%E2%80%9CBuying Behaviour of Investors Towards IPO and NFO%E2%80%9D

A

Summer Project Report On

Buying Behaviour of Investors towards IPO and NFO

Undertaken At

Majura Gate Branch, Surat

IN THE PARTIAL FULFILLMENT OFMASTER OF BUSINESS ADMINISTRATION

DEPARTMENT OF BUSINESS AND INDUSTRIAL MANAGEMENT (DBIM)VEER NARMAD SOUTH GUJARAT UNIVERSITY, SURATYEAR 2007-2008 SUBMITTED TO: PREPARED BY:Dr. Renuka Garg Sudhir BhalaniDepartment Of Business And Industrial ManagementVeer Narmad South Gujarat UniversitySurat.(2008-2010)

CERTIFICATE

This is to certify that Mr. Sudhir Bhalani has successfully completed his project work titled Buying Behaviour of Investors Towards IPO and NFO at NJ India Invest, Majura Gate Branch, Surat, as a part of partial fulfillment of Masters In Business Administration, full time program at Department of Business and Industrial Management, 3rd semester during the academic year 2009.Date: _______________Place: _______________

____________________ ______________Dr. Renuka Garg Dr. Renuka GargHead of the Department Project Guide

Declaration

I, Sudhir Bhalani hereby declare that the study titled Buying Behaviour of Investors towards IPO and NFO is based on my own work. Wherever I have used other works/publications, it has been duly acknowledged at the relevant places. I also assure that the report is prepared as a part of partial fulfillment of Master of Business Administration Program at, Veer Narmad South Gujarat University and the same has not been produced before any other university or college.

Sudhir BhalaniDBIM, Surat

Acknowledgement

It is beyond my word power to express the gratitude and thankfulness I am feeling for Mr. Avinash Chachre at NJ India Invest, Majura Gate Branch, Surat. He has been constant source of information and encouragement to me and has guided and motivated me as and when required. The keen interest evinced by him has helped me in dealing with the problems I face during my work.

I am thankful to other staff members also for giving information about their different products and procedure.

I am very thankful to Dr. Renuka Garg for her regular input during the study. She has shown me the right direction to work and has always helped me by giving suggestions and comments at the right time.

Last but not least I am highly grateful to all those who helped me directly and indirectly in my endeavor.

Executive Summery

This report is on Buying Behaviour of Investors towards IPO and NFO. The survey was done to know the preference of investors between IPO and NFO. It is also an attempt to know the awareness and attitude of investors towards IPO and NFO.The objective is to know the preference of investors between IPO and NFO. To know the level of awareness of IPO and NFO is also one of the objectives of the study. Which one is considered profitable by the investors.I have used the Descriptive Research Design in my study. The sampling method used is Judgmental Sampling method. In this I have taken Target respondents. The sample size is of 100 respondents from diversified area and the data are collected through primary source that is with the help of Questionnaire.I have done the data analysis using SPSS (Stastical Package for Social Science) software. In which I have used Frequency table, Chi-Square test and Factor Analysis to analyze and interpret the data which were collected.I hope the findings of this survey would go a long way in helping the NJ India Invest for better understanding not only existing customer but also potential ones. The finding of the survey may help NJ India Invest to find new customer and to get new business.

INDEX

Chapter No ParticularsPage No.

1.Industrial Profile What is Dairy? Dairy Industry In India History of Indian Dairy Dairy Co-Operative Perspectives Plan 2010 Market Overview SWOT Analysis of Indian Dairy1 9 1124557

2.Company Profile History of Sumul Milestone of Sumul Corporate Office Objective of Sumul Vision of Sumul Board of Directors Organizational Structure Work Map Milk Cycle Product Categories Milk Procurement New Project and Expansion Activities SWOT of Sumul10 2810131414151617171920232426

3.Theoretical Aspects of Project Strategy Strategic Approaches Defining your Comparative Strategy29 42293334

4.Research Methodology Scope of Study Objective of Study Benefits of Study Problem Identification Research Design Data Collection Sampling Design Limitation of Research43 494343444545464749

5.Data Analysis50 109

6.Project Findings110 111

7.Conclusion112

8.Recommendations113 114

Bibliography Web site Books Magazine115

AnnexureI. Questionnaire of ConsumerII. Questionnaire of DistributorsIII. Population Data of SuratIV. Photo of Survey

L IST OF TABLE:TABLE NO PARTICULARSPAGE NO.

5.1Gender50

5.2Age group of respondents51

5.3Income of family52

5.4Education / qualification of respondents 53

5.5No of family members54

5.6Age of family members55

5.7Assets own by respondents56

5.8Expenditure on milk & food item57

5.9Who makes purchases58

5.10Form of milk59

5.11Timing of purchase milk60

5.12Mode of payments61

5.13Currently using brand62

5.14Price of milk63

5.15Purchase frequency64

5.16Source of purchase milk65

5.17Type of milk66

5.18Extra consumption of milk during the various occasions67

5.19Total average consumption68

5.20Usage of milk69

5.21Reason to use particular milk brand75

5.22Reason to non-use particular milk brand81

5.23Income * quantity of milk purchase87

5.24Income * price89

5.25Income * payment cycle90

5.26Income * type of milk91

5.27Income * milk expense92

5.28Income * place of purchase milk cross tabulation93

5.29Income * who make purchase cross tabulation94

5.30Crosstabs no of family member * daily once cross tabulation95

5.31Quantity of milk purchase * timing of purchase milk 96

5.32Education * type of milk98



5.35Quantity of milk purchase * no of family member cross tabulation102

5.36Quantity of milk purchase * timing of purchase milk cross tabulation104

5.37Regression analysis between quantity of milk purchase * no. Family member and infant in family105

5.38Factor analysis106

5.39Comparison of various dealer of packed milk in Surat city107

LIST OF GRAPH:TABLE NO PARTICULARSPAGE NO.

