THE SUMMER INTERNSHIP PROJECT REPORT

ON

“INVESTMENT PATTERN ON THE BASIS OF RISK PROFILE OF INVESTORS”

OF

MARWADI SHARES AND FINANCE LTD.

PREPARED BY

AKASH MAKWANA - 177730592067

SEMESTER – III

MBA BATCH -2017-19

UNDER THE GUIDANCE OF

Assi. Prof. KOMAL PATEL

ACEDAMIC YEAR

2017-19

SUBMITTED TO

SUNSHINE GROUP OF INSTITUTIONS

FACULTY OF MBA

RAJKOT

AFFILIATED TO
GUJARAT TECHNOLOGICAL UNIVERSITY

AHMEDABAD

1
CERTIFICATE OF COLLEGE

2
CERTIFICATE OF COMPANY

3
4
 DECLARATION

I undersigned AKASH MAKWANA a student of SHRI SUNSHINE GROUP OF

INSTITUTIONS, MBA 3rd semester, declare that summer internship project titled
“Investment Pattern on the Basis of Risk Profile Investors” AT
MARWADI SHARES AND FINANCE LTD. is a result of my own work and my
indebtedness to other work publications, references, if any, have been duly acknowledged.
If I am found guilty of copying any other report or published information and showing as
my original work, I understand that I shall be liable and punishable by Institute or
University, which may include “Fail” in examination, “Repeat study & re submission of the
report” or any other punishment that Institute or University may decide.

Name of Student: AKASH MAKWANA

Enrollment Number: 167730592067

Signature:

5
 ACKNOWLEDGEMENT

My debts are many and I acknowledge them with much pride and delight. I am thankful to
the management of MARWADI SHARES & FINANCE LTD., RAJKOT which
permitted me for doing the grand project within, an exposure of functioning of giant
corporate for the 45 days. I would like to thank Mr. Ketan -Marwadi, Mr. Deven
Marwadi and Mr. Sandeep Marwadi for giving this opportunity to undergo training at
their organization.

I would like to express my sincere thanks to Mr. Jitendra Tank, Mr. Hardik Kikani my
Project Guide – Marwadi Shares & Finance Ltd -Rajkot, for his valuable suggestions and
guidance for this project work.

I would also like to express my deepest sense of gratitude to Prof. Dr. Vikas Arora
(Director and Integrated Campus), Miss. Khushbu Dave (Assi. Professor and
Head of the Department) and Miss Komal Patel (Assi. Professor) for providing me
an opportunity to undertake this project work. I am extremely grateful for her invaluable
help and guidance throughout my work. He kindly evinced keen interest in my work and
furnished some useful comments, which could enrich the work substantially.

In fact it is very difficult to acknowledge all the names and nature of help and
encouragement. I never forget the help and facility provide directly or indirectly to me by
all.

Last but not least, I would like to thank all my friends and staff members at company.

Akash Makwana

6
 PREFACE

Summer Internship is an academic part of MBA, which is very helpful in getting

practical knowledge in this increasingly globalizing world. With the help of this training, I
came to known how to apply theoretical knowledge in practice. This research provide the
opportunity to demonstrate the application of knowledge and skills required at the time of
training, to evaluate the performance and to provide feasible recommendation on the
provide feasible recommendation on the provide data.

The analysis is on the field of marketing on the topic of “Investment pattern on the basis of
the risk profile the investors.”

I hereby thank to Sunshine group of institute for giving opportunity at Marwadi Shares &
Finance ltd

I have tried my level to prepare this report and I assure that all the information in this report
is authentic and accurate.

7
 EXECUTIVE SUMMARY

The report consists of the details on “Marwadi Shares and Finance Ltd”. People invest their
money for good return but with good returns their also comes a good amount of risk.
Investors have different risk taking abilities. When it comes to investing it is important to
consider the investor’s risk profile or tolerance carefully.

The risk profile of investors depends upon their demographic structures or characteristics.
The project deals with the analyzing the investment pattern on the basis of risk profile of
investors.

As we all know that every person who wants to gain better returns in future they must
invest their money in stock market or anywhere else. This study describes the investment
pattern use by different persons while doing investment.

The main reason to choose this research is to find out the investment pattern behavior in
respect of their risk bearing capacity and this research helps the company to target the
investors according to their risk ability.

The quantitative research will be carried out with the help of questionnaire.

8
 Tables of Content

Chapter No Particular Page No.

Declaration 5
Acknowledgement 6
Preface 7
Executive Summary 8

I - General Information
1 Brokerage Industry 11
2 World market 13
3 Indian market 14
4 About major companies in industries 15
5 Company profile 17

II- Primary Study

6 6.1 Literature review 35
6.2 Background of the study 37
6.3 Problem statement 37
6.4 Objectives of the study 37

7 Research Methodology
7.1 Research Design 38
7.2 Source of data 38

9
 7.3 Data Collection method 38
7.4 Population 38
7.5 Sample size 38
7.6 Sampling method 38
7.7 Data collection instrument 38

8 Data analysis and interpretation 39

9 Findings and result 57
10 Limitation of the study 57
11 Annexure 58
12 Sources 62
13 Bibliography 63

10
 ABOUT THE BROKERAGE INDUSTRY

The brokerage firm’s basic function is to facilitate the buying and selling of the securities
between buyer and seller. Brokerage firm serves investors who do trade in public stock and
other securities. Depending on the level of service brokerage firm may also offer financial
advice and other resources which are specifically designed to meet the needs of an investor.

There are various types of brokerage firm. Based on the need and financial goals the
investor should wisely choose brokerage firm.

Types of Brokerage firm

1) Captive Brokers

When investors are interested in mutual funds than this type of brokerage firm are relevant.
These are the firm who owns the part of the mutual fund company so they are inclined to
sell their fund only rather than encouraging other company’s fund.

2) Independent Brokers

Unlike captive brokers, independent brokerage firms are not connected to any mutual
fund company nor are they part of a chain brokerage. Typically, the independent will
be more forthcoming with advice that suits your needs rather than catering to their own
interests.

11
3) Full Service brokerage firms

It offers professional advice to help investors in understanding investment option.

Using full service will cost much more to the investor but at the same time will
provide service higher than other type of brokerage firm.it provides the tools and
resources that are necessary for financial choices.

