70
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 1 A PROJECT REPORT ON C C O O M M P P A A R R A A T T I I V V E E A A N N A A L L Y Y S S I I S S O O F F I I N N V V E E S S T T M M E E N N T T I I N N E E Q Q U U I I T T Y Y A A N N D D M M U U T T U U A A L L F F U U N N D D S S C C H H E E M M E E S S . . With Reference to SUBMITTED IN PARTIAL FULFILMENT OF REQUIREMENT OF PGDM PROGRAME (2009 – 2011) SUBMITTED TO:- SUBMITTED BY:- Mr. Rakesh Sahu NAGENDRA KUMAR

India Infoline Project Report

  • Upload
    apoorva

  • View
    12

  • Download
    5

Embed Size (px)

DESCRIPTION

sip

Citation preview

Page 1: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 1

A PROJECT REPORT ON

CCCOOOMMMPPPAAARRRAAATTTIIIVVVEEE AAANNNAAALLLYYYSSSIIISSS OOOFFF

IIINNNVVVEEESSSTTTMMMEEENNNTTT IIINNN EEEQQQUUUIIITTTYYY AAANNNDDD

MMMUUUTTTUUUAAALLL FFFUUUNNNDDD SSSCCCHHHEEEMMMEEESSS

With Reference to

SUBMITTED IN PARTIAL FULFILMENT OF

REQUIREMENT OF PGDM PROGRAME

(2009 ndash 2011)

SUBMITTED TO- SUBMITTED BY-

Mr Rakesh Sahu NAGENDRA KUMAR

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 2

DECLARATION

We hereby declare that the PGDM Project titled ldquoCOMPARATIVE

ANALYSIS OF INVESTMENT IN EQUITY AND MUTUAL FUND

SCHEMES WITH REFERENCE TO INDIAINFOLINErdquo plans is original

to the best of our knowledge and have not been published elsewhere This is for

the purpose of partial fulfillment of the requirement for the degree of Post

Graduate Diploma in Management (PGDM)

Place - Bangalore NAGENDRA KUMAR

Date -helliphelliphelliphelliphelliphelliphelliphelliphelliphellip Sign-helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 3

ACKNOWLEDGEMENT

Any purpose and its fulfillment require deep routed efforts for its completion

Many characters play a vital role This is more when a project undertaken is

directly to a cause

Our sincere thanks to Prof Dr KIRAN REDDY PRINCIPAL AND

CEO OF AIMS for giving this opportunity to me

We would like to thank ProfRAKESH SUD our Project guide not only

for giving us the opportunity to work on this project but also for providing us

with sound guidance and the necessary facilities to carry out the project He

constantly insisted and helped us in learning new things He provided us a lot of

learning opportunities

Finally I would like to thank all those who were directly and indirectly

concerned in making my project successful To put it in a nutshell a difficult

and arduous journey was made simple and quiet enjoyable due to their support

NAGENDRA KUMAR

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 4

PREFACE

PGDM program is one of the most reputed professional courses in the field of

Management Training is an integral part of PGDM (MBA) As a

complementary to that every trainee has to submit a report on the research work

conducted in that institute

This report is thus prepared for the project work done at Indiainfoline

Rajajinagar branch The topic of the project is ldquoComparative analysis of

investment in equity and mutual fund schemes with reference to IndiaInfolinerdquo

Investment means putting your money to work to earn more money If done

wisely it can help to meet ones financial goals like buying a new house paying

for a college education education enjoying a comfortable retirement or

whatever is important to an individual

One needs to make decisions about how much heshe wants to invest and where

to invest To choose he needs to know current good options available and their

relative risk exposures These help are given to a client in Indiainfoline as to in

which portfolio they can invest and what risks are related to it They manage all

the respected returns of their clients and timely inform them for the switching to