5.1Gender50

5.2Age group of respondents51

5.3Income of family52

5.4Education / qualification of respondents 53

5.5No of family members54

5.6Age of family members55

5.7Assets own by respondents56

5.8Expenditure on milk & food item57

5.9Who makes purchases ?58

5.10Form of milk59

5.11Timing of purchase milk60

5.12Mode of payments61

5.13Currently using brand62

5.14Price of milk63

5.15Purchase frequency64

5.16Source of purchase milk65

5.17Type of milk66

5.18Extra consumption of milk during the various occasions67

5.19Total average consumption68

5.20Usage of milk69-71

5.21Reason to use particular milk brand76-80

5.22Reason to non-use particular milk brand82-86

5.23Income * quantity of milk purchase88

5.24Income * price89

5.25Income * payment cycle90


5.27Income * milk expense92

5.28Income * place of purchase milk cross tabulation93

5.29Income * who make purchase cross tabulation94

5.30Crosstabs no of family member * daily once cross tabulation95

5.31Quantity of milk purchase * timing of purchase milk 97




5.35Quantity of milk purchase * no of family member cross tabulation103

5.36Quantity of milk purchase * timing of purchase milk cross tabulation104

5.37Comparison of various dealer of packed milk in Surat city109

Chapter: 1Industry ProfileIPO:

1.1 What is IPO?Stocks available for the first time are offered through new issue market. The issuer maybe a new company or an existing company.

1.2 Parties involved in the IPO:In the sixties and seventies, public issues were managed by company and its personnel. But, at present public issues involve a number of agencies and parties. They are as following:

Manager to issue:Lead managers are appointed by the company to manage the public issue programmes. Their main duties are, Drafting of prospectus Preparing the budget of expense Suggesting the time of the Public issue Assisting the marketing Advising the company to appoint registrar Directing the various agencies Registrar to issueQuotation containing the details of the various functions they would be performing and charges for them are called for selection. Among them most suitable one is selected. Underwriters:It means that a contract by means of which a person gives assurance to the issuer to the effect that the former would subscribe to the securities offered in the event of non subscription by the person to whom they were offered.

Bankers to issue:Bankers to the issue have the responsibility of collecting the application money along with the application form. Advertising agents:Advertising plays a key role in promoting the public issue. The financial institution:The financial institution generally underwrites the issue and lends term loans to the company.

NFO:

CONCEPT

A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realized is shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. The flow chart below describes broadly the working of a mutual fund:

ORGANISATION OF A MUTUAL FUNDThere are many entities involved and the diagram below illustrates the organizational set up of a mutual fund:

Unit holdersSEBISponsorsTrusteeAMCTransfer agent agagent agentAgentMutual Fund

ADVANTAGES OF MUTUAL FUNDSThe advantages of investing in a Mutual Fund are: Professional Management Diversification Convenient Administration Return Potential Low Costs Liquidity Transparency Flexibility Choice of schemes Tax benefits Well regulated

2.1 TYPES OF MUTUAL FUND SCHEMES

Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial position, risk tolerance and return expectations etc. The table below gives an overview into the existing types of schemes in the Industry.

FREQUENTLY USED TERMS

Net Asset Value (NAV)Net Asset Value is the market value of the assets of the scheme minus its liabilities. The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date.

Sales PriceSales price is the price you pay when you invest in a scheme. It is also called Offer Price. It may include a sales load.

2.3 History of the Indian Mutual Fund Industry

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank the. The history of mutual funds in India can be broadly divided into four distinct phases.

First Phase 1964-87Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets under management.

Second Phase 1987-1993 (Entry of Public Sector Funds)1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Can bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990.

At the end of 1993, the mutual fund industry had assets under management of Rs.47,004 crores.

Third Phase 1993-2003 (Entry of Private Sector Funds)With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of assets under management was way ahead of other mutual funds.

Fourth Phase since February 2003In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.29,835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations.

The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421 schemes.