4) Discount service brokerage firms

This type of firm provides service that deals only with the trading aspect of
managing investment of the customers. Their service is less costly than the full
service brokerage firms.

5) Deep discount brokerage firms

The service of this type of firm is even less costly than of the discount service
brokerage firms. This type of firm deals only in specific aspect of investing,
specializing in one area of trading.

6) Online discount brokerage firms

This brokerage firms work online and are much like deep discount brokerage firms
but in online discount brokerage firms, their investment resource and support is
available only for online trading. Their costs are typically low

12
 2. WORLD MARKET

The First stock brokerage house was started in United State in Philadelphia in 1800. The
Philadelphia was the first organized body that brought all the brokers together and served to
codify the rules and regulations under which business has been conducted.

In 1929,the first major negative event occurred when the stock market crashed, which was
followed by great depression. The result of crash was due to investor who had borrowed
heavily to purchase stock and began to realize that they were hugely overvalued and
attempted to sell them off, resulting in a panic.

During the 1900s, stock brokerage firms began to move in a directing of market makers.
They adopted the policy of quoting both the buying and selling price of a security. This
allows a firm to make a profit from establishing the immediate sale and purchase price to
an investor. The conflict with brokerage firms setting prices creates the concern that insider
trading can result from the sharing of information.

The creation of high valued brokerage firm like Goldman sache and bear sterns creates a
system of consolidation. Working with hundreds of billions of dollars, the larger firms
began to merge and take over smaller firms in the last half of the 20 th century. Firms like smith
Barney were acquired by Citi group and other Investment banks, creating massive financial
institution that valued, held, sold, insured and invested in securities.

13
 3. ABOUT THE INDIAN MARKET

In India the stock broking function started in the year 1875. BSE is the oldest stock broking
of India. BSE got a permanent acknowledgement from the Government in the year 1965
which was most required. The National Stock Exchange (NSE) arrives after the Bombay
Stock Exchange (BSE).

Indian stock market history is same as that of the BSE. An upbeat mood of the Marketplace
was lost abruptly with Harshad Mehta scam .Harshad Mehta, who is also called as big-
bull and giant of Indian stock market, who diverted huge fund from banks by fraudulent
means. He also played millions of shares of many companies. For preventing such frauds,
Government formed SEBI, through act in 1992.

The SEBI is statutory body which regulates and control functioning of brokers, stock
exchanges, portfolio manager investment advisor, sub-broker, ect. SEBI obliged several
though measure to protect interest of investor.

India, after US hosts the large number of the listed companies. The global Investors now
seal India as preferred location for the investment. Stock market now also appeals to the
middle class Indians. Most of the Indian working in foreign country now diverts their
savings to the stocks. This new phenomenon is the result of diminished interest rate from
banks.

For any company to raise finance, stock market is the most important source. If the
company wants to expand itself and has scarce of resources so than it can get itself listed in
the stock exchange through IPO. IPO is an Initial Public Offering which is offered to the
customer when the company is listed its self for the first time in the stock market.

Share price also affect the wealth of household and its consumption. Therefore, reserve
bank of India tends to keep eye on the control and behavior of the stock market and in
general, on the smooth operation of financial system function. Main aim of creating RBI is
smooth flow of finance.

14
 POPULAR COMPANIES IN BROKING INDUSTRY

Share khan was incorporated in February, 2000 by Mumbai-based entrepreneur Shripal

Morakhia. They are the service broker and provides many other facilities like portfolio
management, Dial-n-trade, commodities trading etc. BNP Paribas took over share khan for
Rs 2500 crore in October 2017. (Share khan)

It is the biggest and best known full service stock broker in India. There is biggest selling
point is there seamless integration with your ICICI bank account which makes
transfer/withdrawal of funds really easy and quick. Their brokerage varies from 0.55% to
0.20% as per the trade.(amici)

They are the second largest broking house in

India after ICICI Direct. They have the vast network of bank branches even in the smaller
town. Therefore the investors who have bank account end up opening a demate /trading
account. They are also a full service broker.(hdfc)

15
Angel broking was incorporated in 1987. They have a huge network of branches and
franchises. It has it presence over more than 900 cities and has 8500 franchises. Due to
their presence over 900 cities, they had a great support system of the investors. They have a
trading platform for all the devices are it a web, smartphones, tablets and desktops. (Angel)

They are the oldest and reputed brokers in India. They are also full service brokers. They
are best known for their advisory services provided by them. They have more than 8 lakhs
customers trading with them. (motilal)

The Karvy Group is a financial service provider who ranked among the top 5 in the country
across its business segments. They provide service to 70 million individual investors and to
600 corporate houses. It has a wide network of over 450 branches covering in excess of 400
cities and towns.

16
 MARWADI SHARES & FINANCE LTD

Marwadi group was incorporated in 1992 with the vision of providing superior standards of
financial services focusing on professionalism, speed and ethics to wider corporate services
in India and proposed to start its operations in the subcontinent & overseas. The foundation
is on “values” systems- “value” addition to corporate, retails and HNI individuals through
superior wealth creation practices. All actions are based on stringent “values”- integrity,
confidentiality & commitment. “True value” for money through a holistic business
practices. Finally, “value” for client satisfaction, pre-dominates our relationship criteria.

Marwadi shares and finance limited (MSFL) is a leading financial services provider based
in Rajkot, Gujarat. The company was promoted in 1992 as a private limited company and
got it converted into public limited company in 2006. It is a premier financial service
provider with varied interest that include equity and commodity trading, depositary
participants, net based trading, portfolio management services, insurance, etc. through
various subsidiaries. Promoters of MSFL have more than 20 years of experience in the
capital market. MSFL has its dominance in Gujarat and is having presence in other states of
country also. MSFL has raised capital from investment companies, namely ICGU limited
and Caledonia investment plc. This has resulted in total equity participation of about
31.83%

MSFL started its journey by acquiring membership of NSE for cash market in 1996. It later
on entered in derivatives market of NSE during 2000. During 2003, it entered into
commodity market operations by acquiring memberships of the multi commodity exchange
in India ltd (MCX) and national commodity and derivatives exchange ltd (NCDEX)
through a wholly owned subsidiary, namely, Marwadi commodity broker private ltd.
(MCBPL). Thereafter in 2004, MSFL acquired membership of BSE for cash and
derivatives segment.

