IIFL PART - A

8/2/2019 IIFL PART - A

1/30

IMPACT OF FII 0N INDIAN STOCK MARKET

1. INDUSTRY PROFILE:

India's tradition in trading of securities goes back to the 18th century, when loan

securities of the East India Company were traded. Corporate shares came into existence in

1830s. With development of telegraph and communication systems brokerage business

increased and there were as many as 60 brokers in 1860. The Bombay Stock Exchange, the

oldest in Asia, was set up in 1887 as the ``Native Share and Stock Brokers Association''.

After the Second World War with business coming back into stream, many more stock

exchanges were established.

In 1956 the government brought a legislation to govern the stock exchanges --

Securities Contract Regulation Act (SCRA), 1956. Today the Indian stock exchanges are

regulated by Ministry of Finance, Security and Exchange Board of India (SEBI) and

Governing Boards within the legal framework provided by the SCRA, 1956 and SEBI Act

1992.

The market in India during the period upto 1990 was dominated by the scripts that

came in from the New Issue Market. Another feature of the market during this period was thelarge number of new companies coming up with public issues. The Government owned

institutions insisted that wherever they lent money to projects, the shares of that company had

to be listed. Hence listing became a necessary evil rather than a privilege which it should be.

As we moved into the 90's we had a market which was growing at a fast pace but was very

domestic in nature and not subject to free market dynamics.

The reforms in the Indian economy ushered during 1991 affected the Indian stock

markets as they did many other aspects of economic activities. Until the beginning of thisdecade, foreign portfolio investment was not permitted into the stock market. This resulted in

India being ignored in the huge global flows of money. Realizing the role such investments

could play in the growth of the markets and the economy, the government has now permitted

Foreign Institutional Investors to invest directly into the stock market. As the regulations

stand today, FIIs can invest upto 30 per cent in the stocks of Indian companies.

While foreign portfolio investment has come into the market, Indian shares were also

permitted to be traded abroad. The GDR mechanism has been used to list and trade top Indian

HKBK COLLEGE OF ENGG Page 1
http://www.indiainfoline.com/


2/30


companies on London and other bourses. This again globalizes the Indian stock market on

account of arbitrage.

Another significant aspect of globalization is the entry of foreign brokers. In a dramatic

move the foreign broker firms have been allowed to set up branches in India. These firms are

now extremely active both in research and trading. They have brought in considerable

expertise into the stock markets. However their entry has created issues for the domestic

brokers who are now reeling under the competition.

Another significant new development has been the abolition the Controller of Capital

Issues (CCI). Prior to 1992, CCI -- a part of the Ministry of Finance -- set the pricing of

issues. This was much lower than the market price. All this meant that the secondary market

became a haven for quick profit taking. This is also meant that top class companies hardly

ever approached the market as they did not want their shares to be given away cheap.

However free pricing changed all this. On one side we have seen Indian investors waking up

to the reality of making losses in the secondary market. On the positive side many large

companies have come forward and issued their shares to the Indian investors.

Prior to the Reforms the Indian companies were characterized by a very large number

of shareholders holding small quantities of shares. The institutionalization was not much and

even where it existed, the term lending institutions like IDBI, IFCI and ICICI were theshareholders and these institutions never traded their stocks. However the Reforms brought it.

Not only Fijis -- whose role has been discussed earlier -- but also allowed the entry of Private

Sector into the Mutual Fund industry. This has seen a large increase in the number of

institutions in the secondary market.

It will not be an exaggeration to say that in less than a decade we have seen a major

change from retail ownership of stocks to its institutionalization. Before National Stock

Exchange (NSE) came into existence the BSE catered to more than two-thirds of the tradingactivities, but today the main stock exchange is the NSE. With the fear of competition from

the NSE, BSE also started implementing the idea of computerization.

In 1992, NSE was incorporated with equity of Rs 25 crores. The intention was to have

computerized systems, hooked nation-wide via satellite to increase the scope and depth of the

market. This dream finally came true towards the end of 1994. This stock exchange has

adopted the principle of being an order driven market.



3/30


Anywhere in India the broker on connecting his terminal with the main terminal

through a VSAT, can enter buy-and-sell orders. The computer will scan the transactions

within 30 seconds and transaction is executed and unmatched orders stored in the memory.

This eliminated the role of the jobbers.

As India complete 58 years of a free India and move towards a truly global India of the

21st century, the agenda for the stock market is one of consolidation. There are still some

issues that need to be ironed out. India needs a modern system of trading and holding shares.

The creation of the National Securities Depository Limited (NSDL) is a major move which

would lead the market quickly towards paperless trading.

We need to have a good Debt Market. Though a lot of debt scripts are in the market, there

is hardly any trading. The opening up of debt to foreign investors, the creation of money

market funds and possible introduction of derivatives would give the Debt Market its due

place in the financial system. India has a very old stock market. There is enough reason for us

to believe that the ``Old is now turning to Gold''.

2. COMPANY PROFILE:

2 (a). Background and Inspection of the companyIndia Infoline founded in 1995 by Mr. Nirmal Jain (Chairman and Managing Director)

as an independent business research and information provider. India Infoline gradually

evolved into a one-stop financial services solutions provider. Our strong management team

comprises competent and dedicated professionals.