Chapter: 1

Company ProfileHistory of the companyNJ India Invest, the company established by two youths of Surat and Navsari has today a place in top mutual fund distributors in India. Niraj Choksi of Surat and Jignesh Desai of Navsari together have achieved Great achievements. Mutual funds have become a well-known investment instrument and NJ India Invest is among the top mutual fund distributors. The investment in mutual funds through NJ India Invest has riched 7000 crores.Niraj Choksi completed his schooling from st. zaviers school and B.B.A. from Vidyanagar. He met Mr. Jignesh Desai in Vidyanagar. Mr. Jignesh Desai was there for diploma in civil. Both of them were room partners in a hostel. Mr. Nirajs father Mr. Ravindra was businessman and wanted his son to join his business but Mr. Niraj wanted to set up his own business. He started his career in Baroda sharemarket. On the other hand Mr. Jignesh wanted to do something different. They joined hands and started a share broking office in Surat. They bought a computer and analytical software in 1993 when computers were not used for that purpose. And this made them different from others. They felt that it was riskier to invest in shares than mutual funds. It was the time when mutual funds were unknown for most of the people. They felt that fund managers invest in a particulars company after enough of the research. They started NJ Capital Stock (a share broking company) on 3rd June 1994. Gradually they started decreasing share broking and increasing mutual funds and in 1995-96 they turned to mutual funds. It was the time when there was no need for license. It was the time when investors had lost a lot of money because of Hashad Maheta. Investors had no faith on share market. Mutual funds also were in the same position. On the other hand bank F.D.s and Postal savings were safe and paying a good return. People had not a good opinion about mutual funds. After the 1992 share market was passing through bad days but Mr. Niraj and Mr. Jignesh were sure that it was not because of the mutual funds. Though market is down, it will pay a good return at long run. They started explaining people the reasons of their loss. In such bad condition they collected around 20 lakhs for mutual funds. Mr. Niraj says that the initial three years were very critical, but they did not lose the courage. Step by step they were successful in explaining the people. The market also became favourable. They started spreading their business. Today there are 110 branches in India, in Surat 2 and in Gujarat 20 branches. The company which had started with only three employees has 800 employees today. It has also started NJ Gurukul to train the advisors. NJ has 10,000 advisors today. It also provides personality development programmes to the advisors. There is customer care division for the investors. There is a printing division in NJ for the necessary pamphlets, newsletters and stationery for advisors. The most important thing is that here everything is online. There is RP solution for both customers and employees. NJ has also started its own software company. Because of all these things Njs after sales service is well-known.Mr. Niraj and Mr. Jignesh say that we dont give only the product-brokerage but also the whole recipe and rules. Overview of the companyNJ IndiaInvest Pvt. Ltd. is one of the leading advisors and distributors of financial products and services in India. Established in year 1994, NJ has over a decade of rich exposure in financial investments space and portfolio advisory services. From a humble beginning, NJ over the years has evolved out to be a professionally managed, quality conscious and customer focused financial / investment advisory & distribution firm. NJ prides in being a professionally managed, quality focused and customer centric organisation. The strength of NJ lies in the strong domain knowledge in investment consultancy and the delivery of sustainable value to clients with support from cutting-edge technology platform, developed in-house by NJ. NJ believes in having single window, multiple solutions that are integrated for simplicity and sapience making innovations, accessions, value-additions, a constant process providing customers with solutions for tomorrow which will keep them above the curve, today NJ has over INR 5,050 Crores* of mutual fund assets under advice with a wide presence in over 130 locations* in 22 states* in India. The numbers are reflections of the trust, commitment and value that NJ shares with its clients.With NJ IndiaOnline, the online initiative of NJ, seeks to offer an online platform to customers to transact in financial products. NJ IndiaOnline leverages the strong domain knowledge and the technical expertise of NJ to offer customers with a comprehensive online investment account with truly online trading features and quality portfolio reports. The experience, knowledge and understanding of NJ enable it to provide its clients with the expected value, in an enhanced way. As a leading player in the industry, NJ aspires to successfully meet the expectations of its clients, through meaningful and comprehensive solutions.AMCs with NJ India Invest: Alliance Capital Mutual Fund

Birla Mutual Fund

Cholamandalam Cazenove Mutual Fund

DSP Merrill Lynch Mutual Fund

Dundee Mutual Fund

EscortsMutual Fund

First India Mutual Fund

Franklin Templeton Mutual Fund

Pioneer ITI

HDFC Mutual Fund

HSBC Mutual Fund

IDBI Principal

IL & FS Mutual Fund

ING Savings Trust

JM Mutual Fund

LIC Mutual Fund

Prudential ICICI Mutual Fund

Reliance Capital

SBI Mutual

Standard Chartered Mutual Fund

Sun F&C Mutual Fund

Sundaram Mutual Fund

Tata Mutual

Unit Trust Of India

Zurich India Mutual Fund

Vision of the company: To be the leader in our field of business through, Total Customer Satisfaction Commitment to Excellence Determination to Succeed with strict adherence to compliance Successful Wealth Creation of our CustomersMission of the company: Ensure creation of the desired value for our customers, employees and associates, through constant improvement, innovation and commitment to service & quality. To provide solutions which meet expectations and maintain high professional & ethical standards along with the adherence to the service commitmentsPhilosophy of the company:At NJ our Service and Investing philosophy inspire and shape the thoughts, beliefs, attitude, actions and decisions of our employees. If NJ would resemble a body, our philosophy would be our spirit which drives our body. Service Philosophy: The primary measure of success is customer satisfaction The company is committed to provide its customers with continuous, long-term improvements and value-additions to meet the needs in an exceptional way. In its efforts to consistently deliver the best service possible to its customers, all employees of NJ will make every effort to: think of the customer first, take responsibility, and make prompt service to the customer a priority deliver upon the commitments & promises made on time anticipate, visualize, understand, meet, exceed our customers needs bring energy, passion & excellence in everything we do be honest and ethical, in action & attitude, and keep the customers interest supreme strengthen customer relationships by providing service in a thoughtful & proactive manner and meet the expectations, effectively Investing Philosophy: NJ aim to provide Need-based solutions for long-term wealth creation Nj aims to provide all customers, directly or indirectly, with true, unbiased, need-based solutions and advice that best meets their stated & un-stated needs. In its efforts to provide quality financial & investment advice, NJ believes that Clients want need-based solutions, which fits them Long-term wealth creation is simple and straight Asset-Allocation is the ideal & the best way for long-term wealth creation Educating and disclosing all the important facets which the customer needs to be aware of, is important The solutions must be unbiased, feasible, practical, executable, measurable and flexible Constant monitoring and proper after-sales service is critical to complete the on-going process