17
The company with the fleet of around 1000 employees has expertise in providing broking
services, DP services, risk management, operation and customer related services. MSFL
has recently commenced portfolio management services, institutional and corporate house
trading and commodity spot segment trading. MSFL has around 1,61,000 broking and
1,11,000 active DP clients availing services from around 85 branches locations and around
700 sub broker ship network across India. The company has a strong clientele base and
retail broking is its strength. MSFL’s contribution in turnover on the exchange is 1.01%
while in retail segment it has rose up to 2.01%.

High capital adequacy and sound financial of MSFL are borne out by the fact that Marwadi
terminals have never ever been disabled for lack of margins or shortage of funds. Normally,
during wild market swings, except for banks and FIIs, very few brokers can infuse the
funds required to keep trading terminals on.

MSFL is awarded by BSE for being amongst top five volume drivers for cash as well as
F&O segment since year 2006-2007 onwards and has remained amongst top 5 brokers on
BSE platform.

MSFL has adopted high compliance standards and has an unblemished regulatory record
throughout the year of its operations. Over the years, the compliance team has been
strengthened and term is developed with qualified professionals to ensure compliance in all
the business operation or activities that are taking place in the organizations. Strong
compliances are mainly due to direct investment of M.D. to ensure strict compliances and
timely adoption of rules and regulations of regulatory authorities with regard to routine
business operations. Adherence of high compliances standard is also evident from the fact
that there is not a single arbitration case field against the company during its all these year
of operations.

18
Name :- Marwadi Shares & Finance Limited
Location :- Marwadi Shares and Finance,

Nana Mauva Main Road,

150, ft. Ring Road,

Rajkot: 360001.

Year of Establishment :- 1994

SEBI regi. No. : - NSE-INS235443012

BSE-INS015341113

Phone no. :- (0281)2332001

Website :- www.marwadionline.com

E-mail :- reception.msfl@marwadionline.net
Form of Organization :- Limited company

Membership :- NSE-BSE-MCX-NCDEX-NSDL-CDSL

Managing Director :- Mr. Ketan H. Marwadi

Director :- Mr. Deven H. Marwadi

Mr. Sandeep H. Marwadi

Mr. Jeet K. Marwadi

19
Mr. Ketan H. Marwadi (Chairman & Managing
director)

He promoted the Company in 1992. He has also been

instrumental in guiding the Company for securing the
corporate membership of BSE & NSE in cash and
derivatives segment, membership of Saurashtra Kutch Stock
Exchange Ltd., and for the launching of depository services
of NSDL and CDSL. In his current role, he is the chief
strategist, overseeing MSFL’s strategic growth and
development as well as the operational functioning and
initiatives for ensuring best investor services. He has more
than 25 years of experience in the primary as well as the secondary market of Capital
Market, dealing with stock exchanges, regulatory and statutory bodies, and monitoring of
overall compliance.

Mr Deven H. Marwadi (Director)

He has been the Director of the Company since 1998. His
experience includes over 25 years of expertise in the area
of risk management in the fin0ancial services industry.
He has extensive knowledge and expertise in the line of
trading and clearing segment and is in whole charge of
day today trading activities of NSE and BSE trading in
Cash and derivatives segment. He is in charge of total
client base of the organization including DP operations of
NSDL and CDSL apart from looking after the trading
requirements of Commodity market carried out by the
subsidiary company having membership of MCX and NCDEX.

Mr. Sandeep H. Marwadi (Director)

Appointed as Director of the company in the year 1998. He has extensive knowledge and
expertise in the line of hardware and software and various
networking facilities. He is in charge of hardware and
software operations of the company, installation of
hardware and software, its maintenance, connectivity and
networking of branch offices and sub-brokers, back-up
operations, software developments in relation to stock
broking and DP related operations of the company.
Upgradation of tech. computer peripherals, effective
networking of the company and its branch offices and to
provide uninterrupted communication facilities to user.

20
 HISTORY AND DEVELOPMENT

Marwadi Shares and Finance Ltd. Started In the year 1994 when acquired the membership
of National Stock Exchange of India Ltd. Which give their investors a cost- effective
trading & settlement system.

In the last 25 years, Marwadi has emerged as one of the India’s fastest growing retail
houses with retail market share at 2.73% .The Company is the 5 th leading retail broking
house in India. It ranks among top 10 performers in BSE in the equity segments during the
year 2007-08. The company has grown into a network of more than 75+ branches with a
1000+ committed professional people, more than 750 channel partners. The company has
more than 7000 retail trading terminals spreader over 184 cities.

MILESTONE:-

The company crossed the following milestones to reach its present position as the leading
retail broking house in India

1992 – MSFL was incorporated by first generation.

1996 – Became a corporate member of National Stock Exchange of India (NSE)

1998 – Became a member of Saurashtra Kutch Stock Exchange (SKSE)

1999 – Launched Depository service of Depository Participant under National Depository

Security Ltd. (NSDL)

2000 – Commenced Derivative trading after obtaining registration as clearing and Trading
Member in NSE.

2003 – Marwadi commodity broker ltd. became a corporate member of the National
Commodity and Derivatives Exchange of India Ltd. (NCDEX)

21
-Marwadi Commodity Broker Ltd becomes a corporate member of the Multi Commodity
Exchange of India Ltd. (MCX)

2004 – MSFL launches depository services of Depository Participant under Central

Depository Services (India) Ltd.

2005 – MSFL launches its first online trading platform on desktop and web based.

2006 - MSFL converted to Limited Co. (Marwadi Shares and Finance Limited) the
company raised private equity from ICGU Limited, a wholly owned subsidiary of India
Capital Growth Fund.

2007 – Attracted Private Equity Investment from Reputed Investors Caledonia & ICGI.

2008 – Adjudged the 5th Largest Broking House by Dun & Bradsheet.

2009 – Growing Institutional Business. Moves in to 90000 Square feet State of Art
Infrastructure. Marwadi Commodity Broker Ltd. Become member of NSEL.

2010 - Register as Pop for NPS introduced by Gov. of India. Lunched new scheme of PMS.
MSFL increased its prominence significantly in institutional broking and capital market
dales.8

2011 – MSFL launches its first mobile trading application.