India Infoline a pan-India financial services organization across 1,361 business locations

and a presence in 428 cities. Our global footprint extends across geographies with offices in

New York, Singapore and Dubai. We are listed on the Bombay Stock Exchange (BSE) and

the National Stock Exchange (NSE).



4/30


We offer a wide range of services and products comprising broking (retail and

institutional equities and commodities), wealth management, credit and finance, insurance,

asset management and investment banking.

We are registered with the BSE and the NSE for securities trading, MCX, NCDEX andDGCX for commodities trading, CDSL and NSDL as depository participants. We are

registered as a Category I merchant banker and are a SEBI registered portfolio manager. We

also received the FII license in IIFL Inc. IIFL Securities Pte Ltd received approval from the

Monetary Authority of Singapore to carry out corporate advisory and dealing in securities

operations. Two subsidiaries India Infoline Investment Services and Moneyline Credit

Limited are registered with RBI as non-deposit taking non-banking financial services

companies. India infoline Housing Finance Ltd, the housing finance arm, is registered with

the National Housing Bank.

Milestones

1995

Incorporated as an equity research and consulting firm with a client base that included

leading FIIs, banks, consulting firms and corporates.

1999

Restructured the business model to embrace the internet. Launched archives

.indiainfoline.com mobilized capital from reputed private equity investors.

2000

Commenced the distribution of personal financial products; launched online equity trading;

entered life insurance distribution as a corporate agent. Acknowledged by Forbes as Best of

the Web and ...must read for investors.

2004

http://archives.indiainfoline.com/http://archives.indiainfoline.com/http://www.indiainfoline.com/http://archives.indiainfoline.com/http://archives.indiainfoline.com/


5/30


Acquired commodities broking license; launched Portfolio Management Service.

2005

Listed on the Indian stock markets.

2006

Acquired membership of DGCX; launched investment banking services.

2007

Launched a proprietary trading platform; inducted an institutional equities team; formed a

Singapore subsidiary; raised over USD 300 mn in the group; launched consumer finance

business under the Moneyline brand.

2008

Launched wealth management services under the IIFL Wealth brand; set up India Infoline

Private Equity fund; received the Insurance broking license from IRDA; received the venture

capital license; received inprinciple approval to sponsor a mutual fund; received Best broker-India award from FinanceAsia; Most Improved Brokerage- India award from Asiamoney.

2009

Received registration for a housing finance company from the National Housing Bank;

received Fastest growing Equity Broking House - Large firms in India by Dun &

Bradstreet.

2010

Received in-principle approval for membership of the Singapore Stock Exchange.

Received membership of the Colombo Stock Exchange .

2011

Received Best broker- India award from FinanceAsia; Best Broking House with Global

Presence award from D&B Best Wealth Management House in India Award from Asset



6/30


Asian Awards (Triple A)

2(b). NATURE OF THE BUSINESS CARRIED

Not everybody is an Investment professional, there is always a need for someone who

can guide investors through the complex maze of investment options with unbiased and

expert who would understand the needs of the investor and help him achieve his financial

goals.

INDIAINFOLINE is one such financial service organization, catering to

requirements of individuals and institutions by providing a broad spectrum of value added

products and services for both of them.

INDIAINFOLINE is the Investment consultancy providing Advisory and Investment

facilitation services to retail investors, corporate and institutions. The range of products on

offer includes1) Wealth Management Services.

2) Portfolio Management.

3) Securities Broking.

4) The investment Advisory and Broking (IAB).

5) Credit And Finance.

6) Insurance.



7/30


IndiaInfoline is a wealth management Company. It is one stock shop for all investment needs

for the Indian retail investors, from advice to execution online as well as offline. They deal

with Equity trading, all investment for products, tax saving, investment insurance plan etc.

From advice to execution in financial services.

2(c). Vision, Mission and Quality policy

IndiaInfoline Vision

To become the most respected company in the financial service space.

IndiaInfoline Mission

To become a full fledged financial services company known for its quality of advice,

personalized service and cutting edge technology.

Quality policy

To achieve and retain leadership, IIFL shall aim for complete customer satisfaction, by

combining its human and technological resources, to provide superior quality financial


Information and

Executionand

Commoditi

Insurance

Mutual

Equities


8/30


resources in the process IIFL will strive to exceed customer expectations and getting high

value returns to the customers.

2(d). PRODUCTS/SERVICES PROFILE

Equities

Indiainfoline provided the prospect of researched investing to its clients, which was hitherto

restricted only to the institutions. Research for the retail investor did not exist prior to

Indiainfoline. Indiainfoline leveraged technology to bring the convenience of trading to the

investors location of preference (residence or office) through computerized access.Indiainfoline made it possible for clients to view transaction costs and ledger updates in real

time.

IIFLs analyst team won Zee Business Indias best market analysts awards 2009 for

being the best in the Oil and Gas and Commodities sectors and a finalist in the Banking and

IT sectors.

Portfolio Management ServiceOur Portfolio Management Service is a product wherein an equity investment portfolio is

created to suit the investment objectives of a client. We at Indiainfoline invest your resources

into stocks from different sectors, depending on your risk-return profile. This service is

particularly advisable for investors who cannot afford to give time or don't have that expertise

for day-to-day management of their equity portfolio.

