Professional Documents
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Mutual fund indicates the fund where in numerous investors come together
to invest in various schemes of mutual fund. Mutual funds are dynamic
institution, which plays a crucial role in an economy by mobilizing savings
and investing them in the capital market, thus establishing a link between
savings and the capital market. A mutual fund is an institution that invests
the pooled funds of public to create a diversified portfolio of securities.
Pooling is the key to mutual fund investing. Each mutual fund has a specific
investment objective and tries to meet that objective through active portfolio
management. Mutual fund as an investment company combines or collects
money of its shareholders and invests those funds in variety of stocks,
bonds, and money market instruments. The latter include securities,
commercial papers, certificates of deposits, etc.
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The money thus collected is invested by the fund manager in different types
of securities depending upon the objective of the scheme.Thus a mutual
fund is the most suitable investment for the common person as it offers an
opportunity to invest in a diversified, professionally managed basket of
securities at a relatively low cost. A collected corpus can be used to procure
a diversified portfolio indicating greater returns has also create Economies
of scale through cost reduction.
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4.The study is limited to only four AMCs. which are UTI, ICICI PRUDENTIAL,
SBI, and HDFC BANK.
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REVIEW OF LITERATURE
This paper is a process to analyse the Indian Mutual Fund Industry pricing
mechanism with empirical studies on its valuation. It also analyses data at
both the fund-manager and fund-investor levels. The study revealed that the
performance is affected by the saving and investment habits of the people
and the second side the confidence and loyalty of the fund Manager and
rewards affects the performance of the MF industry in India.
4
D.N. Rao in his article titled “A Study of Information Needs of Mutual
Funds Investors & Implications for Web Based Marketing of Mutual Fund
Products” gave that Mutual funds are one of the most important financial
service vehicles for investments.
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Investors preferred mutual funds mainly for professional fund management
and better returns and assessed funds mainly through Net Asset Values and
past performance.
She finds that Tax saving schemes out-performed the market in terms of
absolute return in different years of the study. However, these schemes and
market returns did not provide an adequate return to cover risk-free return
and total risk of the scheme. NAV all the time lags of the selected schemes.
The study also suggested that the mutual fund must ensure not only good
performance over the market but also consistency in their return.
Samar Mondal has given this in his article titled “Growth of Mutual Fund
in India with Comparative Performance with SBI Equity & ICICI Prudential
Mutual Fund” about A Mutual fund is a investment plan into which investor
place their contribution that are to be invested in accordance with a stated
objective. Mutual Funds serve as a key financial intermediary to playing a
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crucial role in converting the investors savings to capital market, thus
establishing a link between savings and the capital market. Small investors
are unable to diversity their investment because of their limited funds.
Mutual Fund offer a way for these investors to diversify their risk. The
mutual fund industry in India came into being in 1963 with the setting up of
the Unit Trust of India (UTI)
Dr. Sandeep Bansal, Deepak Garg and Sanjeev K Saini (2012), have
studied Impact of Sharpe Ratio & Treynor’s Ratio on Selected Mutual Fund
Schemes. This paper examines the performance of selected mutual fund
schemes, that the risk profile of the aggregate mutual fund universe can be
accurately compared by a simple market index that offers comparative
monthly liquidity, returns, systematic & unsystematic risk and complete
fund analysis by using the special reference of Sharpe ratio and Treynor’s
ratio.
Dr. Yogesh Kumar Mehta (Feb 2012), has studied Emerging Scenario of
Mutual Funds in India: An Analytical Study of Tax Funds. The present
study is based on selected equity funds of public sector and private sector
mutual fund. Corporate and Institutions who form only 1.18% of the total
number of investors accounts in the MFs industry, contribute a sizeable
amount of Rs. 2,87,108.01 crore which is 56.55% of the total net assets in
the MF industry. It is also found that MFs did not prefer debt segment.
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RESEARCH METHODOLOGY
PRIMARY DATA:
SECONDARY DATA:
Secondary data refers to data that is collected by someone other than the
primary user. Common sources of secondary data for social science include
censuses, information collected by government departments, organizational
records and data that was originally collected for other research purposes.
⮚ Website
⮚ HDFC BANK Journals
⮚ Security Analysis
⮚ Brochures
To analyse the information (or) data collected form Branch Manager and
various financial Statements the following tools are used:
1. Percentages
2. Averages
3. Bar Chart
4. Sharpe Ratio
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THEORETICAL FRAME WORK
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Concept of Mutual Fund
Investors
Mutual fund is a solution for investors who lack the time, the inclination or
the skills to actively manage their investment risk in individual securities.
They delegate this role to the mutual fund, while retaining the right and the
obligation to monitor their investments in the scheme. In the absence of a
mutual fund option, the money of such “passive” investors would lie either
in bank deposits or other ‘safe’ investment options, thus depriving them of
the possibility of earning a better return. Investing through a mutual fund
would make economic sense for an investor if his/her investment, over
medium to long term.