be done between funds in cases of expected downfall in returns of their Mutual

Funds in future

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 5

INDEX NO PARTICULAR

1 INDUSTRY PROFILE

FINANCIAL MARKETS

2 COMPANY PROFILE

INTRODUCTION TO INDIA INFOLINE

HISTORY OF INDAIINFOLINE

VISION

MISSION

COMPANYrsquoS PHILOSHOPY

COMMITTEE

COMPANY STRUCTURE

PRODUCT amp SERVICE

MILESTONES ACHIVED

MARKET SHARE OF COMPANY

CHALLENGE FACED BY INDIAINFOLINE

MARKETING STRATGY OF INDIAINFOLINE

HUMAN RESOURCES

3 RESEARCH METHODOLOGY

OBJECTIVE OF STUDY

DATA COLLECTION

FUNDAMENTAL RESEARCH SERVICE

TECHNICAL RESEARCH SERVICE

SWOT ANALYSIS

PORTERrsquoS FIVE FORCE MODEL

4 DATA ANALYSIS

FINANCIAL PERFORMANCE

P amp L ACCOUNT OF INDIAINFOLINE

BALANCE SHEET OF INDIAINFOLINE

COMPITITORS

COMPARATIVE ANALYSIS OF CHARGES amp

FACILITIES PROVIDED BY DIFFERENT COMPANY

PERFORMANCE HIGHLIGHT 2008-09

HIGHLIGHTS 2008-09 INDUSTRY OPTIMISM

5 FINDING

6 RECOMMENDATION

7 CONCLUSION

8 BIBLIOGRPHY

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 6

INDUSTRY PROFILE

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 7

INDUSTRY PROFILE

The Indian broking industry is one of the oldest trading industries that have

been around even before the establishment of the BSE in 1875 Despite

passing through number of changes in the post liberalization period the

industry has found its way onwards sustainable growth With the purpose of

gaining a deeper understanding about the role of the Indian stock broking

industry in the countryrsquos economy we present in this section some of the

industry insights gleaned from analysis of data received through primary

research

For the broking industry we started with an initial database of over

1800 broking firms that were contacted from which 464 responses were

received The list was further short listed based on the number of terminals

and the top 210 were selected for profiling 394 responses that provided

more than 85 of the information sought have been included for this analysis

presented here as insights All the data for the study was collected through

responses received directly from the broking firms The insights have been

arrived at through an analysis on various parameters pertinent to the equity

broking industry such as region terminal market branches sub brokers

products and growth areas

Some key characteristics of the sample 394 firms are

On the basis of geographical concentration the West region has the

maximum representation of 52 Around 24 firms are located in the

North 13 in the South and 10 in the East

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 8

3 firms started broking operations before 1950 65 between 1950-

1995 and 32 post 1995

On the basis of terminals 40 are located at Mumbai 12 in Delhi 8

in Ahmedabad 7 in Kolkata 4 in Chennai and 29 are from other

cities

From this study we find that almost 36 firms trade in cash and

derivatives and 27 are into cash markets alone Around 20 trade in

cash derivatives and commodities

In the cash market around 34 firms trade at NSE 14 at BSE and 52

trade at both exchanges In the derivative segment 48 trade at NSE

7 at BSE and 45 at both whereas in the debt market 31 trade at

NSE 26 at BSE and 43 at both exchanges

Majority of branches are located in the North ie around 40 West has

31 24 are located in South and 5 in East

In terms of sub-brokers around 55 are located in the South 29 in

West 11 in North and 4 in East

Trading IPOs and Mutual Funds are the top three products offered with

90 firms offering trading 67 IPOs and 53 firms offering mutual fund

transactions

In terms of various areas of growth 84 firms have expressed interest in

expanding their institutional clients 66 firms intend to increase FII

clients and 43 are interested in setting up JV in India and abroad

In terms of IT penetration 62 firms have provided their website and

around 94 firms have email facility

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 9

A BRIEF HISTORY

India Infoline was originally incorporated on October 18 1995 as

Probity Research and Services Private Limited at Mumbai under the Companies

Act 1956 with Registration No 11 93797 India Infoline commenced

operations as an independent provider of information analysis and research

covering Indian businesses financial markets and economy to institutional

customers India Infoline became a public limited company on April 28 2000

and the name of the Company was changed to Probity Research and Services

Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 India Infolinecom identified the potential of the Internet to

cater to a mass retail segment and transformed our business model from

providing information services to institutional customers to retail customers

Hence India Infoline launched Internet portal wwwindiainfolinecom in May

1999 and started providing news and market information independent

research interviews with business leaders and other specialized features

In May 2000 the name of India Infoline was changed to India

Infolinecom Limited to reflect the transformation of our business Over a

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 10

period of time India Infolinecom has emerged as one of the leading business

and financial information services provider in India

In the year 2000 India Infoline leveraged its position as a provider of

financial information and analysis by diversifying into transactional services

primarily for online trading in shares and securities and online as well as offline

distribution of personal financial products like mutual funds and RBI Bonds

These activities were carried on by our wholly owned subsidiaries

India Infoline broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July

2000 It combined competitive brokerage rates and research supported by

Internet technology besides investment advice from an experienced team of

research analysts India Infoline also offer real time stock quotes market news

and price charts with multiple tools for technical analysis

Facilities

India Infolinersquos main offices are located in approximately 4000 square

feet of office space located in Mumbai India India Infoline Branches

collectively occupy an additional 10000 square feet of office space located

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 11

throughout India As on March 31 2005 India Infoline has 73 branches across

36 locations in India

Terminals

Almost 52 of the terminals in the sample are based in the Western

region of India followed by 25 in the North 13 in the South and 10 in the

East Mumbai has got the maximum representation from the West Chennai

from the South New Delhi from the North and Kolkata from the East

Branches amp Sub-Brokers

The maximum concentration of branches is in the North with as many

as 40 of all branches located there followed by the Western region with

31 branches Around 24 branches are located in the South and East

constitutes for 5 of the total branches of the total sample

In case of sub-brokers almost 55 of them are based in the South West

and North follow with 30 and 11 sub-brokers respectively whereas East

has around 4 of total sub-brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 12