ResearchSound investment decisions depend upon reliable fundamental data and stock selection

techniques. Indiainfoline Equity Research is proud of its reputation for, and we want you to

find the facts that you need. Equity investment professionals routinely use our research and

models as integral tools in their work.

They choose Ford Equity Research when they can clear your doubts.

Commodities

Indiainfolines extension into commodities trading reconciles its strategic intent to emerge as



9/30


a one-stop solutions financial intermediary. Its experience in securities broking has

empowered it with requisite skills and technologies. The Companys commodities business

provides a contra-cyclical alternative to equities broking. The Company was among the first

to offer the facility of commodities trading in Indias young commodities market (the MCXcommenced operations only in 2003). Average monthly turnover on the commodity

exchanges increased from Rs 0.34 bn to Rs 20.02 bn. The commodities market has several

products with different and non-correlated cycles. On the whole, the business is fairly

insulated against cyclical gyrations in the business.

MortgagesDuring the year under review, Indiainfoline acquired a 75% stake in Moneytree Consultancy

Services to mark its foray into the business of mortgages and other loan products distribution.

The business is still in the investing phase and at the time of the acquisition was present only

in the cities of Mumbai and Pune. The Company brings on board expertise in the loans

business coupled with existing relationships across a number of principals in the mortgage

and personal loans businesses. Indiainfoline now has plans to roll the business out across its

pan-Indian network to provide it with a truly national scale in operations.

Insurance

IIFL entered the insurance distribution business in 2000 as ICICI Prudential Life Insurance

Co. Ltds corporate agent. Later, it became an Insurance broker in October 2008 in line with

its strategy to have an open architecture model. The Company now distributes products of

major insurance companies through its subsidiary India Infoline Insurance Brokers Ltd.

Customers can choose from a wide bouquet of products from several insurance companies

including Max New York Life Insurance, MetLife, Reliance Life Insurance, Bajaj Allianz

Life, Birla Sunlife, Life Insurance Corporation, Kotak Life Insurance and others.

Credit & Finance



10/30


IIFL offers a wide array of secured loan products. Currently, secured loans (mortgage loans,

margin funding, loans against shares) comprise 94% of the loan book. The Company has

discontinued its unsecured products. It has robust credit processes and collections mechanismresulting in overall NPAs of less than 1%. The Company has deployed proprietary loan-

processing software to enable stringent credit checks while ensuring fast application

processing. Recently the company has also launched Loans against Gold.

2(e). AREA OF OPERATION

IndiaInfoline services are available through IndiaInfoline strong network of 1361

Business Locations spanning 428 cities and towns in the country and in some of the

foreign countries also .

IndiaInfoline is functioning in the following cities of India

It service is divided into four zones namely North, East, West and Southern zones of

India.

In North

1) Uttar Pradesh: Agra, Allahabad, Gorakhpur, Ghaziabad, Khanpur, Lucknow,

Varanasi.

2) Haryana: Ambala, Gurgaon, Karnal, panipat, Rewari, Sonipat.

3) Delhi : Delhi, Punjabi Bagh, Preet vihar, Noida, Faridabad.

4) Punjab: Amritsar, Jalandhar, Chandigarh, Ludhiana, Mohali, Patiala.

5) Himachal Pradesh: Shimla.

In East

1) Gujrat: Ahmadabad, Baroda, Gandhinagar, Godhra, Jamnagar, Mathura, Surat.

2) Rajastan: Ajmer, Bikaner, Jaipur, Jodhpur, Udaipur.

3) Madhya Pradesh: Bhopal, Gwalior, Indore, Jabalpur, Ujjain.

4) Maharashtra: Kolhapur, Mumbai , Nagpur, Nasik, Pune, Thane.



11/30


In West

1) West Bengal: Barrackpur, Durgapur, Kolkata , Howrah, Haldia, Raiganj.2) Chhattisgarh: Bhilai, Bilaspur, Korba, Raipur.

3) Orissa: Bhubaneshwar, Cuttack, Rourkela, Sambalpur, Saltlake.

4) Bihar: Bhagalpur, Gaya, Muzzafarpur, Patna.

In South

1) Karnataka: Bangalore, Bellary, Gulbarga, Hassan, Mangalore, Mysore, Tumkur,Hubli.

2) Tamilnadu: Chennai, Coimbatore, Hosur, Kanchipuram, Vellore, Salem, Madurai,

Pondicherry.

International Branches:

IndiaInfoline has its business operations in some of the foreign countries like:

1. Singapore.

2. Dubai.

3. U.S.A.

4. China.

5. Brazil.

6. Russia.

7. U.K

2(f). OWNERSHIP PATTERN

TABLE NO- 01

PARTICULARS NUMBER OF PERCENTAGE



12/30


SHARESFOREIGN 78232566 27.60%

INSTITUTIONS 57843332 20.40%GOVT HOLDING 0 0.00% NON PROMOTER

CORPORATE HOLDING 11528968 4.10%PROMOTERS 95655532 33.80%

PUBLIC AND OTHERS 40139602 14.20%

TOTAL 283400000 100%

2(g). COMPETITORS INFORMATION

TABLE NO - 02 ( In Crores)

COMPANY

Last

Price

Market

Cap.