2015 – Obtained Merchant banning License

2017 – MSFL launches ‘MSFL Connect’ the latest mobile trading application

- MSFL launches ‘Marwadi Click’ the latest web based trading platform
- Marwadi group completes 25 years in the financial services business
- MCBPL has taken membership of ICEX in 2017 and active broker on diamond
derivative contract.

22
 MISSION – VISION OF MARWADI

“To be a world-class financial services provider by arranging all

conceivable financial services under one-roof at affordable costs
through cost effective delivery systems and achieve organic growth in
business by adding newer lines of Business.”

23
Organizational Structure

24
 Product Profile

Equity

Commodit
NPS
y

Depository
Insurance
services

Product

Pancard Internet
Services Trading

Mutual
IPO
Fund
Advisory
Service

http://shodhganga.inflibnet.ac.in/bitstream/10603/32863/13/13_chapter
%201.pdf

25
Overview of Different Department

 Operation Department :
Operation management, which was formerly considered as manufacturing
management only, now it is known as operation management. Many Organizations
providing services like hospitals, banks, transportation, framing, warehousing etc.
are now covered by operation management. An operation by formal definition is a
process of changing inputs into outputs, which the creation or adding of value to
some entity.

 Store Management
In this department information regarding customer KYC (Know Your Client) a
form which is registration from join MARWDI SHARES & FINANCE LTD also
information of that client’s ID and password, address, contact number, type of
product using etc.

 Finance Department
Financial management is that managerial activity which is concerned with the
planning and controlling of the firm’s financial resources. It is an integrated
decision making process concerned with acquiring, financing and managing assets
to accomplish the overall goal of a business organization.it can also be stated of
planning decision in order to maximize the shareholder’s wealth.

 Mutual fund and IPO

Here, activities related to mutual fund takes place. If any customer wants guidance
about investment in mutual funds, this department will guide him and will also tell
about procedure of investment in mutual funds. MSFL is a corporate agent of Birla
Sun Life, ICICI and Franklin, TATA Mutual Funds. IPO means Initial Public Offer.
Information taken from computer on line by the staff of this department will enter
into their own handled computer. MSFL is a member of collection center.

26
 Accounts
Mr. Sureshbhai and Mr. Vithlani bhai handle this department. All the accounts
regarding work are done here. All the monitory transactions entry is passing out and
secured here. In other meaning all the finance related activities are done here. All
the decisions regarding allocation or transformation of funds are taken here. This
department also sees the records of bank related transactions banks related
transaction, and bank balance and statements are also prepared.

 DP
The task related to trade collection is done in collection front office. As name
stated, here different collections are collected regarding accounting opening fees,
demat charges. This is the department, which is direct related to clients or customers
can contact here about any queries regarding trade collection

The work of DP- Back office is to check activities of front office, this department
sees whether DRF (Demat Request Form) for Demas account opening has been fill-
up correctly or not. If required to change detail of bank transaction. This department
as name suggested not comes directly into contact with customer. In brief a process,
which has started from DP-Back office, will have been completed over here.

 Marketing Department
Market may be defined as the process of exchange between seller and buyer. It
involves a number of inter-related activities designed to plan, promote, distribute
and price a product or service in order to meet the wants and needs of both the
parties in exchange transaction via, consumer and producers. In short, marketing
deals with identifying and meeting human and social needs. One of the shortest
definitions of marketing is “meeting needs profitably”

27
  Human Resource Department
Manpower planning is the basic function of HR. in the manpower planning HR
department recognizes the need of the employee at a various level in the
organization. In the manpower planning is take the shape with the help of various
departments HOD or various key persons of the department.

https://www.scribd.com/document/101327303/Marwadi-shares-finance-ltd

2.6 SWOT ANALYSIS

During this training at Marwadi, I had come to know the strengths - Weakness –
Opportunities – Threats for the company and it is very useful for a company to
analyze them. Therefore, the SWOT analysis is presented here and the suggestion
for maintaining strengths and removing weakness are explained.

STRENGTHS:

 Well-maintained infrastructure.
 Dedicated, intelligent and loyal staff
 On-line trading products
 Lowest brokerage and other charges less than competitors
 The best investment advice correct up to 70-90% through dedicated
 Research and reports
 Wide product range to enable the clients to choose the best alternative.
 One of the best DPs in India
 A positive image in the existing clients

28
WEAKNESSES:

 Less awareness in the market

 Time consuming process for account opening, resolving the problem of the
customers, etc.
 Service quality is not maintained accordingly how they are promoted

OPPORTUNITIES:

 Slope of the stock market towards delivery based transaction

 Large potential market for delivery and intraday transactions
 Open interest of the people to enter in stock market for investing
 Attract the customers who are dissatisfied with other broker & DPs
 An indirect opportunity generated by the market form its bullishness
 Large untapped market in the Saurashtra region of Gujarat

THREATS:

 Decreasing rates of brokerage in the market

 Increasing competition against other brokers & DPs
 Poor marketing activities for making the company known among the
customers
 A threat of losing clients for any kind of weakness of the company
 Losing the untapped market with the entry of the competitors.

29
 WHAT IS INVESTMENT?

Investment involves the employment of funds on assets with the aim of earning income or
capital appreciation.

It is one of the most successful ways to make provisions for future uncertainties. If the
Investments are well planned than one can get satisfaction of safety and surety in life.
Investments were done from very early days of civilization. Initially the term saving was
more popular and was considered safe.

In earlier days people were investing much in real estate, Bank FD and RD, Bullion, Gold
etc. because they think investing in these option were safe especially bank FD’s. But
every investment has some amount of risk in it whether it is bullion, real estate, Bank FD,
gold or capital market. The degree of risk only varies but there is risk associated with all
the types of investment. With the risk there also lies the opportunity to earn high returns.
For to example compare to bank FD, Stock market is high risk investment, but it also gives
high returns as compared to bank FD.

Different people have different risk bearing capacity. Based on their on their risk bearing
capacity they choose their investment option. The person having age between 25-35 might
have high risk bearing capacity because he has just started his career and can have a long
time to recover the loss so he can take high risk while the person of age 60+ and is retired
cannot take the amount of risk same as a person of age 25-35 because now he don’t have
that much time to recover losses. There are factors which affect the risk bearing capacity of
an individual.

Gender, income and profession has impact on the risk appetite of an individual. According
to these factors there might be different risk bearing capacity between male and female or
there might be different risk bearing capacity between individual of different professions.