Financial Markets

The financial markets have been classified as cash market derivatives

market debt market and commodities market Cash market also known as

spot market is the most sought after amongst investors Majority of the

sample broking firms are dealing in the cash market followed by derivative

and commodities 27 firms are dealing only in the cash market whereas 35

are into cash and derivatives Almost 20 firms trade in cash derivatives and

commodities market Firms that are into cash derivatives and debt are 7 On

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13

the other hand firms into cash and commodities are 3 cash amp debt market

and commodities alone are 2 4 firms trade in all the markets

In the cash market around 34 firms trade at NSE 14 at BSE and 52

trade at both exchanges In the equity derivative market 48 of the sampled

broking houses are members of NSE and 7 trade at BSE while 45 of the

sample operate in both stock exchanges Around 43 of the broking houses

operating in the debt market trade at both exchanges with 31 and 26

firms uniquely at NSE and BSE respectively

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14

Products

The survey also revealed that in the past couple of years apart from

trading the firms have started offering various investment related value

added services The sustained growth of the economy in the past couple of

years has resulted in broking firms offering many diversified services related

to IPOs mutual funds company research etc However the core trading

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15

activity is still the predominant form of business forming 90 of the firms in

the sample 67 firms are engaged in offering IPO related services The

broking industry seems to have capitalized on the growth of the mutual fund

industry which was pegged at 40 in 2006 More than 50 of the sample

broking houses deal in mutual fund investment services The average growth

in assets under management in the last two years is almost 48 Company

research is another lucrative area where the broking firms offer their services

more than 33 of the firms are engaged in providing company research

services Additionally a host of other value added services such as

fundamental and technical analysis investment banking arbitrage etc are

offered by the firms at different levels

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16

Of the total sample of broking houses providing trading services 52 are

based in the West followed by 25 from North 13 from South and 10

from the East Around 50 of the firms offering IPO related services are based

in the West as compared to 27 in North 13 in South and 10 in East In

providing mutual funds services the Western region was dominant amounting

to 49 followed by 27 from North The South and the East are almost at par

with 13 and 11 respectively

Future Plans

68 of the firms from the sample have envisaged strategies for future

growth With the middle class Indian investor as well as foreign investor

willing to invest in the stock market majority of the firms preferred expansion

of institutional and the Foreign Institutional Investor clients in their areas of

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17

growth Around 84 have shown interest in expanding their institutional

client base Nearly 51 of such firms are located in the West 25 in North

15 are from South and 9 from East Since the past couple of years India

along with Korea and Taiwan has been one of the preferred destinations for

the FIIs With corporate restructuring rising market capitalization and sectoral

friendly policies helping the FIIs more than two thirds of the firms are

interested in increasing their FII client base Amongst these firms west again

has maximum representation of 53 followed by North with 22 South has

15 firms and East makes up for 9

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19

INTRODUCTION TO INDIAINFOLINE

IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an

independent business research and information provider We gradually evolved into a one-

stop financial services solutions provider Our strong management team comprises competent

and dedicated professionals

We are a pan-India financial services organization across 1361 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)

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 and

DGCX 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 ndash India Infoline Investment Services and Moneyline Credit

Limited ndash 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

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20

HISTROY OF INDIAINFOLINE

The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity

Research and Services Private Limited at Mumbai under the Companies Act 1956 with

Registration No 11 93797 The IndiaInfoline Group commenced its operations as an

independent provider of information analysis and research covering Indian businesses

financial markets and economy to institutional customers We became a public limited

company on April 28 2000 and the name of the Company was changed to Probity Research

and Services Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a

mass retail segment and transformed our business model from providing information services

to institutional customers to retail customers Hence we launched our Internet portal

wwwindiainfolinecom in May 1999 and started providing news and market information

independent research interviews with business leaders and other specialized features

In May 2000 the name of our Company was changed to India Infolinecom Limited

to reflect the transformation of our business Over a period of time we have emerged as one

of the leading business and financial information services provider in India

In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of

financial information and analysis by diversifying into transactional services primarily for

online trading in shares and securities and online as well as offline distribution of personal

financial products like mutual funds and RBI Bonds These activities were carried on by our

wholly owned subsidiaries

The India Infoline Grouprsquos broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July 2000 It

combined competitive brokerage rates and research supported by Internet technology

Besides investment advice from an experienced team of research analysts we also offer real

time stock quotes market news and price charts with multiple tools for technical analysis

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21

Acquisition of Agri Marketing Services Limited (Agri)

In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri

Marketing Services Limited from their owners in exchange for the issuance of 508482 of

our equity shares Agri was a direct selling agent of personal financial products including

mutual funds fixed deposits corporate bonds and post-office instruments At the time of our

acquisition Agri operated 32 branches in South and West India serving more than 30000

customers with a staff of approximately 180 employees After the acquisition we changed

the company name to India Infolinecom Distribution Company Limited

The India Infoline group comprising the holding company India Infoline Ltd (NSE

INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian

financial services space India Infoline offers the entire gamut of financial services covering

investment products ranging from Equities and derivatives Commodities Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment

Banking GoI bonds and other small savings instruments It owns and manages the website

wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal

finance stock markets economy and business

A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none

other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo

IndiaInfolinersquos research is available not just over the internet but also on international wire

services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is

amongst the most read Indian brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22

A network of 753 business locations spread over 346 cities across India facilitates the

smooth acquisition and servicing of a large customer base All these offices are connected

with the corporate office in Mumbai with cutting edge networking technology

The group caters to a customer base of over 500000 over a variety of mediums viz online

over the phone and at our branches The Group is strengthening its institutional broking and

investment banking services and has built a team of experienced research analysts sales and

trading professionals

IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will

give a more meaningful picture of the Company to the investors Reference to the company

or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise

specified

VISION

Our vision is to be the most respected company in the financial services space

MISSION

ldquoTo become a full-fledged financial services company known for its quality of advice

personalized services and cutting edge technologyrdquo

COMPANY PHILISOPHY

The IndiaInfoline Group is committed to placing the Investor First by continuously striving

to increase the efficiency of the operations as well as the systems and processes for use of

corporate resources in such a way so as to maximize the value to the stakeholders The Group

aims at achieving not only the highest possible standards of legal and regulatory compliances

but also of effective management

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23

COMMITTEE

Audit Committee

Terms of reference amp Composition Name of members and Chairman The Audit committee

comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv

Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and

Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as

under - To investigate into any matter that may be prescribed under the provisions of Section

292A of The Companies Act 1956 - Recommendation and removal of External Auditor and

fixation of the Audit Fees - Reviewing with the management the financial statements before

submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and

disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function

Compensation Remuneration Committee

Terms of reference amp Composition Name of members and Chairman The Compensation

Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr

Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of

reference of this committee are as under - To fix suitable remuneration package of all the

Executive Directors and Non Executive Directors Senior Employees and officers ie Salary

perquisites bonuses stock options pensions etc - Determination of the fixed component and

performance linked incentives alongwith the performance criteria to all employees of the

company - Service Contracts Notice Period Severance Fees of Directors and employees -

Stock Option details whether to be issued at discount as well as the period over which to be

accrued and over which exercisable - To conduct discussions with the HR department and

form suitable remuneration policies

Share Transfer and Investor Grievance Committee

Details of the Members Compliance Officer No of Complaints received and pending and

pending transfers as on close of the financial year The committee functions under the

Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24

Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R

Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance

Officer of the Company

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock

Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of

both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory

Services and Portfolio Management Services It offers broking services in the Cash and

Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with

NSDL as well as CDSL as a depository participant providing a one-stop solution for clients

trading in the equities market It has recently launched its Investment banking and

Institutional Broking business

A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients

These services are offered to clients as different schemes which are based on differing

investment strategies made to reflect the varied risk-return preferences of clients

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 2: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 2

DECLARATION

We hereby declare that the PGDM Project titled ldquoCOMPARATIVE

ANALYSIS OF INVESTMENT IN EQUITY AND MUTUAL FUND

SCHEMES WITH REFERENCE TO INDIAINFOLINErdquo plans is original

to the best of our knowledge and have not been published elsewhere This is for

the purpose of partial fulfillment of the requirement for the degree of Post

Graduate Diploma in Management (PGDM)

Place - Bangalore NAGENDRA KUMAR

Date -helliphelliphelliphelliphelliphelliphelliphelliphelliphellip Sign-helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 3

ACKNOWLEDGEMENT

Any purpose and its fulfillment require deep routed efforts for its completion

Many characters play a vital role This is more when a project undertaken is

directly to a cause

Our sincere thanks to Prof Dr KIRAN REDDY PRINCIPAL AND

CEO OF AIMS for giving this opportunity to me

We would like to thank ProfRAKESH SUD our Project guide not only

for giving us the opportunity to work on this project but also for providing us

with sound guidance and the necessary facilities to carry out the project He

constantly insisted and helped us in learning new things He provided us a lot of

learning opportunities

Finally I would like to thank all those who were directly and indirectly

concerned in making my project successful To put it in a nutshell a difficult

and arduous journey was made simple and quiet enjoyable due to their support

NAGENDRA KUMAR

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 4

PREFACE

PGDM program is one of the most reputed professional courses in the field of

Management Training is an integral part of PGDM (MBA) As a

complementary to that every trainee has to submit a report on the research work

conducted in that institute

This report is thus prepared for the project work done at Indiainfoline

Rajajinagar branch The topic of the project is ldquoComparative analysis of

investment in equity and mutual fund schemes with reference to IndiaInfolinerdquo