Sponsors
Sponsor is the company, which sets up the Mutual Fund as per the
provisions laid down by the Securities and Exchange Board of India
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(SEBI). SEBI mainly fixes the criteria of sponsors based on sufficient
experience, net worth, and past track record.
The AMC manages the funds of the various schemes and employs a large
number of professionals for investment, research and agent servicing. The
AMC also comes out with new schemes periodically. It plays a key role in
the running of mutual fund and operates under the supervision and
guidance of the trustees. An AMC’s income comes from the management
fees, it charges for the schemes it manages.
An AMC has to employ people and bear all the establishment costs that are
related to its activity, such as for the premises, furniture, computers and
other assets, etc. So long as the income through management fees covers
its expenses, an AMC is economically viable. SEBI has issued the
following guidelines for the formation of AMCs:
Trustees are an important link in the working of any mutual fund. They are
responsible for ensuring that investors’ interests in a scheme are taken care
of properly. They do this by a constant monitoring of the operations of the
various schemes. In return for their services, they are paid trustee fees,
which are normally charged to the scheme.
Distributors
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the financial and physical resources at their disposal, the distributors could
be:
Registrars
The Registrar or the AMC as the case may be maintains an account of the
investor’s investments and disinvestments from the schemes.
Custodian
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TYPES
1. Open-End Funds
Funds that can sell and purchase units at any point in time are classified as
Open-end Funds. The fund size (corpus) of an open-end fund is variable
(keeps changing) because of continuous selling (to investors) and
repurchases (from the investors) by the fund. An open-end fund is not
required to keep selling new units to the investors at all times but is required
to always repurchase, when an investor wants to sell his units. The NAV of
an open-end fund is calculated every day.
2.Closed-End Funds
Funds that can sell a fixed number of units only during the New Fund Offer
(NFO) period are known as Closed-end Funds. The corpus of a Closed-end
Fund remains unchanged at all times. After the closure of the offer, buying
and redemption of units by the investors directly from the Funds is not
allowed. However, to protect the interests of the investors, SEBI provides
investors with two avenues to liquidate their positions.
a. Load Funds
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Mutual Funds incur various expenses on marketing, distribution,
advertising, portfolio churning & fund manager’s salary. Many funds
recover these expenses from the investors in the form of load. These funds
are known as Load Funds. A load fund may impose following types of loads
on the investors:
b. Entry Load It refers to the load charged to an investor at the time of his entry
into a scheme. Entry load is deducted from the investor’s contribution amount
to the fund.
c. Exit Load
d. Deferred Load
In some schemes, the percentage of exit load reduces as the investor stays
longer with the fund.
2. No-load Funds
All those funds that do not charge any of the above mentioned loads are
known as No-load Funds.
a. Tax-exempt Funds
Funds that invest in securities free from tax are known as Tax-exempt Funds.
All open-end equity oriented funds are exempt from distribution tax (tax for
distributing income to investors).
b. Non-Tax-exempt Funds
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Funds that invest in taxable securities are known as Non-Tax-exempt Funds. In
India, all funds, except open-end equity oriented funds are liable to pay tax on
distribution income.
3. Equity Funds
Equity funds are considered to be the more risky funds as compared to other
fund types, but they also provide higher returns than other funds. It is
advisable that an investor looking to invest in an equity fund should invest
for long term i.e. for 3 years or more. There are different types of equity
funds each falling into different risk bracket. In the order of decreasing risk
level, there are following types of equity funds:
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1. Aggressive Growth Funds
a. Growth Funds
Growth Funds also invest for capital appreciation (with time horizon of 3 to
5 years) but they are different from Aggressive Growth Funds in the sense
that they invest in companies that are expected to outperform the market in
the future. Without entirely adopting speculative strategies, Growth Funds
invest in those companies that are expected to post above average earnings
in the future.
b. Specialty Funds
Specialty Funds have stated criteria for investments and their portfolio
comprises of only those companies that meet their criteria. Criteria for some
specialty funds could be to invest/not to invest in particular
regions/companies. Speciality funds are concentrated and thus are
comparatively riskier than diversified funds. There are following types of
specialty funds.
c. Sector Funds
Foreign Securities Equity Funds have the option to invest in one or more
foreign companies. Foreign securities funds achieve international
diversification and hence they are less risky than sector funds. However,
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foreign securities funds are exposed to foreign exchange rate risk and
country risk.
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S&P CNX Nifty, Sensex) are less risky than equity index funds that follow
narrow sectoral indices (like BSEBANKEX or CNX Bank Index etc).