(Rs. cr.)

Sales

Turnover

Net

profit

Total

Assets

Indiabulls 203.20 6,327.69 2,049.70 608.69 20,740.20Edelweiss Cap 33.05 2,500.72 448.74 58.72 4,919.13India Infoline 70.90 2,048.23 729.54 122.36 1,554.51Motilal Oswal F 119.10 1,728.37 49.85 42.65 512.58Delta Corp 75.30 1,685.69 261.63 128.63 660.09Pilani Invest 1,667.55 1,318.82 48.39 43.92 651.91SKS Microfin 127.95 925.81 1,245.47 111.63 4,016.87Future Capital 127.75 827.80 238.54 55.26 3,303.65Network 18 43.05 615.10 39.91 -69.13 1,537.40Geojit BNP 20.60 470.42 233.62 48.73 356.50Nalwa Sons Inv 755.30 387.93 18.66 15.64 295.64Kirloskar Broth 700.00 370.21 30.57 28.88 111.83Money Matters 95.35 332.57 478.32 84.26 774.64The Byke Hosp 110.30 221.14 33.24 2.27 63.80Consol Finvest 54.00 174.56 22.05 21.39 342.95Emkay Global 38.00 92.86 117.92 8.33 140.46Microsec Fin 27.35 87.00 27.13 17.99 207.55Aditya Birla 15.70 86.98 98.90 -9.46 90.39Dhunseri Invest 66.30 38.82 15.87 13.12 171.07Indbank Merchan 7.50 33.28 6.29 -9.93 40.56Keynote Corp Se 38.35 26.92 15.26 7.20 42.06

http://www.moneycontrol.com/india/stockpricequote/financegeneral/indiabullsfinancialservices/IFS03http://www.moneycontrol.com/india/stockpricequote/financegeneral/edelweisscapital/EC01http://www.moneycontrol.com/india/stockpricequote/financegeneral/indiainfoline/II15http://www.moneycontrol.com/india/stockpricequote/financegeneral/motilaloswalfinancialservices/MOF01http://www.moneycontrol.com/india/stockpricequote/financegeneral/deltacorp/DC11http://www.moneycontrol.com/india/stockpricequote/financegeneral/pilaniinvestmentindustriescorporation/PII03http://www.moneycontrol.com/india/stockpricequote/financegeneral/sksmicrofinance/SM11http://www.moneycontrol.com/india/stockpricequote/financegeneral/futurecapitalholdings/FCHhttp://www.moneycontrol.com/india/stockpricequote/financegeneral/network18mediainvestments/NMIhttp://www.moneycontrol.com/india/stockpricequote/financegeneral/geojitbnpparibasfinancialservices/GBN01http://www.moneycontrol.com/india/stockpricequote/financegeneral/nalwasonsinvestment/NSI02http://www.moneycontrol.com/india/stockpricequote/financegeneral/kirloskarbrothersinvestments/KBI01http://www.moneycontrol.com/india/stockpricequote/financegeneral/moneymattersfinancialservices/MMF05http://www.moneycontrol.com/india/stockpricequote/financegeneral/thebykehospitality/SH12http://www.moneycontrol.com/india/stockpricequote/financegeneral/consolidatedfinvestholdings/CFH01http://www.moneycontrol.com/india/stockpricequote/financegeneral/emkayglobalfinancialservices/EGFhttp://www.moneycontrol.com/india/stockpricequote/financegeneral/microsecfinancialservices/MFShttp://www.moneycontrol.com/india/stockpricequote/financegeneral/adityabirlamoney/ABM01http://www.moneycontrol.com/india/stockpricequote/financegeneral/dhunseriinvestments/DI27http://www.moneycontrol.com/india/stockpricequote/financegeneral/indbankmerchantbankingservices/IMBhttp://www.moneycontrol.com/india/stockpricequote/financegeneral/keynotecorporateservices/KCShttp://www.indiainfoline.com/http://www.moneycontrol.com/india/stockpricequote/financegeneral/indiabullsfinancialservices/IFS03http://www.moneycontrol.com/india/stockpricequote/financegeneral/edelweisscapital/EC01http://www.moneycontrol.com/india/stockpricequote/financegeneral/indiainfoline/II15http://www.moneycontrol.com/india/stockpricequote/financegeneral/motilaloswalfinancialservices/MOF01http://www.moneycontrol.com/india/stockpricequote/financegeneral/deltacorp/DC11http://www.moneycontrol.com/india/stockpricequote/financegeneral/pilaniinvestmentindustriescorporation/PII03http://www.moneycontrol.com/india/stockpricequote/financegeneral/sksmicrofinance/SM11http://www.moneycontrol.com/india/stockpricequote/financegeneral/futurecapitalholdings/FCHhttp://www.moneycontrol.com/india/stockpricequote/financegeneral/network18mediainvestments/NMIhttp://www.moneycontrol.com/india/stockpricequote/financegeneral/geojitbnpparibasfinancialservices/GBN01http://www.moneycontrol.com/india/stockpricequote/financegeneral/nalwasonsinvestment/NSI02http://www.moneycontrol.com/india/stockpricequote/financegeneral/kirloskarbrothersinvestments/KBI01http://www.moneycontrol.com/india/stockpricequote/financegeneral/moneymattersfinancialservices/MMF05http://www.moneycontrol.com/india/stockpricequote/financegeneral/thebykehospitality/SH12http://www.moneycontrol.com/india/stockpricequote/financegeneral/consolidatedfinvestholdings/CFH01http://www.moneycontrol.com/india/stockpricequote/financegeneral/emkayglobalfinancialservices/EGFhttp://www.moneycontrol.com/india/stockpricequote/financegeneral/microsecfinancialservices/MFShttp://www.moneycontrol.com/india/stockpricequote/financegeneral/adityabirlamoney/ABM01http://www.moneycontrol.com/india/stockpricequote/financegeneral/dhunseriinvestments/DI27http://www.moneycontrol.com/india/stockpricequote/financegeneral/indbankmerchantbankingservices/IMBhttp://www.moneycontrol.com/india/stockpricequote/financegeneral/keynotecorporateservices/KCS