Investment means putting your money to work to earn more money If done

wisely it can help to meet ones financial goals like buying a new house paying

for a college education education enjoying a comfortable retirement or

whatever is important to an individual

One needs to make decisions about how much heshe wants to invest and where

to invest To choose he needs to know current good options available and their

relative risk exposures These help are given to a client in Indiainfoline as to in

which portfolio they can invest and what risks are related to it They manage all

the respected returns of their clients and timely inform them for the switching to

be done between funds in cases of expected downfall in returns of their Mutual

Funds in future

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 5

INDEX NO PARTICULAR

1 INDUSTRY PROFILE

FINANCIAL MARKETS

2 COMPANY PROFILE

INTRODUCTION TO INDIA INFOLINE

HISTORY OF INDAIINFOLINE

VISION

MISSION

COMPANYrsquoS PHILOSHOPY

COMMITTEE

COMPANY STRUCTURE

PRODUCT amp SERVICE

MILESTONES ACHIVED

MARKET SHARE OF COMPANY

CHALLENGE FACED BY INDIAINFOLINE

MARKETING STRATGY OF INDIAINFOLINE

HUMAN RESOURCES

3 RESEARCH METHODOLOGY

OBJECTIVE OF STUDY

DATA COLLECTION

FUNDAMENTAL RESEARCH SERVICE

TECHNICAL RESEARCH SERVICE

SWOT ANALYSIS

PORTERrsquoS FIVE FORCE MODEL

4 DATA ANALYSIS

FINANCIAL PERFORMANCE

P amp L ACCOUNT OF INDIAINFOLINE

BALANCE SHEET OF INDIAINFOLINE

COMPITITORS

COMPARATIVE ANALYSIS OF CHARGES amp

FACILITIES PROVIDED BY DIFFERENT COMPANY

PERFORMANCE HIGHLIGHT 2008-09

HIGHLIGHTS 2008-09 INDUSTRY OPTIMISM

5 FINDING

6 RECOMMENDATION

7 CONCLUSION

8 BIBLIOGRPHY

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 6

INDUSTRY PROFILE

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 7

INDUSTRY PROFILE

The Indian broking industry is one of the oldest trading industries that have

been around even before the establishment of the BSE in 1875 Despite

passing through number of changes in the post liberalization period the

industry has found its way onwards sustainable growth With the purpose of

gaining a deeper understanding about the role of the Indian stock broking

industry in the countryrsquos economy we present in this section some of the

industry insights gleaned from analysis of data received through primary

research

For the broking industry we started with an initial database of over

1800 broking firms that were contacted from which 464 responses were

received The list was further short listed based on the number of terminals

and the top 210 were selected for profiling 394 responses that provided

more than 85 of the information sought have been included for this analysis

presented here as insights All the data for the study was collected through

responses received directly from the broking firms The insights have been

arrived at through an analysis on various parameters pertinent to the equity

broking industry such as region terminal market branches sub brokers

products and growth areas

Some key characteristics of the sample 394 firms are

On the basis of geographical concentration the West region has the

maximum representation of 52 Around 24 firms are located in the

North 13 in the South and 10 in the East

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 8

3 firms started broking operations before 1950 65 between 1950-

1995 and 32 post 1995

On the basis of terminals 40 are located at Mumbai 12 in Delhi 8

in Ahmedabad 7 in Kolkata 4 in Chennai and 29 are from other

cities

From this study we find that almost 36 firms trade in cash and

derivatives and 27 are into cash markets alone Around 20 trade in

cash derivatives and commodities

In the cash market around 34 firms trade at NSE 14 at BSE and 52

trade at both exchanges In the derivative segment 48 trade at NSE

7 at BSE and 45 at both whereas in the debt market 31 trade at

NSE 26 at BSE and 43 at both exchanges

Majority of branches are located in the North ie around 40 West has

31 24 are located in South and 5 in East

In terms of sub-brokers around 55 are located in the South 29 in

West 11 in North and 4 in East

Trading IPOs and Mutual Funds are the top three products offered with

90 firms offering trading 67 IPOs and 53 firms offering mutual fund

transactions

In terms of various areas of growth 84 firms have expressed interest in

expanding their institutional clients 66 firms intend to increase FII

clients and 43 are interested in setting up JV in India and abroad

In terms of IT penetration 62 firms have provided their website and

around 94 firms have email facility

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 9

A BRIEF HISTORY

India Infoline was originally incorporated on October 18 1995 as

Probity Research and Services Private Limited at Mumbai under the Companies

Act 1956 with Registration No 11 93797 India Infoline commenced

operations as an independent provider of information analysis and research

covering Indian businesses financial markets and economy to institutional

customers India Infoline became a public limited company on April 28 2000

and the name of the Company was changed to Probity Research and Services

Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 India Infolinecom identified the potential of the Internet to