The management at NJ brings together a team of people with wide experience and knowledge in the financial services domain. The management provides direction and guidance to the whole organisation. The management has strong visions for NJ as a globally respected company providing comprehensive services in financial sector. The Customer First philosophy is deeply ingrained in the management at NJ. The aim of the management is to bring the best to the customers in terms of Range of products and services offered Quality Customer Service All the key members of the organisation put in great focus on the processes & systems under the diverse functions of business. The management also focuses on utilizing technology as the key enabler for all the activities and to leverage the technology for enhancing overall customer experience. The key members of the management are:Mr. Neeraj Choksi Jt. Managing Director Mr. Jignesh Desai Jt. Managing Director Sales Team:Mr. Misbah Baxamusa National HeadMr. Naveen Rathod V.P.Executive Team:Mr. Shirish Patel Information TechnologyMr. Vinayak Rajput Finance & OperationsMr. Abhishek Dubey Marketing & DevelopmentMr. Viral Shah ResearchMr. Dhaval Desai Human ResourcesPeople & CulturePeople:Enthusiasm, Enterprise, Education and Ethics form the four pillars at NJ. At NJ one can witness the vibrant energy, enthusiasm and the enterprising drive to excel flowing freely throughout the organisation. At NJ can also experience the creativity, one-to-one responsiveness, collaborative approach and passion for delivering value. At NJ people evolve to be more effective, efficient, and result oriented. Knowledge is inherent due to the education-centric approach and the experience in handling different clients groups across diverse product profiles. NJ understands that the people are the most important assets of the company and it is not the company that grows but the people. NJ hence undertakes rigorous training and educational activities for enhancing the entire team at NJ. NJ also believes in the Learning through Responsibility concept for its employees. For people at NJ success is not a new word, but is a regular stepping-stone to realize the one vision that everyone shares. Culture:NJ believes in transforming the lives of our customers. NJ exists to create a difference a change towards a better life. The culture at NJ reflects this responsibility, this dream of transforming lives. And NJ is always excited and enthused in doing so. NJ believes in keeping You First, providing you with products and services that meet your stated and unstated needs. Client satisfaction and client service is the Mantra we constantly recite. This service oriented philosophy runs throughout the organization, from top to bottom. Employees are given ample freedom in their work. The objective is to keep an open, healthy environment with ample scope for enterprise, improvement, innovations and out-of-the box solutions The companys efforts are constantly engaged in improving our existing services, offering new and innovative solutions that go beyond your expectations. This focus has made NJ one of the most respected and preferred service providers, especially in the mutual fund industry.

Service StandardsService in words, service in action Service is the key to unlocking customer satisfaction, which again is key for sustainability of any business. NJ understands this very well. NJ has set strict processes in place to deliver quality services to customers. At NJ strict quality service standards are set and a well-defined process is established and followed religiously by our quality customer service teams. Performance is evaluated on a frequent basis and glitches are ironed out. But quality service also involves quality people in addition to processes. NJ gives significant focus to the proper training and development of the people involved in the service delivery chain. Further NJ, Has well-defined "Privacy Policy" to keep clients information confidential & internal audits done on the same at regular intervals Receives various statistics which are analyzed on an ongoing basis to improve the service standards NJ is committed to improve and enhance its services and undertakes new service initiatives. Such and other services differentiate us with other service providers in the industry. The Service Commitments of the companyThe service commitments are to guide the actions of the people at NJ. Clearly stated, customers can freely communicate any such actions/events wherein they feel that any of the following commitments have been breached / compromised. At NJ we desire to honour our commitments at all points of time and to all our customers without any bias. To provide customer-focussed need-based valued services To provide reliable, accurate and timely information To maintain all records in privacy To optimise services/benefits at least justifiable cost To develop and grow the customers business To provide constructive after sales service To honour our service commitments RecognitionsSome of the awards & recognitions that we have received in past Year 2000:For Outstanding Performance presented by Chairman, Prudential Plc. at London

Year 2002:For Outstanding Performance presented by Group Chief Executive, Prudential Plc. at LondonYear 2003:For Outstanding Performance presented by Group Chief Executive, Prudential Plc. at London

Year 2004:Among Most Valued Business Associates presented by HDFC Standard Life at Edinburgh, Scotland

Year 2004:For Outstanding Performance by Deputy CEO, Prudential Singapore at Malaysia

Year 2006:Award for mobilising the Highest Number of SIPs at National Level by Fidelity Mutual Fund Plc at Mumbai