13/30


Transwarranty 9.95 24.34 8.38 0.41 53.85

2(h). INFRASTRUCTURAL FACILITIES

Our main offices are located in approximately 4,000 square feet of office space located in

Mumbai, India. Our IndiaInfoline Branches collectively occupy an additional 10,000 square

feet of office space located throughout India.

IndiaInfoline Investment outlets are designed to be placed where retail investors can come

in touch with Investment opportunities in an atmosphere of convenience and comfort. The

look and feel of the offices across India projects a consistent branch image for the company.Easily visible branches set up in the commercial spaces of potential investment zones ranging

between 750sft to 1000sft. Most of the branches are located in the first and second floor sporting huge glass

frontage promoting easy accessibility and reflecting our attitude of complete

transparency.

The major portion of the branch area dedicated for customer use. The furniture is in

CKD formats to add flexibility in using the branch for investors purposes.

Connectivity to NSE for trading facilities.

TV and other electronic mediums to facilitate real time update and dissemination of

information to our customers.

Each branch comprises of trained and qualified Investment advisors to take care of

the needs of the customers.

The Lunch room, Lift and Rest room facilities are provided to the employees in every

branch and recreation facility is provided by offering Lunch coupons at free of cost.

http://www.moneycontrol.com/india/stockpricequote/financegeneral/transwarrantyfinance/TF10http://www.indiainfoline.com/http://www.moneycontrol.com/india/stockpricequote/financegeneral/transwarrantyfinance/TF10


14/30


2(i). ACHIEVEMENTS/ AWARDS

1. According to a survey it is Indias second best online stock broking company.

2. Has 2 famous online websites: www.indiainfoline.com and www.5paisa.com.

3. Is listed on both the stock exchanges i.e. BSE and NSE in the year 2005.

4. Is a depository participant of NSDL (National Security Depository limited)

5. Has acquired the NBFC license in May 2005.

6. Have many joint ventures and tie-ups with other companies like Moneyline

Consultancy Services, Marchmount Capital Advisors and DSP Merrill Lynch Capital.

7. Has tied-up recently with a US firm Auerbach Grayson and Company.

8. Has its own Stock messaging service.

Awards won by IndiaInfoline

Awarded Best Broker India by Finance Asia as a part of its survey of financial

services firms across Asia for 2011. Awarded Best Broking House with Global Presence by Dun and Bradstreet

Broking Awards 2011. Awarded Best Wealth Management House by Asset Asian (Triple A) Broking

Awards 2011. Awarded Fastest growing Equity Broking House Large firms in India by

Dun and Bradstreet Broking Awards 2009. Awarded Most Imported Brokerage in India by Asia Money as a part of its

2008 poll.

2(j).WORK FLOW MODEL (End to End)

`The work flow model of the organization is represented by a flow chart.



15/30

Dealers/ salesmen / surveyor obtain contact information about prospectivecustomer

Walk-in of prospectiveclients

Investment counselor or relationshipmanger.

Obtain clients detail and financialrequirement

(short and long term)

Branch Development manager, Prepares Decides On FinancialPlan

Contacts clients and explains details of proposed planandCustomer account is opened in INDIA INFOLINEDemat A/c ,Mutual funds , Insurance etc.,

EquityCommodities .

2)Insurance 3)Equity & Derivatives

4)Commodities.


2(k). COMPANYS FUTURE GROWTH AND PROSPECTS

IndiaInfoline is a widely expanding company its future prospect can be understood by

following:

1) Planning to enter into the Real Estate business.

2) Targeting higher Manpower.



16/30


3) Targeting more number of Branches in near future

The asset base will continue to grow at an annual rate of about 30 to 35% over the next few

years as investors shift their assets from banks and other traditional avenues. Some of the

older public and private sector players will either close shop or be taken over.

Out of ten public sector players five will sell out, close down or damage with stronger players

in three to four years. In private sector this trend has already started with two mergers and

one takeover. Here too some of them will down their shutters in the near future to come.