cater to a mass retail segment and transformed our business model from

providing information services to institutional customers to retail customers

Hence India Infoline launched Internet portal wwwindiainfolinecom in May

1999 and started providing news and market information independent

research interviews with business leaders and other specialized features

In May 2000 the name of India Infoline was changed to India

Infolinecom Limited to reflect the transformation of our business Over a

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 10

period of time India Infolinecom has emerged as one of the leading business

and financial information services provider in India

In the year 2000 India Infoline leveraged its position as a provider of

financial information and analysis by diversifying into transactional services

primarily for online trading in shares and securities and online as well as offline

distribution of personal financial products like mutual funds and RBI Bonds

These activities were carried on by our wholly owned subsidiaries

India Infoline broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July

2000 It combined competitive brokerage rates and research supported by

Internet technology besides investment advice from an experienced team of

research analysts India Infoline also offer real time stock quotes market news

and price charts with multiple tools for technical analysis

Facilities

India Infolinersquos main offices are located in approximately 4000 square

feet of office space located in Mumbai India India Infoline Branches

collectively occupy an additional 10000 square feet of office space located

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 11

throughout India As on March 31 2005 India Infoline has 73 branches across

36 locations in India

Terminals

Almost 52 of the terminals in the sample are based in the Western

region of India followed by 25 in the North 13 in the South and 10 in the

East Mumbai has got the maximum representation from the West Chennai

from the South New Delhi from the North and Kolkata from the East

Branches amp Sub-Brokers

The maximum concentration of branches is in the North with as many

as 40 of all branches located there followed by the Western region with

31 branches Around 24 branches are located in the South and East

constitutes for 5 of the total branches of the total sample

In case of sub-brokers almost 55 of them are based in the South West

and North follow with 30 and 11 sub-brokers respectively whereas East

has around 4 of total sub-brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 12

Financial Markets

The financial markets have been classified as cash market derivatives

market debt market and commodities market Cash market also known as

spot market is the most sought after amongst investors Majority of the

sample broking firms are dealing in the cash market followed by derivative

and commodities 27 firms are dealing only in the cash market whereas 35

are into cash and derivatives Almost 20 firms trade in cash derivatives and

commodities market Firms that are into cash derivatives and debt are 7 On

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13

the other hand firms into cash and commodities are 3 cash amp debt market

and commodities alone are 2 4 firms trade in all the markets

In the cash market around 34 firms trade at NSE 14 at BSE and 52

trade at both exchanges In the equity derivative market 48 of the sampled

broking houses are members of NSE and 7 trade at BSE while 45 of the

sample operate in both stock exchanges Around 43 of the broking houses

operating in the debt market trade at both exchanges with 31 and 26

firms uniquely at NSE and BSE respectively

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14

Products

The survey also revealed that in the past couple of years apart from

trading the firms have started offering various investment related value

added services The sustained growth of the economy in the past couple of

years has resulted in broking firms offering many diversified services related

to IPOs mutual funds company research etc However the core trading

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15

activity is still the predominant form of business forming 90 of the firms in

the sample 67 firms are engaged in offering IPO related services The

broking industry seems to have capitalized on the growth of the mutual fund

industry which was pegged at 40 in 2006 More than 50 of the sample

broking houses deal in mutual fund investment services The average growth

in assets under management in the last two years is almost 48 Company

research is another lucrative area where the broking firms offer their services

more than 33 of the firms are engaged in providing company research

services Additionally a host of other value added services such as

fundamental and technical analysis investment banking arbitrage etc are

offered by the firms at different levels

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16

Of the total sample of broking houses providing trading services 52 are

based in the West followed by 25 from North 13 from South and 10

from the East Around 50 of the firms offering IPO related services are based

in the West as compared to 27 in North 13 in South and 10 in East In

providing mutual funds services the Western region was dominant amounting

to 49 followed by 27 from North The South and the East are almost at par

with 13 and 11 respectively

Future Plans

68 of the firms from the sample have envisaged strategies for future

growth With the middle class Indian investor as well as foreign investor

willing to invest in the stock market majority of the firms preferred expansion

of institutional and the Foreign Institutional Investor clients in their areas of

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17

growth Around 84 have shown interest in expanding their institutional

client base Nearly 51 of such firms are located in the West 25 in North

15 are from South and 9 from East Since the past couple of years India

along with Korea and Taiwan has been one of the preferred destinations for

the FIIs With corporate restructuring rising market capitalization and sectoral

friendly policies helping the FIIs more than two thirds of the firms are

interested in increasing their FII client base Amongst these firms west again

has maximum representation of 53 followed by North with 22 South has

15 firms and East makes up for 9

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19

INTRODUCTION TO INDIAINFOLINE

IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an

independent business research and information provider We gradually evolved into a one-

stop financial services solutions provider Our strong management team comprises competent

and dedicated professionals

We are a pan-India financial services organization across 1361 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)

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 and

DGCX 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 ndash India Infoline Investment Services and Moneyline Credit

Limited ndash 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

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20

HISTROY OF INDIAINFOLINE

The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity

Research and Services Private Limited at Mumbai under the Companies Act 1956 with