Year 2006:Award Vietnam

Comments from Industry Stalwarts: The essence of investment consultancy lies in optimal asset allocation as against security selection or timing the markets for clients. NJ understands this very well and has added significant value to the clients through this approach. I am sure with this new initiative; a much larger number of clients will be able to benefit from this approach. I wish them all the best in this initiative - Prashat Jain, CIO, HDFC AMCThe success of any business lies in innovation ahead of times and NJ has proved it time again -Rajan Krishnan, Principal Pnb AMC

NJ Products1. Mutual funds covering all AMCs & all schemes, 2. Life insurance Prudential ICICI 3. Fixed deposits of companies, 4. Government/RBI bonds, 5. Infrastructure Bonds, 6. Approved securities for charitable trusts, etc

Chapter 3RESEARCH METHODOLOGYResearch Problem:Nowadays awareness about mutual funds is increasing. Generally NFO is considered safer than IPO. Its not easy to know about the investors style of investment unless and until some kind of research is not conducted to the investors profile. So in order to solve the problem, I have decided to conduct a research on the Buying Behaviour of Investors towards IPO and NFO.Research Objectives: To know the awareness level of investors towards IPO and NFO. To know the preference level of investors towards IPO and NFO. To know the attitude of investors towards IPO and NFO.

Research Design:I have used the Descriptive Research Design for the purpose of survey as it will enable me to describe the characteristics of a particular individual or a group of people and their tendency towards something and in our case it could be the investment options available. Sampling Method:I would use the method of Judgmental as it would give better idea because we have to focus in target respondents.Sample Size:It would be better to have a sample of 100 people to make research.

Research Instrument: A detailed questionnaire will be used for the purpose of survey and it is attached with this proposal.Data analysis tool: In SPSS I use Frequency table, Chi-Square, Factor analysis.Limitations:The project was carried out on the subject Buying Behaviour of Investors Towards IPO and NFO. During the project following hurdles are faced: Limited time of study. Because of judgmental sampling method it is difficult to target more number of respondents. Some of the respondents are not willing to fill up the questionnaire.

CHAPTER : 4DATA ANALYSIS AND INTERPRETATION(1) Do you like to save your money? OptionSave Money

yes100

No

GRAPH:

Interpretation:All Respondents are interested in saving their money. We can see from the table that all the respondents have chosen the option yes for the question Do you like to save your money?. It shows that they are 100% interested in saving money.

(2) Please tick mark in proper box keeping in mind your position about IPO and NFO. OptionAwareInvest

IPO5562

NFO3052

GRAPH:

Interpretation:-From the above table & graph we can see that 55% are aware about IPO and 30% are aware about NFO out of 100 respondents and from these respondents 62% are investing in IPO and 52% are investing in NFO.

Cross tab of IPO Investment

IPO InvestmentTotal

Not InvestInvest

Age20-30213758

31-40121830

41-50369

>50213

Total3862100

GRAPH:00002112323837186162583093100020406080100120ageTotalIPO not investIPO invest Total investor20-3031-4041-50>50

Chi-Square Tests

ValueDFAsymp. Sig. (2-sided)

Pearson Chi-Square1.260(a)3.739

Likelihood Ratio1.2223.748

Linear-by-Linear Association.3801.537

N of Valid Cases100

Interpretation:Explanation of pearsons chi-square:The Chi-square test is carried out at 95% confidence level (0.05 significance level). The Pearson Chi-square value comes out as a probability of 0.739 which is greater than significance level of 0.05, it means there exist no significant difference between IPO investment and age.Here we conclude that there exist no significant difference between IPO investment and age.

Cross tab of NFO investment

NFO InvestTotal

Not InvestInvest

Age20-30283058

31-40161430

41-50459

>5033

Total4852100

GRAPH:-

Chi-square TestsValueDFAsymp.sig (2-sided)

pearson chi-square3.15830.369


Linear-by-Linear Assocition0.7410.39

N of valid cases100

Interpretation:Explanation of Pearsons chi-square:The Chi-square test is carried out at 95% confidence level (0.05 significance level). The Person Chi-square value comes out as a probability of 0.369 which is greater than significance level of 0.05, it means there exist no significant difference between NFO Investment and Age.Here we conclude that there exist no significant difference between NFO Investment and Age.

(3) How much percentage (%) of your savings you would like to invest in IPO and NFO? ProportionIPONFOOTHERS

5% - 10%371526

11% - 15%263631

16% - 20%7524

Above 20%4311

GRAPH:-

Interpretation:-From the above table & graph we can see that 37%, 15% and 26% of respondents are investing in IPO, NFO & OTHERS of the proportion of 5% - 10% than after 26%, 36% and 31% are the proportion of 11% - 15% than after 7%, 5% and 24% are in the proportion of 16% - 20% and the last is the only 4%, 3% and 11% are in the proportion of Above 20% of their savings.

Cross tab of Proportion of Investment in IPO

IPOTotal

05% to 10%11% to 15%16% to 20%Above 20%0

Income0 - 60,000130015

60,001 - 1,20,000101561133

1,20,001 - 1,80,00011774029

>1,80,001412132233

Total26372674100

GRAPH:-

020406080100120IPOTotalincomeTotal

Chi-Square Tests




Linear-by-Linear Association2.9381.087

N of Valid Cases100

Interpretation:

Explanation of Pearsons chi-square:The Chi-square test is carried out at 95% confidence level (0.05 significance level). The Person Chi-square value comes out as a probability of 0.083 which is bit greater than significance level of 0.05, it means exist no significant between Investment proportion in IPO and Income.Here we conclude that there exist no significant difference between Investment proportion in IPO and Income.