2. Debt/Income Funds
Debt funds that invest in all securities issued by entities belonging to all
sectors of the market are known as diversified debt funds
. The best feature of diversified debt funds is that investments are properly
diversified into all sectors which results in risk reduction. Any loss incurred,
on account of default by a debt issuer is shared by all investors which
further reduces risk for an individual investor.
Unlike diversified debt funds, focused debt funds are narrow focus funds
that are confined to investments in selective debt securities, issued by
companies of a specific sector or industry or origin. Some examples of
focused debt funds are sector, specialized and offshore debt funds, funds
that invest only in Tax Free Infrastructure or Municipal Bond. Although not
yet available in India, these funds are conceivable and may be offered to
investors very soon.
Although it is not necessary that a fund will meet its objectives or provide
assured returns to investors, but there can be funds that come with a lock-in
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period and offer assurance of annual returns to investors during the lock-in
period. Any shortfall in returns is suffered by the sponsors or the Asset
Management Companies (AMCs). These funds are generally debt funds and
provide investors with a low-risk investment opportunity. However, the
security of investments depends upon the net worth of the guarantor (whose
name is specified in advance on the offer document).
Fixed Term Plan Series usually are closed-end schemes having short term
maturity period (of less than one year) that offer a series of plans and issue
units to investors at regular intervals. Unlike closed-end funds, fixed term
plans are not listed on the exchanges. Fixed term plan series usually invest
in debt / income schemes and target short-term investors. The objective of
fixed term plan schemes is to gratify investors by generating some expected
returns in a short period. Also known as Government Securities in India,
Gilt Funds invest in government papers (named dated securities) having
medium to long term maturity period. Issued by the Government of India,
these investments have little credit risk (risk of default) and provide safety
of principal to the investors. However, like all debt funds, gilt funds too are
exposed to interest rate risk. Interest rates and prices of debt securities are
inversely related and any change in the interest rates results in a change in
the NAV of debt/gilt funds in an opposite direction.
Money market / liquid funds invest in short-term (maturing within one year)
interest bearing debt instruments. These securities are highly liquid and
provide safety of investment, thus making money market / liquid funds the
safest investment option when compared with other mutual fund types.
However, even money market / liquid funds are exposed to the interest rate
risk. The typical investment options for liquid funds include Treasury Bills
(issued by governments), Commercial papers (issued by companies) and
Certificates of Deposit (issued by banks).
5. Hybrid Funds
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As the name suggests, hybrid funds are those funds whose portfolio includes
a blend of equities, debts and money market securities. Hybrid funds have
an equal proportion of debt and equity in their portfolio.
Introduction
India’s banking sector is constantly growing. Since the turn of the century,
there has been a noticeable upsurge in transactions through ATMs, and also
internet and mobile banking.
Following the passing of the Banking Laws (Amendment) Bill by the Indian
Parliament in 2019, the landscape of the banking industry began to change.
The bill allows the Reserve Bank of India (RBI) to make final guidelines on
issuing new licenses, which could lead to a bigger number of banks in the
country. Some banks have already received licences from the government,
and the RBI's new norms will provide incentives to banks to spot bad loans
and take requisite action to keep rogue borrowers in check.
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Over the next decade, the banking sector is projected to create up to two
million new jobs, driven by the efforts of the RBI and the Government of
India to integrate financial services into rural areas. Also, the traditional way
of operations will slowly give way to modern technology.
Market size
Total banking assets in India touched US$ 1.8 trillion in FY19and are
anticipated to cross US$ 28.5 trillion in FY25.
Investments
Mr GS Sandhu.
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Export-Import Bank of India (Exim Bank) will increase its focus on
supporting project exports from India to South Asia, Africa and Latin
America, as per Mr Yaduvendra Mathur, Chairman and MD, Exim Bank.
The bank has moved up the value chain by supporting project exports so
that India earns foreign exchange. In 2019–18, Exim Bank lent support to
85 project export contracts worth Rs 24,255 crore (US$ 3.96 billion)
secured by 47 companies in 23 countries.
Government Initiatives
The RBI has given banks greater flexibility to refinance current long-gestation project
loans worth Rs 1,000 crore (US$ 173.42 million) and more, and has allowed partial
buyout of such loans by other financial institutions as standard practice. The earlier
stipulation was that buyers should purchase at least 50 per cent of the loan from the
existing banks. Now, they get as low as 25 per cent of the loan value and the loan will
still be treated as ‘standard’.
The RBI has also relaxed norms for mortgage guarantee companies (MGC) enabling
these firms to use contingency reserves to cover for the losses suffered by the mortgage
guarantee holders, without the approval of the apex bank. However, such a measure can
only be initiated if there is no single option left to recoup the losses.
SBI and its five associate banks also plan to empower account holders at the bottom of
the social pyramid with a customer call facility. The proposed facility will help
customers get an update on available balance, last five transactions and cheque book
request on their mobile phones.