30
Investment benefits society as well as economy. It is an outgrowth of economic
development and the maturation of modern capitalization. For the economy as a whole,
aggregate investment sanctioned in the current period is a major factors in determining
aggregate demand and hence the level of employment

GOALS OF INVESTMENT

The basic reason for investing the money is to get highest returns on it. The secondary
reason might be to generate on extra income, for tax saving, for getting return on idle
resources for making provision for future uncertainties, for increasing capital etc.

INVESTMENT TIME FRAME

Investor should decide a proper time period for investing money. It can be short-term, long
- term or short-term and long term both. The amount of risk to be taken is based on the time
frame of the investment only. If the time period for investment is short term than the
investor must not take high risk and if the time period is long term than the investor can
take high risk.

Less than 1 year (Immediate access)

Less than years (Short-term)

2 to 5 years (Short to mid-term)

6 to 10 years (mid-term to long term)

Over 10 years (long-term)

31
 WHAT IS RISK?

Risk refers to the possibility of incurring loss in the financial transactions. Every
investment potion has some amount of risk. Every individual has different risk bearing
capacity which can be based on their demographic or psychographic details.

Types of Risk

Systematic Risk

Unsystematic Risk

Systematic Risk

Systematic risk, also known as “market risk” or “un-diversifiable risk”, is the uncertainty
inherent to the entire market segment.

Unsystematic Risk

Unsystematic risk, also known as “specific risk”, “diversifiable risk” or “residual risk” is
the type of uncertainty that comes with the company or industry you invest in.
Unsystematic risk can be reduced through diversification.

32
 RISK PROFILE AND INVESTMENT STYLES

CONSERVATIVE

AGGRESSIVE CAUTIOUS
TYPES
OF RISK
PROFIL
E

MODEARATELY
MODERATE
- AGGRESSIVE

33
Conservative risk profile

Conservative investing is an investing strategy that seek to preserve an investment

portfolio’s value by investing in lower risk securities such as fixed- income and money
market securities, and often blue-chip or large-cap equities. The primary goal of people
having conservative risk profile is to protect capital. Investor is willing to take minimum
risk and hence receives minimum or low returns.

Cautious risk profile

The primary goal of investor is capital growth. Investors in this profile requires fairly stable
growth. Investor is willing to accept small level of risk in exchange for some potential
returns over the medium to long term.

Moderate risk profile

The primary goal of investor is capital growth. Investor can tolerate some fluctuation in the
value of investment. Investors can tolerate moderate level of risk in exchange for relatively
higher potential returns over the medium to long term.

Moderately aggressive risk profile

The primary goal of the investor is capital growth. Investors of this type of profile can
tolerate a fair level of fluctuations in the investment. The Investors having this type of
profile accepts high risk in order to maximize returns over the medium to long term.

Aggressive risk profile

The primary goal of the investor is long-term capital growth. The investor can tolerate
substantial fluctuations in the investment. Investors are willing to accept significant risks to
maximize returns over the long term. The investors are aware that he/she may lose a
significant part of capital.

34
 6.1 LITERATURE REVIEW

Thulasipriya in 2015 has conducted her study in 2015 on investment performance of

government employees. She did analysis on the basis of ANOVA test, t-test and
Friedman’s Ranking. In her study she found that the employees who are educated, salaried
and independent preferred investment option which gives tax benefit, security and safety,
high return, liquidity and so on but as the government employee prefer to invest their
money in private chits, private deposit and equity shares. Finally the researcher concluded
that investing in private chit is highly risky.

Kumar P. in 2015 had observed the kinds of investors’ perception and their behavior
towards the stock market. More number of people have invested their money in the stock
market and burnt their fingers, out of which Few have gone into the extremes and
committed suicide. Conclude that Money is universally. We human beings have good
magnetic power. Everything depends on law of attraction. We attract all the situations,
people and circumstances in our life. Then why cannot we attract money. It is all because
of our limited perception and attitude about money. Our conservative thinking pulls us back
and makes us to act small in our life.

Thulasipriya in 2016 had examined the evidence that investors influence investment
behavior of the salaried investors and it analyzed that the investment preference among
salaried investors. The analysis exposed that the periods of investment between the salaried
investors choose to have both long-term and the short-term investment for their safe future.
To conclude that salaried group nevertheless of age and annual income, besides their
occupation and marital status they used to prefer the investment option, which will give the
long-term benefit and highly secured cum profitable avenues.

Geetha N, Ramesh M in 2011 analyzed performers study on people’s preferences

investment behavior the person dealing with the planning must know all the various
investment choices and how these chosen for attaining the Overall goals.

35
The details of give along with the various ways in which the investment has kept up and
manage. Among all these investment areas, the researchers found that most of the investors
would prefer to invest their money in insurance, NSC, PPF and bank deposit. The author
suggested that no one get aware about stock market, equity, bound and debentures.
Therefore, the awareness program is must to know new services about stock market.

Siteshbajaj in 2012 found that understanding the level of awareness about equity market
and the demographic profile of offered equity investors based on primary data, secondary
data and the data analyzed by using SPSS. The author concluded that the most of the
investors’ method rational level of awareness about equity market. Awareness programs
should plan to help equity market as an investment opportunity and to make people aware
of its long-term benefits. In this value, broking houses must to play a vital role and show
the investors in picked up the right shares at the correct time.

Raja Rajan in 1998 highlighted segmentation of investors on the basis of their

characteristics, investment size, and the relationship between stage in life cycle of the
investors and their investment pattern.

Kavitha M in 2006 discussed that investors in Coimbatore city are aware of the various
investment opportunities. They are also that no investment can be made without risk. Each
and every investment has its own risk, even the more secured investment like bank deposit,
gold and silver etc. Investment made in land and buildings, gold etc. has comparative value
in long run. The private sector investments consists of equity shares and preference shares,
debentures and public deposits with companies, the predominance of Gov. sector serves the
purpose of bringing about confidence to the individual investors.

De Bundt and Thaler in 1985 while investigating the possible psychological basis for
investor behavior, argue that mean reversion in stock prices is an evidence of investors over
reaction where investors overemphasis recent firm performance in forming future
expectations.