Cross tab of proportion of Investment in NFO

NFOTotal

05% to 10%11% to 15%16% to 20%above 20%0

Income0 - 60,000310105

60,001 - 1,20,000136111233

1,20,001 - 1,80,00014581129

>1,80,001113172033

Total41153653100

GRAPH:-

Chi-Square Tests





N of Valid Cases100

InterpretationExplanation of Pearsons chi-square: The Chi-square test is carried out at 95% confidence level (0.05 significance level). The Person Chi-square value comes out as a probability of 0.443 which is greater than significance level of 0.05, it means exist no significant between Investment proportion in NFO and Income.Here we conclude that there exist no significant difference between Investment proportion in NFO and Income.

Cross tab of proportion of Investment in Others

OTHERTotal

05% to 10%11% to 15%16% to 20%above 20%0

Income0 - 60,000023005

60,001 - 1,20,00015129633

1,20,001 - 1,80,00017107429

>1,80,00161268133

Total826312411100

GRAPH:-

Chi-Square Tests




Linear-by-Linear Association5.1551.023

N of Valid Cases100

Interpretation:Explanation of Pearsons chi-square:The Chi-square test is carried out at 95% confidence level (0.05 significance level). The Person Chi-square value comes out as a probability of 0.093 which is bit greater than significance level of 0.05, it means exist no significant between Investment in Other options and Income.Here we conclude that there exist no significant difference between investment in other options and Income.

(4) How much return you expect from your investment in IPO & NFO?

ReturnIPONFOOTHERS

10% - 20%14865

20% - 30%463419

30% - 40%8136

40% - 50%73

GRAPH:-

Interpretation:-From the above table & graph we can see that 14% , 8% and 65% of respondents are investing in IPO, NFO & OTHERS of the proportion of 10% - 20% than after 46%, 34% and 19% are the proportion of 20% - 30% than after 8%, 13% and 6% are in the proportion of 30% - 40% and the last is the only 7% and 3% are in the proportion of 40% - 50% of their savings. Cross tab of Return Expect in IPO

Age & return Expect in IPOTotal

010 to 20%20 to 30%30 to 40%40 to 50%0

Age20-301213292258

31-4091115430

41-50205119

>50201003

Total25144687100

GRAPH:-

Chi-Square Tests





N of Valid Cases100

Interpretation:

Explanation of pearsons chi-square: The Chi-square test is carried out at 95% confidence level (0.05 significance level). The Person Chi-square value comes out as a probability of 0.093 which is bit greater than significance level of 0.05, it means exist no significant between Return in IPO and Age.Here we conclude that there exist no significant difference between Return in IPO Investment and Age.

Cross tab of Return Expect in NFO

Age & return Expect in NFOTotal

010 to 20%20 to 30%30 to 40%40 to 50%0

Age20-30217218158

31-40161103030

41-50502119

>50001113

Total42834133100

GRAPH:

Chi-Square Tests





N of Valid Cases100

Interpretation:

Explanation of Pearsons chi-squareThe Chi-square test is carried out at 95% confidence level (0.05 significance level). The Person Chi-square value comes out as a probability of 0.066 which is bit greater than significance level of 0.05, it means exist no significant between Return in NFO Investment and Age.Here we conclude that there exist no significant difference between Return in NFO Investment and Age.

Cross tab of Return Expect in OTHER

Age & Return Expect in OtherTotal

010 to 20%20 to 30%30 to 40%0

Age20-308387558

31-402198130

41-5006309

>5002103

Total1065196100

GRAPH:-

Chi-Square Tests





N of Valid Cases100

Interpretation:

Explanation of pearsons chi-square: The Chi-square test is carried out at 95% confidence level (0.05 significance level). The Person Chi-square value comes out as a probability of 0.552 which is greater than significance level of 0.05, it means exist no significant between Return of Investment in Other options and Age.Here we conclude that there exist no significant difference between Return of Investment in Other options and Age.

(5) What would be your preference if you want to invest in IPO & NFO or both?

OptionIPONFOBOTH

Short Term2556

Long Term24316

GRAPH:-

Interpretation:-From the table & graph we can see that 25% of the respondents are investing in Short Term IPO and 24% respondents are investing in Long Term IPO while only 5% of respondents are investing in Short Term NFO and 31% respondents are investing in Long Term NFO and in BOTH only 6% are invest.

(6) Rate the following statement.