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History
The name bank derives from the Italian word banco "desk/bench", used during the
Renaissance by Jewish Florentine bankers, who used to make their transactions above a
desk covered by a green tablecloth. However, there are traces of banking activity even
in ancient times, which indicates that the word 'bank' might not necessarily come from
the word 'banco'.
In fact, the word traces its origins back to the Ancient Roman Empire, where
moneylenders would set up their stalls in the middle of enclosed courtyards called
macella on a long bench called a bancu, from which the words banco and bank are
derived. As a moneychanger, the merchant at the bancu did not so much invest money
as merely convert the foreign currency into the only legal tender in Rome—that of the
Imperial Mint.The earliest evidence of money-changing activity is depicted on a silver
drachm coin from ancient Hellenic colony Trapeze on the Black Sea, modern Trabzon,
c. 350–325 BC, presented in the British Museum in London.
The coin shows a banker's table (trapeze) laden with coins, a pun on the name of the
city.In fact, even today in Modern Greek the word Trapeze (Τράπεζe) means both a
table and a bank.
Banks act as payment agents by conducting checking or current accounts for customers,
paying cheques drawn by customers on the bank, and collecting cheques deposited to
customers' current accounts. Banks also enable customer payments via other payment
methods such as telegraphic transfer, EFTPOS, and ATM.
Banks provide almost all payment services, and a bank account is considered
indispensable by most businesses, individuals and governments. Non-banks that provide
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payment services such as remittance companies are not normally considered an
adequate substitute for having a bank account.
Banks borrow most funds from households and non-financial businesses, and lend most
funds to households and non-financial businesses, but non-bank lenders provide a
significant and in many cases adequate substitute for bank loans, and money market
funds, cash management trusts and other non-bank financial institutions in many cases
provide an adequate substitute to banks for lending savings to.
Entry regulation
Usually the definition of the business of banking for the purposes of regulation is
extended to include acceptance of deposits, even if they are not repayable to the
customer's order—although money lending, by itself, is generally not included in the
definition.
Unlike most other regulated industries, the regulator is typically also a participant in the
market, i.e. a government-owned (central) bank. Central banks also typically have a
monopoly on the business of issuing banknotes. However, in some countries this is not
the case. In the UK, for example, the Financial Services Authority licences banks, and
some commercial banks (such as the Bank of Scotland) issue their own banknotes in
addition to those issued by the Bank of England, the UK government's central bank.
Law of banking
Banking law is based on a contractual analysis of the relationship between the bank
(defined above) and the customer—defined as any entity for which the bank agrees to
conduct an account.
The law implies rights and obligations into this relationship as follows:
1. The bank account balance is the financial position between the bank and the
customer: when the account is in credit, the bank owes the balance to the
customer; when the account is overdrawn, the customer owes the balance to the
bank.
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2. The bank agrees to pay the customer's cheques up to the amount standing to the
credit of the customer's account, plus any agreed overdraft limit.
3. The bank may not pay from the customer's account without a mandate from the
customer, e.g. a cheque drawn by the customer.
4. The bank agrees to promptly collect the cheques deposited to the customer's
account as the customer's agent, and to credit the proceeds to the customer's
account.
5. The bank has a right to combine the customer's accounts, since each account is
just an aspect of the same credit relationship.
6. The bank has a lien on cheques deposited to the customer's account, to the extent
that the customer is indebted to the bank.
7. The bank must not disclose details of transactions through the customer's
account—unless the customer consents, there is a public duty to disclose, the
bank's interests require it, or the law demands it.
8. The bank must not close a customer's account without reasonable notice, since
cheques are outstanding in the ordinary course of business for several days.
These implied contractual terms may be modified by express agreement between the
customer and the bank. The statutes and regulations in force within a particular
jurisdiction may also modify the above terms. Some types of financial institution, such
as building societies and credit unions, may be partly or wholly exempt from bank
licence requirements, and therefore regulated under separate rules.
The requirements for the issue of a bank licence vary between jurisdictions but typically
include:
1. Minimum capital
2. Minimum capital ratio
3. 'Fit and Proper' requirements for the bank's controllers, owners, directors, and/or
senior officers
4. Approval of the bank's business plan as being sufficiently prudent and plausible.
Types of banks
Banks' activities can be divided into retail banking, dealing directly with individuals and
small businesses; business banking, providing services to mid-market business;
corporate banking, directed at large business entities; private banking, providing wealth
management services to high net worth individuals and families; and investment
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banking, relating to activities on the financial markets. Most banks are profit-making,
private enterprises. However, some are owned by government, or are non-profit
organizations.
Commercial bank: After the Great Depression, the U.S. Congress required that
banks only engage in banking activities, whereas investment banks were limited
to capital market activities. Since the two no longer have to be under separate
ownership, some use the term "commercial bank" to refer to a bank that mostly
deals with deposits and loans.