36
6.2 BACKGROUND OF STUDY

 The study was conducted on the topic “Investment pattern on the basis of risk
profile of investors”.
 Primary research has been conducted by me to fulfill the objective of the project.
The research has been conducted in the Rajkot city only.
 I was given 6 weeks to conduct the research. I did survey of 200 customers through
electronic and personal survey method.

6.3 PROBLEM STATEMENT

“A study on the investment pattern on the basis of risk profile of the investors.”

6.4 OBJECTIVES OF THE STUDY

 To know which is the most preferred investment option among the investors.
 TO study about the risk profile of the investors.
 To study about the risk bearing capacity of investors on the basis of demographic
profile.
 To understand the demographic profile of the respondents.

37
7.1 RESEARCH DESIGN

Descriptive research design was used for conducting the survey.

7.2 SOURCE OF DATA

The source of data study is primary data.

7.3 DATA COLLECTION METHOD

Personal survey method and electronic survey method were used for getting response for
the survey.

7.4 POPULATION

The sample size for this study were all the individual in Rajkot who invest their money.

7.5 SAMPLE

The sample size for this study is 200 people of Rajkot.

7.6 SAMPLING METHOD

The sampling method used for this survey is Convenience sampling method.

7.7 DATA COLLECTION INSTRUMENT

Data collection instrument used in this survey was questionnaire.

38
8. DATA ANALYSIS AND INTERPRETATION

Q 1. Gender

8.01 Gender

Particular Frequency

Female 78

Male 122

Gender
140
122
120

100
78
80

60

40

20

0
Female Male

Interpretation

Out of 200 respondents, 78 are females while 122 are males.

Q 2. Age

39
 8.2 Age

Particular Frequency
20 or Below 4
21-30 102
31-40 39
41-50 45
51-60 8
61or Above 2

Age
120
102
100

80

60
45
39
40

20
8
4 2
0
20 or Below 21-30 31-40 41-50 51-60 61or Above

Interpretation
Out of 200 respondents, 4 people are below 20. 102 people are between 21-30 years.39
people are between 31-40 years. 45 people are between 41-50 years. 8 people are between
51-60 years and 2 people are above 61 years.

Q 3 Annual Income

40
 8.03 Annual Income

Particular Frequency
Less than 1 lakh 52
1-3 lakhs 67
3-5 lakhs 43
5-8 lakhs 21
More than 8 lakhs 17

Annual Income
80

70 67

60
52
50
43
40

30
21
20 17

10

0
Less than 1 lakh 1-3 lakhs 3-5 lakhs 5-8 lakhs More than 8 lakhs

Interpretation
Out of 200 respondents, 52 people have annual income less than 1 lakh. 67 people have
annual income between 1-3 lakh. 43 people have annual income between 3-5 lakh. 21
people have annual income between 5-8 lakhs and 17 people have income more than 8
lakhs.

Q 4 Occupation

41
 8.4 Occupation

Particular Frequency
Government employee 9
Private-sector employee 91
Self employed 44
Housewife 19
Student 35
Retired 2

Occupation
100
91
90
80
70
60
50 44
40 35
30
19
20
9
10
2
0
Government Private-sector Self employed Housewife Student Retired
employee employee

Interpretation
Out of 200 respondents, 9 people are Government employee, 91 are private sector
employee, 44 are self-employed, 19 are housewife, 35 are students and 2 are retired.

Q 5. Do you invest money?

42
 8.5 Investment of Money

Particular Frequency

Yes 200

No 0

Frequency
250

200
200

150

100

50

0
0
Yes No

Interpretation

All the 200 respondents are investing their money in one or other investment avenues.

Q 6. What is the tenure of investment?

43
 8.6 Tenure of investment

Particular Frequency
Long term investment 63
Short term investment 51
Both long and short term Investment 86

Tenure of investment
100
90 86
80
70 63
60
51
50
40
30
20
10
0
Long term investment Short term investment Both long and short term
Investment

Interpretation
Out of 200 respondents, 63 respondents prefer a long term investment while 51 respondents
prefer short term investment and 86 respondents prefer both long term as well as short term
investment.

Q 7 What is your time frame of investment?

44
 8.7 Time frame of investment

Particular Frequency
0-1 year 25
1-3 year 75
3-5 year 50
5-8 year 22
8-10 year 37
More than 10 year 6

Time Frame of investment

250
200 200 200 200 200 194 200
200 175 178
150 163
150 125
100 75
50 37
50 25 22
6
0
0-1 year 1-3 year 3-5 year 5-8 year 8-10 year More than
10 year

No Yes Total

Interpretation
Out of respondents, 25 respondents invest for the time period of 0-1 year.
Out of respondents, 75 respondents invest for the time period of 1-3 year.
Out of respondents, 50 respondents invest for the time period of 3-5 year.
Out of respondents, 22 respondents invest for the time period of 5-8 year.
Out of respondents, 37 respondents invest for the time period of 8-10 year.
Out of respondents, 6 respondents invest for the time period of more than 10 year.
Q 8. How frequently do you invest?

45
 8.8 Frequency of investment

Particular Frequency
Weekly 14
Monthly 83
Quarterly 43
Half yearly 20
Yearly 67

Frequency of Investment
250

200 200 200 200 200

200 186 180
157
150
133
117

100
83
67

50 43

14 20

0
Weekly Monthly Quarterly Half yearly Yearly

No Yes Total

Interpretation
Out of 200 respondents, 14 respondents invest Weekly.
Out of 200 respondents, 83 respondents invest Monthly.
Out of 200 respondents, 43 respondents invest Quarterly.
Out of 200 respondents, 20 respondents invest half yearly.
Out of 200 respondents, 67 respondents invest yearly.
Q 9. Why do you invest money?

46
 8.9 Reason of Investment

Particular Frequency
For earning returns 50
To increase capital 54
To generate on ideal resources 15
To make provision for future 49
uncertainties
Tax saving 35
Income 34
To have money for important events 29

Chart Title
250 200 200 185 200 200 200 200 200
200 150 151 165 166 171
146
150
100 50 54 49
50 15 35 34 29
0
s l es es g e ts
urn p ita rc nti vin om en
et ca ou ai sa c ev
rt In
gr se lr
es ce Ta
x nt
nin r ea a n r ta
r c e u po
r ea o
in n
id
u re im
T t
Fo eo rf
u fo
r
r at fo ey
ne on on
ge iv si m
To o ve
e pr ha
o
ak T
m
To No Yes Total

Interpretation

47
Out of 200 respondents, 50 people invest for earning returns.
Out of 200 respondents, 54 people invest to increase capital.
Out of 200 respondents, 15 people invest to generate on idle resources.
Out of 200 respondents, 49 people invest to make provision for future uncertainties.
Out of 200 respondents, 35 people invest for saving tax.
Out of 200 respondents, 34 people invest for income.
Out of 200 respondents, 29 people invest to have money for important events.