PARTICULARIPO better than NFONFO bett-er than IPONF managed professionalComp-any name imp't in NFOTaxs affet-ts decisionNFO safe than IPORetu-rn in IPO moreTranerability easy in IPOIn IPO transaction cost affectNFO liquid more than IPOEntry/Exit barrier NFO make it unattractedExpectation of return in NFO satisfied than IPO

Strongly Disagree83252352205

Disagree142338401436152012

Neither Agree or Disagree18342332138142942454039

Agree291847351658345016352029

Strongly Agree2922272563449141315

FACTOR ANALYSISKMO and Bartlett's TestKaiser-Meyer-Olkin Measure of Sampling Adequacy..782

Bartlett's Test of SphericityApprox. Chi-Square552.101

DF66

Sig..000

Communalities InitialExtraction

IPO>NFO1.000.679

NFO>IPO1.000.712

NFO Managed Prof'l1.000.745

Company name 1.000.777

Taxes1.000.733

NFO is safer1.000.567

Return in IPO1.000.535

Transf IPO easy1.000.663

T.Cost affect1.000.586

NFO Liquidity1.000.614

Entry Barrir1.000.641

Satishfied Return1.000.631

Total Variance ExplainedComponentInitial EigenvaluesExtraction Sums of Squared LoadingsRotation Sums of Squared Loadings

Total% of VarianceCumulative %Total% of VarianceCumulative %Total% of VarianceCumulative %

14.76039.66339.6634.76039.66339.6633.20226.68426.684

21.84715.38855.0511.84715.38855.0513.10025.83452.518

31.27710.64165.6931.27710.64165.6931.58113.17565.693

4.8727.26772.959

5.7476.22279.182

6.5974.97784.159

7.4743.95388.112

8.4203.50391.615

9.3673.05694.671

10.2682.23796.908

11.2211.83998.747

12.1501.253100.000

Component Matrix (a)

Component

123

IPO>NFO-.801-.144.126

NFO>IPO.833-.125.055

NFO Managed Prof'l.730-.326.327

Company name .692-.154.524

Taxes.085.563.640

NFO is safer.467-.590.013

Return in IPO-.579-.342.287

Transf IPO easy-.503-.281.575

T.Cost affect.371.652.154

NFO Liquidity.742.239-.081

Entry Barrir-.563.561.100

Satishfied Return.770.152-.119

Rotated Component Matrix (a)

Component

123

IPO>NFO-.433-.695-.090

NFO>IPO.683.494.041

NFO Managed Prof'l.839.180.089

Company name .801.127.345

Taxes.019-.025.855

NFO is safer.667.044-.346

Return in IPO-.095-.720-.087

Transf IPO easy.048-.795.170

T.Cost affect-.037.479.596

NFO Liquidity.357.674.182

Entry Barrir-.670-.186.398

Satishfied Return.409.674.098

Component Transformation Matrix

Component123

1.708.698.104

2-.560.467.684

3.430-.543.722

Interpretation: From the above table we have come to know that from various parameters the investors have selected some major parameters which are very essential for any investors who invest in IPO or NFO. These all parameters help the investors to take decision whether to invest in IPO or NFO with existing portfolio or not.So, on the basis of these parameters the investors choose their investment pattern and it will also guide them also. So, here the most important parameters investors preferred is as under:1st componentNFO managed by professional, Company Name.2nd componentLiquidity and the satisfied return are most probably same.3rd componentThe taxes.So, these are the parameters are investors chosen while investing in IPO or NFO.(7) Which criteria will you consider important while you investing in IPOs or NFOs? (Give RANK i.e. 1, 2, 3, 4, 5, 6) (1 is the Most Important & 6 is the Least Important)

IPONFO

RankRiskTimeReturnSafetyPrice BandCompany NameRiskTimeReturnSafetyPrice BandCompany Name

110683611691737

2377741341143346

3107341523211115533

4551838518181192

545036711252552

652385224438

FACTOR ANALYSISKMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy..811

Bartlett's Test of SphericityApprox. Chi-Square1092.930

DF66

Sig..000

Communalities

InitialExtraction

IPO-risk10.699

Time10.819

Return10.704

Safety10.716

Price band10.572

Company Name10.645

NFO-risk10.69

Time10.9

Return10.821

Safety10.816

Price band10.744

company Name10.45

Total Variance Explained

ComponentInitial EigenvaluesExtraction Sums of Squared LoadingsRotation Sums of Squared Loadings

Total% of VarianceCumulative %Total% of VarianceCumulative %Total% of VarianceCumulative %

16.41853.48553.4856.41853.48553.4855.04942.07942.079

22.15717.97871.4632.15717.97871.4633.52629.38471.463

3.9808.16479.627

4.6835.69185.318

5.4683.89989.217

6.3462.88392.101

7.2982.48094.581

8.2241.86996.450

9.1701.41797.867

10.115.95898.826

11.088.73599.560

12.053.440100.000

Component Matrix (a)

Component

12

IPO-risk-.495.674

Time-.804.415

Return-.698.465

Safety-.789.305

Price band-.298.695

Company Name-.798.091

NFO-risk.788.264

Time.894.318

Return.802.421

Safety.833.349

Price band.839.200

Company Name.481.468

Rotated Component Matrix (a)

Component

12

IPO-risk-.025.836

Time-.427.798

Return-.311.779

Safety-.477.699

Price band.149.741

Company Name-.606.527

NFO-risk.799-.229

Time.916-.245

Return.900-.108

Safety.884-.185

Price band.804-.311

Company Name.661.113

Component Transformation Matrix

Component12

1.824-.567

2.567.824

Interpretation:From the above table we have come to know that from various parameters the investors have selected some major parameters which are very essential for any investors who invest in IPO or NFO. These all parameters help the investors to take decision whether to invest in IPO or NFO with existing portfolio or not.So, on the basis of these parameters the investors choose their investment pattern and it will also guide them also. So, here the most important parameters investors preferred is as under,In IPO,1st componentSafety and Return.2nd componentRisk, Time, Return and Price Band.