Community Banks: locally operated financial institutions that empower
employees to make local decisions to serve their customers and the partners.
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medium-sized enterprises. Apart from this retail focus, they also differ from
commercial banks by their broadly decentralised distribution network,
providing local and regional outreach—and by their socially responsible
approach to business and society.
Building societies and Landbanks: institutions that conduct retail banking.
Ethical banks: banks that prioritize the transparency of all operations and make
only what they consider to be socially-responsible investments.
Islamic banks: Banks that transact according to Islamic principles.
Investment banks "underwrite" (guarantee the sale of) stock and bond issues,
trade for their own accounts, make markets, and advise corporations on capital
market activities such as mergers and acquisitions.
Merchant banks were traditionally banks which engaged in trade finance. The
modern definition, however, refers to banks which provide capital to firms in the
form of shares rather than loans. Unlike venture capital firms, they tend not to
invest in new companies.
Both combined
Islamic banks adhere to the concepts of Islamic law. This form of banking
revolves around several well-established principles based on Islamic canons. All
banking activities must avoid interest, a concept that is forbidden in Islam.
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Instead, the bank earns profit (markup) and fees on the financing facilities that it
extends to customers.
COMPANY PROFILE
The HDFC Bank was incorporated on August 1994 by the name of 'HDFC Bank
Limited', with its registered office in Mumbai, India. HDFC Bank commenced
operations as a Scheduled Commercial Bank in January 1995. The Housing
Development Finance Corporation (HDFC) was amongst the first to receive an 'in
principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private
sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994.
HISTORY
HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable network
of over 1416 branches spread over 550 cities across India. All branches are linked on an
online real–time basis. Customers in over 500 locations are also serviced through
Telephone Banking. The Bank also has a network of about over 3382 networked ATMs
across these cities.
The promoter of the company HDFC was incepted in 1977 is India's premier housing
finance company and enjoys an impeccable track record in India as well as in
international markets. HDFC has developed significant expertise in retail mortgage
loans to different market segments and also has a large corporate client base for its
housing related credit facilities. With its experience in the financial markets, a strong
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market reputation, large shareholder base and unique consumer franchise, HDFC was
ideally positioned to promote a bank in the Indian environment.
The shares are listed on the Bombay Stock Exchange Limited and The National Stock
Exchange of India Limited. The Bank's American Depository Shares ( ADS ) are listed
on the New York Stock Exchange (NYSE) under the symbol 'HDB' and the Bank's
Global Depository Receipts (GDRs) are listed on Luxembourg Stock Exchange.
On May 23, 2008, the amalgamation of Centurion Bank of Punjab with HDFC Bank
was formally approved by Reserve Bank of India to complete the statutory and
regulatory approval process. As per the scheme of amalgamation, shareholders of
CBOP received 1 share of HDFC Bank for every 29 shares of CBOP.
HDFC Bank merged with Times Bank in February 2000. This was the first merger
of two private banks in the New Generation private sector banks category. Times
Banwas established by Bennett, Coleman and Co. Ltd., commonly known as The
Times Group, India's largest media conglomerate.
In 2008, Centurion Bank of Punjab (CBOP) was acquired by HDFC Bank. HDFC
Bank's board approved the acquisition of CBOP for ₹95.1 billion in one of the
largest mergers in the financial sector in India.
In 2021, the bank acquired a 9.99% stake in FERBINE, an entity promoted by Tata
Group, to operate a Pan-India umbrella entity for retail payment systems, similar
to National Payments Corporation of India.
September 2021, the bank partnered to launch a range of credit cards powered by
the global card network Visa. with Paytm
On April 4 2022, HDFC Bank announced merger with HDFC Limited.
The merged entity now holds a strong deposit base of around Rs. 1,22,000 crore and net
advances of around Rs. 89,000 crore. The balance sheet size of the combined entity
would be over Rs. 1,63,000 crore. The amalgamation added significant value to HDFC
Bank in terms of increased branch network, geographic reach, and customer base, and a
bigger pool of skilled manpower.