Registration No 11 93797 The IndiaInfoline Group commenced its operations as an

independent provider of information analysis and research covering Indian businesses

financial markets and economy to institutional customers We became a public limited

company on April 28 2000 and the name of the Company was changed to Probity Research

and Services Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a

mass retail segment and transformed our business model from providing information services

to institutional customers to retail customers Hence we launched our Internet portal

wwwindiainfolinecom in May 1999 and started providing news and market information

independent research interviews with business leaders and other specialized features

In May 2000 the name of our Company was changed to India Infolinecom Limited

to reflect the transformation of our business Over a period of time we have emerged as one

of the leading business and financial information services provider in India

In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of

financial information and analysis by diversifying into transactional services primarily for

online trading in shares and securities and online as well as offline distribution of personal

financial products like mutual funds and RBI Bonds These activities were carried on by our

wholly owned subsidiaries

The India Infoline Grouprsquos broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July 2000 It

combined competitive brokerage rates and research supported by Internet technology

Besides investment advice from an experienced team of research analysts we also offer real

time stock quotes market news and price charts with multiple tools for technical analysis

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21

Acquisition of Agri Marketing Services Limited (Agri)

In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri

Marketing Services Limited from their owners in exchange for the issuance of 508482 of

our equity shares Agri was a direct selling agent of personal financial products including

mutual funds fixed deposits corporate bonds and post-office instruments At the time of our

acquisition Agri operated 32 branches in South and West India serving more than 30000

customers with a staff of approximately 180 employees After the acquisition we changed

the company name to India Infolinecom Distribution Company Limited

The India Infoline group comprising the holding company India Infoline Ltd (NSE

INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian

financial services space India Infoline offers the entire gamut of financial services covering

investment products ranging from Equities and derivatives Commodities Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment

Banking GoI bonds and other small savings instruments It owns and manages the website

wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal

finance stock markets economy and business

A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none

other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo

IndiaInfolinersquos research is available not just over the internet but also on international wire

services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is

amongst the most read Indian brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22

A network of 753 business locations spread over 346 cities across India facilitates the

smooth acquisition and servicing of a large customer base All these offices are connected

with the corporate office in Mumbai with cutting edge networking technology

The group caters to a customer base of over 500000 over a variety of mediums viz online

over the phone and at our branches The Group is strengthening its institutional broking and

investment banking services and has built a team of experienced research analysts sales and

trading professionals

IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will

give a more meaningful picture of the Company to the investors Reference to the company

or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise

specified

VISION

Our vision is to be the most respected company in the financial services space

MISSION

ldquoTo become a full-fledged financial services company known for its quality of advice

personalized services and cutting edge technologyrdquo

COMPANY PHILISOPHY

The IndiaInfoline Group is committed to placing the Investor First by continuously striving

to increase the efficiency of the operations as well as the systems and processes for use of

corporate resources in such a way so as to maximize the value to the stakeholders The Group

aims at achieving not only the highest possible standards of legal and regulatory compliances

but also of effective management

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23

COMMITTEE

Audit Committee

Terms of reference amp Composition Name of members and Chairman The Audit committee

comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv

Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and

Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as

under - To investigate into any matter that may be prescribed under the provisions of Section

292A of The Companies Act 1956 - Recommendation and removal of External Auditor and

fixation of the Audit Fees - Reviewing with the management the financial statements before

submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and

disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function

Compensation Remuneration Committee

Terms of reference amp Composition Name of members and Chairman The Compensation

Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr

Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of

reference of this committee are as under - To fix suitable remuneration package of all the

Executive Directors and Non Executive Directors Senior Employees and officers ie Salary

perquisites bonuses stock options pensions etc - Determination of the fixed component and

performance linked incentives alongwith the performance criteria to all employees of the

company - Service Contracts Notice Period Severance Fees of Directors and employees -

Stock Option details whether to be issued at discount as well as the period over which to be

accrued and over which exercisable - To conduct discussions with the HR department and

form suitable remuneration policies

Share Transfer and Investor Grievance Committee

Details of the Members Compliance Officer No of Complaints received and pending and

pending transfers as on close of the financial year The committee functions under the

Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24

Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R

Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance

Officer of the Company

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock

Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of

both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory

Services and Portfolio Management Services It offers broking services in the Cash and

Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with

NSDL as well as CDSL as a depository participant providing a one-stop solution for clients

trading in the equities market It has recently launched its Investment banking and

Institutional Broking business

A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients

These services are offered to clients as different schemes which are based on differing

investment strategies made to reflect the varied risk-return preferences of clients

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 3: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 3