Q 10. Where do you invest?

8.10 Investment Option

Particular Frequency
Equity 78
Commodity 15
Currency 14
Bank FD 64
Real estate 27
LIC 57
Mutual fund 60
Gold and silver 16
Govt. Bonds 8
Post Office 18
Company FD 6

48
 Investment Options
250

200 200 200 200 200 200 200 200192 200 200194 200
200 185 186 184 182
173

150 136 143 140

122

100 78
64 57 60
50
27
15 14 16 18
8 6
0
ty ity cy te r s
ui kF
D LIC un
d
ve nd ce yF
D
Eq od r en n esta la f sil o ffi n
m
Cu
r Ba al d .B tO pa
m Re ut
u an vt os m
Co M ld Go P Co
Go

No Yes Total

Interpretation
Out of 200 respondents, 78 people invest in equity.
Out of 200 respondents, 15 people invest in commodity.
Out of 200 respondents, 14 people invest in currency.
Out of 200 respondents, 64 people invest in Bank FD
Out of 200 respondents, 27 people invest in Real estate.
Out of 200 respondents, 57 people invest in LIC.
Out of 200 respondents, 60 people invest in Mutual Funds.
Out of 200 respondents, 16 people invest in Gold and Silver.
Out of 200 respondents, 8 people invest in Govt. bonds
Out of 200 respondents, 18 people invest in Post office.
Out of 200 respondents, 6 people invest in Company FD.

49
Q.11 in which of the above investment option have you invested since last 1 year?
8.11 Investment option preferred in last 1 year

Particular Frequency
Equity 73
Commodity 17
Currency 11
Bank FD 61
Real estate 21
LIC 49
Mutual fund 55
Gold and silver 17
Govt. Bonds 4
Post Office 19
Company FD 4

Investment option preferred in last 1 year

250
200 200189 200 200 200 200 200 200196 200 200196 200
200 183 179 183 181
139 151 145
150 127
100 73 61 49 55
50 17 21 17 19
11 4 4
0
ity cy te r s ce
ui
ty
kF
D LIC un
d
ve nd yF
D
q od r en n esta la f sil o O ffi n
E m
Cu
r Ba al d .B t pa
m Re ut
u an vt os m
Co M ld Go P
C o
Go

No Yes Total

50
Interpretation
Out of 200 respondents, 73 people had invested in equity.
Out of 200 respondents, 17 people had invested in commodity since last 1 year.
Out of 200 respondents, 11 people had invested in currency since last 1 year.
Out of 200 respondents, 61 people had invested in Bank FD since last 1 year.
Out of 200 respondents, 21 people had invested in Real estate since last 1 year.
Out of 200 respondents, 49 people had invested in LIC since last 1 year.
Out of 200 respondents, 55 people had invested in Mutual Funds since last 1 year.
Out of 200 respondents, 17 people had invested in Gold and Silver since last 1 year.
Out of 200 respondents, 4 people had invested in Govt. bonds since last 1 year.
Out of 200 respondents, 19 people had invested in Post office since last 1 year.
Out of 200 respondents, 4 people invest in Company FD since last 1 year.

Q 12. Why do you prefer above investment option?

(Terms of risk)
8.12 Risk in preferred investment option

Particular Frequency
High Risk 31
Neutral 99
Low Risk 70

51
 Risk in preferred investment option
120
99
100

80 70
60

40 31

20

0
High Risk Neutral Low Risk

Interpretation
Out of 200 respondents, 31 people are high risk takers while 99 people are moderate risk
takers and 73 people are low risk takers.

Q 13. Why you prefer above investment option?

(Terms of return)
8.13 Return of preferred investment option

Particular Frequency
High Return 30
Average return 108
Low Return 62

52
 Return of preferred investment option

120
99
100

80 70
60

40 31
20

0
High Risk Neutral Low Risk

Interpretation
Out of 200 respondents, 30 people like to prefer high investment option while 108 people
likes to prefer average return investment option and 62 people likes to prefer low return
investment option.

Q 14.How much percent of total income do you invest?

8.14 Percentage of income invested

Particular Frequency
Below 5% 46
5-10% 93
10-15% 39
More than 15% 22

53
 Percentage of income invested

100 93
90
80
70
60
50 46
39
40
30 22
20
10
0
Below 5% 5-10% 10-15% More than 15%

Interpretation
Out of 200 respondents, 46 people invest below 5 % of their total income. 93 people invest
5-10% of their total income. 39 people invest 10-15% of their total income and 22 people
invest more than 15 % of their total income.

Q 15.How much risk you take?

8.15 Amount of risk one can take

Particular Frequency
High 31
Neutral 110
Low 59

54
 Amount of risk one can take

120 110
100

80
59
60

40 31
20

0
High Neutral Low

Interpretation
Out of 200 respondents, 31 people can take high risk, 110 can take moderate risk while 59
people can take low risk

Q 16. Before taking the final investment decision, who are the people/sources around
you whom you consult in order to seek more information?
8.16 People/sources consulted for investment decision

Particular Frequency
Use own knowledge 56
Spouse 25
Relative 34
Expert view 39
Parents 37
Children 17
Friends 22
Financial consultant 34
Investment advisor 42

55
 People/sources consulted for investment
decision
250
200 200 200 200 200 200 200 200 200
200 175 183 178
166 161 163 166 158
150 144

100
56
50 34 39 37 34 42
25 17 22
0
ge us
e ve iew ts re
n ds nt iso
r
led o le ati tv r en ild ir en lta v
ow Sp er Pa Ch F su d
R p on ta
kn Ex c en
wn ial tm
o anc ves
e n
Us Fi In

Interpretation
Out of 200 respondents, 56 people use their own knowledge for investing money.
Out of 200 respondents, 25 people take help of their spouse for making investment
decision.
Out of 200 respondents, 34 people take help of their relatives for making investment
decision.
Out of 200 respondents, 39 people take expert views before making investment decision.
Out of 200 respondents, 37 people take help of their parents for making investment
decision.
Out of 200 respondents, 17 people take help of their children before making investment
decision.
Out of 200 respondents, 22 people take help of their friends for making investment
decision.
Out of 200 respondents, 34 people take help of their financial consultant for making
investment decision.
Out of 200 respondents, 42 people take investment advisor’s advice for making investment
decision.