In a milestone transaction in the Indian banking industry, Times Bank Limited (another
new private sector bank promoted by Bennett, Coleman & Co. / Times Group) was
merged with HDFC Bank Ltd., effective February 26, 2000. This was the first merger of
two private banks in the New Generation Private Sector Banks. As per the scheme of
amalgamation approved by the shareholders of both banks and the Reserve Bank of
India, shareholders of Times Bank received 1 share of HDFC Bank for every 5.75
shares of Times Bank
HDFC also has a robust deposits mobilization program. HDFC has been able to
mobilize deposits from over 10 lakh depositors. Outstanding deposits grew from Rs. 1,458 crores in
March 1994 to Rs. 24,625 crores in March 2011. In addition, HDFC has received
'AAA'r a t i n g f o r i t s D e p o s i t p r o d u c t s f o r h i g h e s t s a f e t y f r o m b o t h C R
I S I L a n d I C R A f o r seventeen consecutive years. Over the years, HDFC has emerged
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as a financial conglomerate with its presence in theentire gamut of financial services
including banking, insurance (life and non-life), asset management, real estate venture capital
and more recently education loans. today, HDFC is recognized as one of the Best
Managed Companies in India and is a model housing finance company for
developing countries with nascent housing
financemarkets. HDFC has undertaken several consultancy assignments in va
rious countries across Asia, Africa and East Europe.
The HDFC Advantage
Background
with the primary objectiveof meeting a social need - that of promoting home
ownership by providing long-term finance to households. The launching of HDFC
was meant to be one small step in dealingwith the availability of housing
accommodation in India which was then virtually non-existent. HDFC as a pioneer
launched India's first specialized home loan company with aninitial capital of Rs. 100
million.
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Business Objective of HDFC Ltd.
The primary objective is to enhance residential housing stock in the country through
the provision of housing finance in a systematic and professional manner, and to promot
ehome ownership. The aim is to increase the flow of resources to the
housing sector byintegrating the housing finance sector with the overall domestic financial
markets.
Organizational Goals:
Develop close relationships with individual households.
Maintain our position as the premier housing finance institution in the country.
Transform ideas into viable and creative solutions.
To grow through diversification by gaining leverage from our existing client base.
To nurture the values and ethos of Brand HDFC through all its Subsidiaries and
Associate Companies.
Growth strategies
Increase the return on equity each year by 1 percentage point in order to
maximise shareholder value.
Maintain gross Non-performing Asset (NAP) below 1% HDFC bank adjudged BEST
PRIVATE BANK IN INDIA at global private banking awards 2021
HDFC Bank adjudged Best for wealth transfer-succession planning in
india2021 by asia money Asia private Banking Awards2021
HDFC Bank named BEST BANK IN INDIA at Euromoney Awards 2021
HDFC Bank rank NO.1 in Mass Affluent category at Euromoney private
banking and wealth management survey2021
HDFC Bank has been adjudged INDIAS BEST BANK by Euromoney awards
for excellence 2020
HDFC Bank named India’s best domastic bank by ASIA MONEY
HDFC Bank has been adjudged BEST PRIVATE BANK IN INDIA at bankers
bazar awards 2018
HDFC Bank ranks no 1 in asset management category at Euromoney private
banking and wealth management survey 2019
Euromoney survey 2018 Best private banking services for super Affluent clients
Best Bank for financial inclusion-UTI Mutual fund CNBC TV18 financial
advisory awards2017
UTI MF & CNBC-TV 18 financial adviosary awards- BEST PERFORMING
BANK PRIVATE 2018-2019
Euromoney Trade finance survey 2019- Best service (Asian banks only)
The banker bank of year TB 2018 The Banker-Bank of the year award 2018.
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VISSION
“To be the premier financial partner in ensuring sustainable housing and living
standards.” Committed to provide financial solutions for sustainable living and
assist enterepreneurs in value addition.
MISSION
2. ICICI PRUDENTIAL
Three funds namely - tax saving funds, large cap funds, and mid cap funds
and under them only funds were chosen to study. The schemes were
selected based on CRISIL ranking. The analysis is mainly based on
secondary data.
Calculations
TABLE:6.1
33
COMPANY I.TAX II.LARGE III.MID
SAVING CAP FUNDS CAP
FUNDS FUNDS
UTI 1.UTI Tax 5.UTI Equity 9.UTI Mid
Saving funds(g) cap(g)
Equity long
term
ICICI 2.ICICI PRU 6.ICICI PUR 10.ICICI
PRUDENTIAL Tax saving Focused Blue PUR Mid
long term Chip Cap Fund(g)
fund(g) equity(g)
SBI 3.SBI 7.SBI Blue 11.SBI
Magnum Tax Chip Fund(g) Magnum mid
gain(g) cap fund(g)
HDFC BANK 4.HDFC Tax 8.HDFC 12.HDFC
Saver(g) Equity Mid cap fund
fund(g) (g)
TABLE:6.2
Year Return(R)% D d²
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2021 2.4 -8.22 67.5684
22.0481
STANDARD DEVIATION(σ) √Ʃd²/N=2430.608/5
9%
TABLE:6.3
Year Return(R)% D d²
17.38%
AVG RETURN ƩR/N=76.9/5
35
√Ʃd²/ 26.23543%
STANDARD DEVIATION
N=3441.488/5
TABLE:6.4
Year Return(R)% D d²
13.74%
AVG RETURN ƩR/N=68.7/5
STANDARD 25.5084%
√Ʃd²/N=3253.392/5
DEVIATION(σ)
TABLE:6.5
Years Return(R)% D d²
STANDARD
√Ʃd²/N=3253.392/5 24.69179%
DEVIATION(σ)
37
SHARPE RATIO Rp-Rf/σp= 0.35
TABLE:6.6
STANDARD
SCHEMES AVG RETURN
DEVIATION(RISK)
38
4. HDFC Tax saver(G) 18.04% 24.691%
CHART:6.1
39
Return & Risk analysis of tax saving
funds
AVG RETURN STANDARD DEVIATION(RISK)
15.38% 16.04%
13.74%
10.62%
Companies
INTERPRETATION
From the above table and graph we found that HDFC tax saver scheme has
more return i.e., 18.04% as compared to UTI tax saving has less return of
10.62%. ICICI PRU tax saving scheme has more risk i.e., 26.23% whereas
UTI is having less risk with 22.04.