In NFO,1st componentTime and Return.2nd componentTime and Risk.So, these are the parameters are investors chosen while investing in IPO or NFO.

Chapter:-5FINDINGS Out of 100 respondents 62 are aware about IPO and in that 55 are investing in IPO. Out of 100 respondents 30 are aware about NFO and in that 52 are investing in NFO. In IPO 37 respondents out of 100 investing in proportion of 5% to 10% from their savings. In NFO 36 respondents out if 100 investing in proportion of 11% to 15% from their savings. The return in IPO, 46% of respondents are expect 20% to 30% return from their investment. In NFO also 34% of respondents are expect same return as in IPO. 25% of respondents are investing in Short Term IPO and in NFO only 5% of respondents are invest in Short Term NFO. In IPO 24% of respondents are invest in Long Term and NFO 31% of respondents are invest in Long Term. In IPO, 29% respondents are Strongly Agree that IPO is better than NFO. In NFO 34% respondents are neutral that NFO is better than IPO. 47% respondents are believes that NFO is managed by professional managers. Respondents are agree that Company name is important in NFO. Most of the respondents are agreed that Transferability is easy in IPO. Respondents are neutral about that liquidity in IPO and NFO. In IPO, Most of the respondents are prefer Price Band as a important criteria for investment. while in NFO most of respondents are prefer company name. In NFO most of respondents are prefer company name.

Chapter:-6Conclusion Most of the respondents are aware about IPO and they are investing in it. Compare with IPO, NFO is not as popular as IPO so less no. of respondents are investing in it. People are taking less risk in NFO that is they investing more no. of proportion in it and regardless they have reasonable in invest in NFO. In terms of return the people are expect higher return in IPO compare to NFO. For investment the most of the respondents are preferred Medium Term investment. To prefer which is better, the respondents are preferred IPO is better than NFO.

Chapter:-7RECOMMENDATION Only 30% respondents are aware about NFO, so more focus on that compare to IPO. Company should improve its advertising in NFO. NFO agents Provide help in selecting the best NFO for investment.

Chapter:-8BIBLIOGRAPHYBOOKS: Punithavathy Pandian(2007), Security Analysis & Portfolio Management, Vikas Publishing Housing Pvt. Ltd. AMFI Module. Donald R Cooper & Pamela S Schindler(2003), Business Research Methods, Tata McGraw-Hill, New York.

QUESTIONNAIRE

I am Sudhir Bhalani, a student of MBA studying at D.B.I.M. Surat. I have prepared this questionnaire for the project work on Buying Behaviour of Investors Towards IPO and NFO.It is meant for educational purpose only.

I ensure you to maintain highest degree of confidentiality.

1. Do you like to save your money?

1. Yes 2. No

2. Please tick mark in proper box keeping in mind your position about IPO and NFO.OPTIONAWARENESSINVESTMENT

IPO

NFO

3. How much percentage (%) of your savings you would like to invest in IPOs and NFOs?

PROPORTION OF INVESTMENTIPONFOOTHERS

5% to 10%

11% to 15%

16% to 20%

Above 20%

4. How much return do you expect from your investment in IPO & NFO?

RETURN ON INVESTMENTIPONFOOTHERS

10 to 20%

20 to30%

30 to 40%

40 to 50%

5. What would be your preference if you want to invest in IPOs and NFOs or both?

OPTIONSHORT TERMLONG TERM

IPO

NFO

BOTH

6. Rate the following statement

Sr.No.

Statement

StronglyDisagreeDisagree

Neither AgreeNor DisagreeAgree

Strongly Agree

1

Do you think IPO is better than NFO?

2

Do you think NFO is better than IPO?

3

Do you think NFO is managed by professionals, so it is better than IPO?

4

Company name is important in NFO than IPO.

5

Taxes affect my decision.

6 Investment in NFO is safer than IPO.

7Return in IPO is more than NFO.

8

Transferability in IPO is easier than NFO.

9 In IPO Transaction cost affects my decision.

10In NFO liquidity more compare to IPO.

11Entry or Exit barrier on NFO makes it unattractive compare to IPO for investment.

12

Your expectation of return from investment in NFO is more satisfactory than IPO.

7. Which criteria will you consider important while investing in IPOs or NFOs? (Give Rank i.e. 1,2,3,4,5,6) ( 1 is the Most Important & 6 is the Least Important )

OPTIONIPONFO

Risk

Time

Return

safety

Price Band

Company Name

Personal details:

Name: ____________________________________________________________________

Address: ___________________________________________________________________

Contact No: _________________________________________________________________

Age Group: 1. 20 to 30 years 3. 41 to 50 years 2. 31 to 40 years 4. 50 above Occupation: 1. Student 4. Professional 2. Businessman 5. Others 3. Service classHousehold yearly Income: 1. 0 60,000 3. 60,001 - 1,20,000

2. 1,20,001 - 1,80,000 [ 4. >1,80,001

THANK YOU

Documents

%E2%80%9CBuying Behaviour of Investors Towards IPO and NFO%E2%80%9D