56
 9. FINDING AND SUGGATION

 Most of the respondents prefer do investment for both long-term as well as short
term.
 Most of the respondents invest money monthly.
 Most of the respondents invest their money increase capital.
 Most of the respondents are investing in equity investment option.
 Most of the respondents are ready to take moderate risk in the investment.
 Most of the respondents invest 5-10 % of their total income.
 Most of the respondents use their own knowledge before taking final investment
decision.
 Most people of age 21 to 30 years preferred equity as an investment.
 Most people of annual income between 1-3 lakhs preferred equity as an investment
option.
 Most males preferred equity as an investment option.
 Most people working in private sector preferred equity as an investment option.

CONCLUSION

 As the study is concerned it is concluded that investment is very complex activity

and the investors have different attitude towards investment.
 The investment behavior of the investor changes with respect to the risk profile.
 Most of the investors have got conservative risk profile while very few people have
aggressive risk profile.

10. LIMITATIONS OF THE STUDY

 Time constraint: if more time was available I could have covered more people.
 Some people were not ready to share the information regarding their investment.
 As I did survey of 200 people only so the result might not be applicable to people at
large scale.

57
Survey form
I am Akash Makwana From Sunshine Group of Institution Rajkot. I am
Undergoing a project on “Investment Pattern on the basis of risk profile
Investors”. Please spare your valuable time to fill the Questionaries.The
Information given by you will be used for academic purpose and will be kept
confidential. Thank You.
Note: - * Questions are as required

Personal Details:-

1. Name *:- _________________________________________________

2. Mobile No:- ______________________

3. Gender*
Mark only one oval
a. Male
b. Female

4. Age *
Mark only one oval
a. 20 or below
b. 21-30
c. 31-40
d. 41-50
e. 51-60
f. 61 or above

5. Annual Income
Mark only one oval
a. Less than 1 lakh
b. 1-3 lakhs
c. 3-5 lakhs
d. 5-8 lakhs
e. More than 8 lakhs

58
6. Occupation
Mark only one oval

Government employee
Private-sector employee
Self employed
Housewife
Student
Retired

7. Do you invest money? *

Mark only one oval
a. Yes
b. No

8. What is your tenure (Period) of investment?

Mark only one oval
a. Short term investment (0-1 Year)
b. Long term investment (Above 1 Year)
c. Both long term and short term investment

9. If you invest for long term then what is tenure (Period) of

investment?
Mark only one oval
a. 1-3 years
b. 3-5 years
c. 5-8 years
Others: ____________________________________

10.How frequently do you invest?

Tick all that apply.
a. Weekly
b. Monthly
c. Quarterly

59
 d. Half yearly
e. Yearly

11.Why do you invest money? *

Tick all that apply.
a. For earning returns
b. To increase capital
c. To generate on ideal resources
d. To make provision for future uncertainties
e. Tax saving
f. Income
g. To have money for important events

12.Where do you Invest Money? *

Tick all that apply.
a. Equity
b. Commodity
c. Currency
d. Bank FD
e. Real Estate
f. LIC
g. Mutual Funds
h. Gold and Silver
i. Gov. Bonds
j. Post Office
k. Company Bonds0

13.In which of the above Investment option have you invested since
last year?
Tick all that apply.
a. Equity
b. Commodity
c. Currency
d. Mutual Funds
e. Bank FD
f. Gold and Silver
g. Real Estate
h. Government Bonds
i. LIC

60
 j. Post Office
k. Company FD

14.Why do you prefer above investment option? (in a Risk) *

Mark only one oval
1 2 3

High Risk
Low Risk

15.How much percent of total income do you invest?

Mark only one oval
a. Below 5%
b. 5-10%
c. 10-15%
d. 15-20%

16.Why do you prefer above investment option? (in a Return) *

Mark only one oval
1 2 3

Low Return High Return

17.How much risk can you take? *

Mark only one oval
1 2 3

High Low

18.According to you which source is most reliable in Investment

decision?
Tick all that apply. *
a. Use own knowledge
b. Relatives
c. Online Media
d. Financial Consultant
e.

61
19.Feedback :-
___________________________________________

Thanking You for Valuable Time Share with us

SOURCES

http://www.indiansharebroker.com
https://marwadionline.com/
https://marwadionline.com/ProductService/EquityStock
https://marwadionline.com/About/OurHistory
http://www.topsharebrokers.com/brokerage-product-and-services/
marwadishares/2
https://www.investopedia.com/
http://www.icommercecentral.com/

62
 BIBLIOGRAPHY
Thulsasipriya (2015) A study on the Investment Preference of Government Employees
on Various Investment Avenues. International Journal of Management Research and
Social Science 2: 9 -16.

Kumar P (2015) A new outlook on investors’ perception towards stock market.

Thulasipriya (2016) A study on impact of family size and family income on the
investment behavior of salaried investors. International research journal of human
resources and social sciences 3: 199-214.

Tarakpaul, Siteshbajaj (2012) Influence of demographic profile of equity investors on

their level of awareness about equity market. The international journal of management
l: 1-12.

Geetha N, Ramesh M (2011) A Study on People’s Preferences in Investment Behavior.

Raja Rajan (1997, 1998), “Investment size based segmentation of individual investors”,
Management Researcher, 1997b, 21-28; “Stages in life cycle and investment pattern”,
The Indian Journal of Commerce, 51 (2 & 3), 1998, 27 – 36; “Investors demographics
and risk bearing capacity”, Finance India, 17(2), June 2003, pp.565 – 576; “Chennai
Investor is conservative”, Business Line, 23 Feb.1997a.

Kavitha M (2006), A study on investment opportunities and investors preference in

Coimbatore city, Unpublished M.Phil. dissertation submitted to Salem Sowdeshwari
College, Salem.

De Bondt, W.F.M. and Thales, R, (1985), “Does the stock market over react?” Journal
of Finance, 40, 793-805.

63