TABLE:6.7
Ratio
0.4
0.35
0.35
0.3
0.3
0.25
Percentages
0.25
0.2
0.15 0.14
0.1
0.05
0
Companies
Ratio
INTERPRETATION
From the above table and graph we can found that HDFC tax saver scheme
stands 1st as it has highest Sharpe ratio i.e., 0.35, ICICI PRU Tax saving-
long term equity fund(G) scheme stands 2nd with 0.3, 3rd SBI magnum with
0.25 and 4th UTI with 0.16.
TABLE:6.8
Year Return(R)% D d²
41
2018 32.4 20.9 357.21
TABLE:6.9
Year Return(R) d d²
2017 -18.5 -28.66 821.3956
42
2018 27.3 17.16 229.2196
TABLE:6.10
Year Return(R)% d d²
43
2018 38.2 23.12 534.5344
TABLE:6.11
Year Return(R)% d d²
44
2017 -22.2 -33.1 1095.61
STANDARD
√Ʃd²/N=2138.74/5 20.68207
DEVIATION
TABLE:6.12
45
STANDARD
SCHEMES AVG RETURN
DEVIATION
46
Return & Risk analysis of large cap funds
SCHEMES AVG RETURN STANDARD DEVIATION
29.65%
23.48%
20.19% 20.68%
Percentages
15.08%
13.50%
12.16%
10.90%
0 0 0 0
1 2 3 4
Companies
INTERPRETATION
From the above table and graph we can found that SBI Blue chip fund
scheme has more return i.e., 17.08% and also more risk i.e., 29.65%. ICICI
PRU Focused Blue chip equity (G) scheme has lowest risk i.e., 20.19% with
12.18% risk.
47
TABLE:6.13
48
RATIO
RATIO
0.26 0.26
0.23
0.17
Percentages
Companies
INTERPRETATION
From the above graph and table we found that UTI equity fund and SBI
Blue chip fund stands 1st as they has highest Sharpe ratio i.e., 0.26, then
ICICI PRU focused blue chip with 0.23 and HDFC with 0.19.
TABLE:6.14
Year Return(R)% D d²
50
10.ICICI PRU mid cap fund (G)
TABLE:6.15
Year Return(R)% D d²
51
TABLE:6.16
Year Return(R)% D d²
2018
48.3 24.36 593.4096
52
12.HDFC Mid cap fund (G)
TABLE:6.17
Year Return(R)% d d²
STANDARD
√Ʃd²/N=5077.388/5 31.86656%
DEVIATION
53
RETURN AND RISK ANALYSIS OF MID CAP FUNDS
TABLE:6.18
STANDARD
SCHEMES AVG RETURN
DEVIATION
54
Return and Risk analysis of mid cap funds
38.83% 39.41%
33.37%
31.86%
Percentages
24.34% 23.94%
22.58%
20.70%
Companies
INTERPRETATION
From the above graph we found that ICICI PRU mid cap fund scheme has
more risk i.e., 39.41% with less return that is 20.7%, next UTI mid cap fund
scheme has risk i.e., 38.83 % with 24.34% return, then SBI with 33.27%
risk with 23.94% return and HDFC with lowest 31.86% risk and 22.58%
return.
55
SHARPE RATIO ANALYSIS OF MID CAP FUNDS
TABLE:6.19
56
Sharpe ratio analysis of mid cap funds
SHARPE RATIO
SHARPE RATIO
0.49
0.47
0.43
0.330000000000001
Percentages
Companies
INTERPRETATION
From the above graph we can interpret that SBI Magnum mid cap fund
scheme stands 1st as it has highest Sharpe ratio i.e., 0.49 and HDFC Mid cap
fund(G) scheme stands 2nd,next UTI with 0.43 and ICICI PRU with 0.33,
which is the least.