But this does not mean there is no room for other players. The market will witness a flurry of

new players entering the arena. There will be a large number of offers from various asset

management companies in the time to come. Some big names like Fidelity, Principal, and

Old Mutual etc. are looking at Indian market seriously. One important reason for it is thatmost major players already have presence here and hence these big names would hardly like

to get left behind.

The mutual fund industry is awaiting the introduction of derivatives in India as this would

enable it to hedge risk and this in turn would be reflected in its Net Asset Value (NAV).

SEBI is working out the norms for enabling the existing mutual fund schemes to trade in

derivatives. Importantly, many market players have called on the regulator to initiate the

process immediately, so that the mutual funds can implement the changes that are required to

trade in Derivatives.

Reforms have marked the entry of many of the global insurance measures into the Indian

market in the form of joint ventures with Indian companies.

Some of the key names are: AIJ, New York Life, Allianz, Prudential, Standard Life, Sun Life

Canada and Old Mutual. The entry of new player has rejuvenated the monopoly player LIC,

which has responded to the competition in an admirable fashion by launching new product

and improving service standards.The ability to successfully implement our growth strategy and expansion plans;

The ability to respond to technological changes;

Changes in laws and regulations relating to the industry in which we operate;

Changes in political and social conditions in India;

The ability to successfully launch the new product



17/30


3. Mc KENSYS 7 S MODULEThe 7 S Framework of McKensy is a model that describes 7 factors to organize a

company in a holistic and effective way. Together these factors determine the way in which a

corporation operates. Managers should take into account all seven factors, to be sure of

successful implementation of a strategy.

Origin of the Mc Kinseys 7 S Model:

Richard Pascale and Anthony Athos first mentioned the 7-S Framework in The Art of

Japanese Management in 1981. They had been investigating how Japanese industry had

been so successful. The Seven S model was born at a meeting of these four authors in 1978.

It appeared also in "In Search of Excellence" by Peters and Waterman, and was taken up as a

basic tool by the global management consultancy company McKensy. Since then it is known

as their 7 S Model.



18/30


These seven elements are distinguished into hard Ss and soft Ss. The hard elements are

feasible and easy to identify. They can be found in strategy statements, corporate plans,

organizational charts and other documents.

The outstanding feature of the 7 S model is that, it has been tested extensively by McKensys

Consultants in their studies of many companies. At the same time, this frame work has been

used by the business schools of Harvard and Stanford Universities. Thus theory and practical

seem to support each other in the study of management. This model also supports the five

managerial functions i.e. Planning, Organizing, Staffing, Leading/Directing and Controlling.

The four soft Ss however, are feasible. They are difficult to describe since capabilities,

values and elements of corporate culture are continuously developing and changing. They are

highly determined by the people at work in the organization. Therefore, it is much more

difficult to plan or to influence the characteristics of the soft elements. Although the often

factors is below the surface, they can have a great impact of the hard structures, strategies

and systems of the organization. By the words above implies that the company should apply

Mc Kensys 7 S Model for its better performance.

Mc Kensys 7 S Model with respect to India infoline

(A) STRUCTURE:

Organizational structure refers to the relatively more durable organizational

arrangements and relationships. The organization structure changes from one company to

other according to their requirements. In todays complex and ever-changing environment, a



19/30


successful organization may make temporary structural changes to cope up with the specific

requirements. It is the skeleton of the whole organizational edifice.

ORGANISATION STRUCTURE INDIA INFOLINE 2011



20/30



Chairman & Managing DirectorExecutive DirectorHead-TechnologyHead-MarketingHead-Risk/ComplianceHead-Risk/ComplianceHead-Distribution & InsuranceHead CommoditiesVP- BrokingHead -NewsVP-PMS & Institutional SalesVP-ResearchHead-AccountsCompany SecretaryHead back office depository serviceHead-Back Office Depository Service


21/30


Each and every department is inter-linked with other departments. It maintains a good

contact with other department because output of one department becomes the input for

another department.

SKILL:

The term skill includes those characteristics which people use to describe a company. Thedominant skills or the distinctive competence of an organization are part of the organization

character.

I t i s a lways ou r endeavor tha t you g row to be a sk i l l fu l and compe ten t

manager. The company exposes i ts employees to some special ized on-the-

job training in the qual i ty improvement of the products . I t f inal ly goes with

performance appraisal .

STYLE:



22/30


In basic organization model Style is related to Culture of the organization. Culture or the

Style is the aggregate of behaviors, thoughts, beliefs, and symbols that is conveyed to the

people throughout organization overtime. Since it is very hard to change a companys

ingrained culture, it is important to bear it in mind while developing a new strategy.

In India Infoline the management believes that no member of the team is ready to lead unless

the employee has been exposed to all facets of the operation. The management expects its

employees to learn from their experience and groom themselves to be the managers of

tomorrow.

The work style is participative, but the basis for such a work environment is autocratic in

nature i.e., the policies and work procedures have been laid down, and the employees work

according to it, but their suggestions are taken up from time to time everyone could be seen

taking interest in their work. The authority of decision making always vest in the hands of top

management.

STRATEGY

Strategy refers to those actions that a company plans in response to or in anticipation of

changes in its external environment, its customers and its competitors. It is a plan or course of

action leading to the allocations of an organizations finite resources to reach identified goals.

