund

Compounding is simply the interest earned on interest. This earning on the interest leads to
substantial growth in investments and savings.

Mutual funds are designed in such a manner that they harness the power of compounding. Investors
make gain when the value of each unit of investment goes up. When they make investments over
a long period of time, the benefit of compounding helps to grow their investment.

Initial public offering

Initial public offering is the process by which a private company can go public by sale of its stocks
to general public. It could be a new, young company or an old company which decides to be listed
on an exchange and hence goes public.

Large cap, Mid cap, Small cap Funds

In India SEBI has laid out clearly defined conditions for Mutual Funds to be categorised as Large
Cap, Mid Cap, Small cap Funds.

Large Cap-If invests in companies ranked 1st -100th in terms of full market capitalization. Large
cap companies tend to be trustworthy ,reputable and have a well established track record .Large
cap mutual funds have strong corporate governance practices and typically have reputation for
slow but steady wealth generation for their investors.
Small cap-If invests in companies ranked 251th and beyond in terms of full market capitalization.
Small Cap companies tend to have high growth potential as they are usually young with an outlook
for aggressive expansion. Investor having an appetite for higher risk and expectation of higher
return can invest in small cap funds.

Mid Cap-If invests in companies ranked 101st -250th in terms of full market capitalization. Mid cap
companies tend to have lower volatility than small-cap funds but more than large cap ones. On the
other hand, they show higher growth potential than large cap mutual funds

Basics of a Mutual Funds Investment

Mutual Funds investment pool investors and make use of that money to purchase other securities
basically bonds and stocks. Mutual Fund Company’s values depends on the performance of
securities it decides to purchase. Making investment in a share of a Mutual Fund is quite different
from making investment in shares of stocks. Different from stocks, Mutual Funds shares don’t
give voting rights to its holders. A share of Mutual Fund represents investments in various stocks
or other securities despite just single holding.

Systematic Investment Plan( SIP)

SIP is an investment route offered by Mutual Funds wherein one can invest a fixed amount in a
Mutual Fund Scheme at regular intervals –say once a month or once a quarter instead of making a
lum sum investment. The instalment amount could be as little as INR 500 amount and is similar
to a recurring deposit.SIP has been gaining popularity among Indian Mutual Funds investors, as it
helps in investing in a disciplined manner without worrying about market volatility and timing the
market.

SIP offered by Mutual Funds are easily the best way to enter the world of investments for long the
long term, which means that start investing early in order to maximize the end returns.

Systematic Withdrawal Plan

Some people invest in Mutual funds for a regular income, and they usually look at options of
getting a dividend. Thus many schemes, especially debt oriented schemes, have monthly or
quarterly dividend options. It is important to note that dividends are distributed from the profits or
gains made by the scheme and are in no way guaranteed every month.There is another method to
get a monthly income using SWP here you need to invest in the growth plan of a scheme and
specify a certain fixed amount required as a monthly payout.SWP is mostv commonly used for
retirement.

Top Mutual Funds Investment plans

The best mutual funds in India 2019 are as follow

ICICI Prudential Bluechip fund Growth

SBI Bluechip fund Growth

Aditya Birla Sun Life Tax Relief 96 Growth

ICICI Prudential Equity & Debt Fund Growth

SBI Magnum Muti Cap Fund Growth

Motilal Oswal Multicap 35 fund Regular Growth

L&T tax Advantages Fund Growth

L&T India value Fund Growth

Types of Mutual Funds

7.1.2ABOUT SELF LEARNING

I had done my summer internship with Nirmal Bang . Nirmal Bang gave me training program
regarding Mutual Funds, Basic Knowledge about Shares, Stock Market and how financial services
given to the client. In this program they told me how Mutual Funds are beneficial for long term
investment plan. I learned what are the benefits of Systematic Investment Plan (SIP) & Systematic
Withdrawal plan (SWP) to explain client.

9. CONCLUSION

9.1 TREND IN ORGANIZATION

9.2 SUMMARRY OF FEEDBACK GIVEN TO THE ORGANIZATION

Technology play a very important role as every major document is produced on the computer
which is required in the Nirmal Bang. Nirmal Bang should update their website at least once in a
week so that clients will get the information promptly.

9.3 SUMMARY OF SELF LEARNING

From Nirmal Bang I learned that .Start Early, Invest Regularly to get the best out of your
investments. As The investor always tries to maximize the returns and minimize the risk. Mutual
funds satisfy theses requirements by providing attractive returns with affordable risk. Mutual Fund
Returns are compared on the basis of performance of the stock market. If the stock market do well
than the fund in which investors have invest will do well. The fund industry has already overtaken
the banking industry, more funds being under mutual fund management than deposited with banks.
With the emergence of tough competition in this sector
PART C

Learning and Takeaways

1. Application of Concepts ,tool, techniques and skill learnt at PIMSR.

PIMSR thought us what are the key factors influencing an organisation from outside and how the
organisation use strategic planning method to reduce their threats.

The tools learned are as follows

PESTEL Analysis, SWOT Analysis, Porter’s Five Forces model, 7’s McKinney’s, BCG
Matrix.

● PESTEL Analysis –From PESTEL I learn that how current external factors like political,
economic, social, technological, environmental and legal factors are affecting the
organization. And how company look for solutions to the problems, marketing strategies,
development and how they can get ahead of their competition.

● SWOT Analysis - From SWOT I learn that how company improve internally, and
developed strategic plans or new idea by using internal and external data like Strengths,
Weaknesses, Opportunities and Threats.

● Porter’s Five Forces –From Five Porter’s I learn that how organisation keep a close watch
on their rivals and examine what factors could impact their business environment and
profitability.

● 7’s McKinney’s- From 7’s McKinney’s I learn that in order to be successful it is useful for
every organization to have good understanding of the internal organizations and to find out
how work can be done more effectively and efficiently.
 ● BCG Matrix- BCG Matrix help me to understand the firm market share and market growth
in various products.

2. Mention new knowledge, tool, techniques, or skills that you have may have picked up
● From Nirmal Bang I learn Leadership skill. The qualities that i learn are sincerity , total
devotion toward work and think big and encourage others to do likewise .If organization
wants to make more profit with available resources they need person with great leadership.
● Almost employees are friendly in nature, They all are multi-taking can perform more than
one task but at different time.
● Team Management is so good in Nirmal Bang that no one need any supervision on their
work. Each person is assign with job which he/she can perform well.

3.Any directions for the future learning or career path that you may like to purse.

Nirmal Bang is still on growing stage, working with such firm for 2 months was a great experience,
while working with Nirmal Bang I got the knowledge about Mutual Fund market and how its work.
Firm increases its business by giving prompt services to their clients and which is the major
advantage for any kind of Brokerage firm. Nirmal Bang arranges various training sections for us
to understand about Mutual Funds and Its benefits’. Learned how to convince and create awareness
among people to invest in mutual fund for their long term benefits.
www.NirmalBang

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