57
OVERALL ANALYSIS OF FUNDS OF AMCS BASED ON SHARPE
RATIO
TABLE:6.20
SHARPE RATIO
COMPANIES
TAX SAVING LARGE CAP MID CAP
FUND FUND FUND
58
Sharpe ratio of all funds
0.49
0.47
0.43
0.35
0.330000000000001
Percentages
0.3
0.26 0.25 0.26
0.23
0.17
0.14
Companies
INTERPRETATION
From the above graph we can interpret that Sharpe ratio of UTI Tax saving
funds, large cap fund and mid cap fund are 0.16, 0.26 and 0.43, ICICI
Prudential are 0.30, 0.23, 0.33, SBI are 0.25, 0.26, 0.49 and Hdfc bank are
0.35, 0.19 and 0.47 respectively.
59
FINDINGS & CONCLUSION
The following gives the AMCs with the highest return under each fund i.e., tax saving
funds, large cap funds and mid cap funds
1. Tax saving fund: HDFC Tax Saver (G)and its return is 18.04%
2. Large cap fund: SBI Blue Chip Fund(G)and its return is 17.8%
3. Mid cap fund: UTI Mid Cap(G)and its return is 24.34%
The following gives the AMCs with the less return under each fund i.e., tax saving
funds, large cap funds and mid cap funds
1.Tax saving fund: UTI Tax saving-Equity long term fund(G)and its return is 10.62%
2. Large cap fund: HDFC Tax Saver (G) and its return is 10.9%
3. Mid cap fund: ICICI PRU Mid Cap Fund(G))and its return is 20.7%
The following AMCs schemes has the highest risk under each fund i.e., tax saving
funds, large cap funds and mid cap funds.
1.Tax saving fund: ICICI PRU Tax saving- long term equity fund(G)and its risk is
26.23%
2.Large cap fund: SBI Blue Chip Fund(G)and its risk is 29.65%
3.Mid cap fund: ICICI PRU Mid Cap Fund(G)and its risk is 39.41%
The following AMCs schemes has the lowest risk under each fund i.e., tax saving funds,
large cap funds and mid cap funds.
1. Tax saving fund: UTI Tax saving-Equity long term fund(G)and its risk is 22.04%Large
cap fund: ICICI PRU Focused Blue chip equity(G)and its risk is 20.19%
2. Mid cap fund: HDFC Mid cap fund(G) and its risk is 31.86%
60
CONCLSION
The performance of the AMC’s scheme has been evaluated with the help of
Sharpe ratio under each fund and the scheme with highest Sharpe ratio is
given the top rank. Top ranked AMC’s scheme under each fund is as
follows,Tax saving fund: HDFC tax saver fund with 0.35,Large cap fund:
UTI equity fund and SBI Blue chip fund with 0.26,Mid cap fund: SBI
Magnum mid cap fund scheme with 0.49
It is found that among the different types of funds Mid Cap funds are
performing well with more returns and more risk. It is also found that SBI
magnum mid cap fund scheme has highest Sharpe ratio i.e., 0.49 and
investing in the same will lead to profit.
SUGGESTIONS
61
1.The investor can take moderate risk to invest in HDFC Tax saver (G)
which gives more return.
2.If an investor likes to take less risk he can invest in ICICI PRU Focused
blue chip equity (G).
4.It is better for the investors to have thorough knowledge about the various
financial services and instruments so that better decisions can be taken.
62
BIBLIOGRAPHY
Books
Websites
https://www.thebalance.com/mutual-funds-4073989
https://www.amfiindia.com/investor-corner/knowledge-center/what-
are-mutual-funds-new.html
https://www.moneycrashers.com/mutual-fund-types-pros-cons/
https://www.getsmarteraboutmoney.ca/invest/investment-products/
mutual-funds-segregated-funds/7-common-types-of-mutual-funds/
https://www.bankbazaar.com/mutual-fund/types-of-mutual-funds.html
https://cleartax.in/s/mutual-fund-types
https://www.hdfcfund.com/learn/beginner/mutual-funds/different-
types-mutual-funds
Journal Articles
1. Dr.Deepak Agarwal , “Measuring performance of Indian
MutualFunds”, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1311961
2. Mr.NarayanRaoSapar, “Performance Evaluation of Indian
MutualFunds”, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=433100
3. D.N. Rao , “A Study of Information Needs of Mutual Funds
Investors & Implications for Web Based Marketing of Mutual
FundProducts”
4. MS Shalini Goyal and MS Dauli Bansal, “A Study of Mutual Funds
in India”,
5. Y prabhavathi and N T Krishna Kishore ,“Investor’s preferences
towards Mutual Fund and Future Investments”, Source-ISSN NO-2250-
3173Meenakshi Garg, “A Study on Performance Evaluations of Selected
Mutual funds in India”
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