Our business plan is to become the leading investment advisor and intermediary for financial

services in India. The key driver is to increase our customer base in all our products, give

them a platform of choice to transact and support them with quality research. The elements of

our strategy include:

"One Stop Shop" from advice to transactions

We have emerged as one of Indias leading financial information Internet portal in India.

We distribute mutual funds and life insurance products through our branches as well as

directly through our sales team.These factors allow us to provide our customers with an integrated online as well as offline

solution to fulfill all their financial information and transaction needs. We believe that our

ability to offer multiple products across broking to insurance to mutual funds to commodities

to small savings differentiates us from our competition. This also offers significant cross

selling opportunities which will help in improving margins as incremental revenue will entail

lower customer acquisition and promotion costs.

Multi channel delivery model



23/30


We intend providing a single convenient and reliable platform from which our users can

obtain information, trade online or purchase offline a wide range of personal financial

products. Our branches have been opened in cities after a detailed study of demographics and

investment patterns in different cities.

Expand our retail network

We have a retail branch network of 73 branches at 36 locations across India to provide an

alternative channel for our customers to transact with us and to support our online services.

These branches allow our customers the opportunity to purchase personal financial products

and trade at such branches with the assistance of our staff. We propose to set up additional 77

branches in 50 cities across India to have a network of 150 branches to further strengthen our

geographic reach.

Leverage our content advantage for value added offerings

We believe that the key to successful investment is research. We have invested considerable

resources in building our research domain skills. Our top management has hands on

experience in equity research. We will continue to expand the breadth and depth of research

and content on Indian business and finance. This research advantage will enable us to acquire

customers in high value added product offerings especially in portfolio management

services..

Continuous investments in technology platform

We have leveraged the power of technology to offer an integrated platform to the customer to

transact. We will continue to invest in such technologies that would enhance customer

experience while interacting with us. We have facilitated integrated trading and depositary

accounts for the customer, payment gateways with multiple banks, online Internet enabled

back office and MIS. We believe that our technology investments will be a key driver in

scaling up of the business.Acquisition and Takeover

We strongly believe that to become a market leader in the investment advisory and

intermediation space, we have to expand our business. In our endeavor to do so and as per

our business strategy we may pursue inorganic growth.

They have emerged as one of Indias leading financial information Internet portal in India.

They distribute mutual funds and life insurance products through their branches as well as

directly through their sales team. These factors allow us to provide their customers with an



24/30


integrated online as well as offline solution to fulfill all their financial information and

transaction needs.

They believe that their ability to offer multiple products across broking to insurance to

mutual funds to commodities to small savings differentiates us from their competition. Thisalso offers significant cross selling opportunities which will help in improving margins as

incremental revenue will entail their customer acquisition and promotion costs.

Their business plan is to become the leading investment advisor and intermediary for

financial services in India. The key driver is to increase their customer base in all their

products, give them a platform of choice to transact and support them with quality research.

SYSTEM

The procedures both formal and informal, by which an organization operates and gathers

information constitutes the systems of the company. This model is concerned with the

systems that allocate and control money and materials as well as gather information.

They manage the risks associated with their broking operations through use of

internally developed credit algorithms implemented through fully automated risk

management software and selective direct monitoring of certain operating parameters. Their

automated risk management procedures rely primarily on internally developed Risk

Management System and systems provided by their vendors.

They have developed a team of Customer Relationship Managers across India to

handle key customer accounts. These people are experienced in financial services and have

undergone in-house training. This allows them to offer unbiased advice on not only equities

but also on other investment products like mutual funds and insurance. Apart from advice,

they are trained to customer queries as they ensure that the customer has a single point

contact with us.They intend providing a single convenient and reliable platform from which their

users can obtain information, trade online or purchase offline a wide range of personal

financial products. Their branches have been opened in cities after a detailed study of

demographics and investment patterns. Their offline network today covers cities that account

for 91.33% of trading in the NSE Cash market as on December 2005 and 89.81% of trading

in the NSE derivatives market as on December 2005.

Accounting Systems : Indiainfoline has well established accounting system. It uses

Custom built software for this purpose. The accounting system is centralized one. Every



25/30


transaction is restricted in this system and at the end of the day all the transactions are

accounted.

STAFF

Staff means the human resource systems which include appraisals, training, wages and the

intangibles such as employee motivation, morale and attitude. With a motivated workforce

companies are able to adapt well and compete

Their Human Resources policy is based on the philosophy of Owner Mindset. They

believe that the key to their continued growth lies in unleashing the entrepreneurial energy of

their employees. They encourage all employees to behave more as owners of their

departments rather than employees. Their people are highly driven and work towards

increasing India Info lines brand and market share across product lines.

They have developed extensive in-house training modules. In addition, various Asset

Management Companies and ICICI PRUDENTIAL LIFE INSURANCE COMPANY

LIMITED train their staff. They lay emphasis on on the job training where an experienced

and senior person mentors a junior executive.

In addition to salary, their employees get performance-based incentives on a quarterly

basis. They have also implemented an Employee Stock Option Plan. As on December 31,

2005, the total employee strength of Their Company and Their subsidiaries was 1089.

SHARED VALUES

The core or fundamental values that are shared in the organization and serve as

guiding principles that are important.

These values have great meaning because they focus attention and provide a broader

sense of purpose.

Each individual in the company is motivated so that each feels responsibility

of working and tries to put in efforts for innovative ideas. If the top

management increases shared values, it will improve the morale of the

employees. The company mainly focuses on quality placing at the right quality at the right

place at the right time.

Make new innovations and brand itself as a huge reputation in the market.



26/30


4. SWOT ANALYSISSTRENGHTS

Integrated technology platform. one stop shop. Excellent distribution network. Quality service. India infoline .com and 5paise .com have developed into brands.

WEAKNESSES Lack of a banking arm to complete the bank-broker-depository chain.

OPPORTUNITIES Increase in disposable income. Increase in complex financial instruments will drive demand for investment advisory

services. Rapid penetration of internet and computers.

THREATS

Economic slowdown. Increasing competition from foreign players. Future changes in personal taxation rules can impact on insurance sales.

5. ANALYSIS OF FINANCIAL STATEMENTBALANCE SHEET AS ON MARCH 31,2011

TABLE NO-03 (In rupees)

PARTICULARS AS AT 31.03.2011 AS AT 31.03.2010

SOURCES OF FUNDS

SHAREHOLDER'S FUNDSshare capital 566800000 571029330reserves and surplus 9801341902 9327546337

equity share warrants 113700000 10481814902 597700000 10496275667LOAN FUNDS

secured loans 17044854 - -

unsecured loans 1031242 18076096 1035676323 1305676323

TOTAL 10499890998 11801951990APPLICATION OF FUNDS



27/30


FIXED ASSETS(Including Intangibles)Gross Block 1436768398 983180924

Less : Accumulated depreciation and amortization -449446945 -350,766,596 Net block 987321453 632414328

Capital Work-in progress 45134564 1032456017 4906179 637320507INVESTMENTS 8693123758 9156801378Deferred Tax Assets 38154037 25893936CURRENT ASSETS,LOANS AND ADVANCESSundry Debtors 1035288204 3428126990Cash and Bank Balances 4302493074 2143711902Loans and Advances 2045913981 3112993717

Stock on hands 5609032 130851247749304291 8697917733

LESS:CURRENT LIABILITIESCurrent Liabilities 5526753387 5148542843

Provisions 1486393718 1567438721

7013147105 6715981564 NET CURRENT ASSETS 736157186 1981936169

TOTAL 10499890998 11801951990

Ratio analysisCURRENT RATIO :-It is the ratio of Total current assets to total current liabilities.

TABLE NO- 04 (In Rupees)

PARTICULAR 2011 2010

CURRENT

ASSETS

7749304291 8697917733

CURRENT

LIABILITIES

7013147105 6715981564

CURRENT

RATIO

1.1 : 1 1.29 : 1

GRAPH NO- 01

INTERPRETATION :- Current Ratio of 2 : 1 is considered satisfactory, Here current ratio



28/30


is decreased 1.29 : 1 in 2011 to 1.1 : 1 in 2010.

DEBT TO EQUITY RATIO :- Its shows the relationship between borrowed funds and

owners capital.

TABLE NO-05 (In Rupees)

PARTICULAR 2011 2010

TOTAL DEBT 18076096 1305676323

SHAREHOLDERSEQUITY

566800000 571029330

DEBT TO EQUITY

RATIO

3.18 2.28

GRAPH NO - 02

INTERPRATATION :-It helps to measure long term financial solvency of a firm. It has

important implication from view point of the creditors, owner and firm itself. Here company

maintained financial position is very well.

NET PROFIT MARGIN:- Net profit margin measures the relationship between profit and

sales.

TABLE NO-06 (In Rupees)

PARTICULARS 2011 2010

PAT 1058253789 128688137

SALES 5716022050 6724401409



29/30


NET PROFIT RATIO 18% 19%

GRAPH NO- 03

INTERPRATATION :- India Infoline has nearly 18-19% of net profit margin on its sales so

we called it satisfactonary return.

RETURN ON ASSETS:- This profitability ratio Is measured In terms of the relationship

between net profits and assets.

TABLE NO- 07 (In Rupees)

PARTICULARS 2011 2010NPA + INTEREST 1136710398 3403131531TOTAL ASSETS 10499890998 11801951990ROA 10.82% 28.83%

GRAPH NO- 04

INTERPRATATION :- Here ROA Decreased from 28.83% in 2010 to 10.82% in

2009.because slow growth in sales.

6. LEARNING EXPERIENCE

The learning experience gained by me during the in-plant training was very much

practical oriented. Mostly all the concepts and theories, which I studied in the class, are

applicable practically.



30/30


The overall study of the organization reveals that the company has grown tremendously since

its incorporation from 1995, now it is in Equity, portfolio management services,

commodities,Research etc. The company has an effective human resources department where

in the employees are given excellent packages, incentives and extensive care is taken by providing facilities such as canteen, medical facilities, motivation classes and extracurricular

activities

.

I had a great time working on the project, as it gives insights into the working

environment of an organization. The training has exposed me to many facts of an

organization and also helped me to gain practical knowledge, which will go a long way in the

horizon of my career. I became more aware of the stock market and the role played by India

infoline.

Documents

IIFL PART - A