ACKNOWLEDGEMENT

Any purpose and its fulfillment require deep routed efforts for its completion

Many characters play a vital role This is more when a project undertaken is

directly to a cause

Our sincere thanks to Prof Dr KIRAN REDDY PRINCIPAL AND

CEO OF AIMS for giving this opportunity to me

We would like to thank ProfRAKESH SUD our Project guide not only

for giving us the opportunity to work on this project but also for providing us

with sound guidance and the necessary facilities to carry out the project He

constantly insisted and helped us in learning new things He provided us a lot of

learning opportunities

Finally I would like to thank all those who were directly and indirectly

concerned in making my project successful To put it in a nutshell a difficult

and arduous journey was made simple and quiet enjoyable due to their support

NAGENDRA KUMAR

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 4

PREFACE

PGDM program is one of the most reputed professional courses in the field of

Management Training is an integral part of PGDM (MBA) As a

complementary to that every trainee has to submit a report on the research work

conducted in that institute

This report is thus prepared for the project work done at Indiainfoline

Rajajinagar branch The topic of the project is ldquoComparative analysis of

investment in equity and mutual fund schemes with reference to IndiaInfolinerdquo

Investment means putting your money to work to earn more money If done

wisely it can help to meet ones financial goals like buying a new house paying

for a college education education enjoying a comfortable retirement or

whatever is important to an individual

One needs to make decisions about how much heshe wants to invest and where

to invest To choose he needs to know current good options available and their

relative risk exposures These help are given to a client in Indiainfoline as to in

which portfolio they can invest and what risks are related to it They manage all

the respected returns of their clients and timely inform them for the switching to

be done between funds in cases of expected downfall in returns of their Mutual

Funds in future

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 5

INDEX NO PARTICULAR

1 INDUSTRY PROFILE

FINANCIAL MARKETS

2 COMPANY PROFILE

INTRODUCTION TO INDIA INFOLINE

HISTORY OF INDAIINFOLINE

VISION

MISSION

COMPANYrsquoS PHILOSHOPY

COMMITTEE

COMPANY STRUCTURE

PRODUCT amp SERVICE

MILESTONES ACHIVED

MARKET SHARE OF COMPANY

CHALLENGE FACED BY INDIAINFOLINE

MARKETING STRATGY OF INDIAINFOLINE

HUMAN RESOURCES

3 RESEARCH METHODOLOGY

OBJECTIVE OF STUDY

DATA COLLECTION

FUNDAMENTAL RESEARCH SERVICE

TECHNICAL RESEARCH SERVICE

SWOT ANALYSIS

PORTERrsquoS FIVE FORCE MODEL

4 DATA ANALYSIS

FINANCIAL PERFORMANCE

P amp L ACCOUNT OF INDIAINFOLINE

BALANCE SHEET OF INDIAINFOLINE

COMPITITORS

COMPARATIVE ANALYSIS OF CHARGES amp

FACILITIES PROVIDED BY DIFFERENT COMPANY

PERFORMANCE HIGHLIGHT 2008-09

HIGHLIGHTS 2008-09 INDUSTRY OPTIMISM

5 FINDING

6 RECOMMENDATION

7 CONCLUSION

8 BIBLIOGRPHY

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 6

INDUSTRY PROFILE

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 7

INDUSTRY PROFILE

The Indian broking industry is one of the oldest trading industries that have

been around even before the establishment of the BSE in 1875 Despite

passing through number of changes in the post liberalization period the

industry has found its way onwards sustainable growth With the purpose of

gaining a deeper understanding about the role of the Indian stock broking

industry in the countryrsquos economy we present in this section some of the

industry insights gleaned from analysis of data received through primary

research

For the broking industry we started with an initial database of over

1800 broking firms that were contacted from which 464 responses were

received The list was further short listed based on the number of terminals

and the top 210 were selected for profiling 394 responses that provided

more than 85 of the information sought have been included for this analysis

presented here as insights All the data for the study was collected through

responses received directly from the broking firms The insights have been

arrived at through an analysis on various parameters pertinent to the equity

broking industry such as region terminal market branches sub brokers

products and growth areas

Some key characteristics of the sample 394 firms are

On the basis of geographical concentration the West region has the

maximum representation of 52 Around 24 firms are located in the

North 13 in the South and 10 in the East

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 8

3 firms started broking operations before 1950 65 between 1950-

1995 and 32 post 1995

On the basis of terminals 40 are located at Mumbai 12 in Delhi 8

in Ahmedabad 7 in Kolkata 4 in Chennai and 29 are from other

cities

From this study we find that almost 36 firms trade in cash and

derivatives and 27 are into cash markets alone Around 20 trade in

cash derivatives and commodities

In the cash market around 34 firms trade at NSE 14 at BSE and 52

trade at both exchanges In the derivative segment 48 trade at NSE

7 at BSE and 45 at both whereas in the debt market 31 trade at

NSE 26 at BSE and 43 at both exchanges

Majority of branches are located in the North ie around 40 West has

31 24 are located in South and 5 in East

In terms of sub-brokers around 55 are located in the South 29 in

West 11 in North and 4 in East

Trading IPOs and Mutual Funds are the top three products offered with

90 firms offering trading 67 IPOs and 53 firms offering mutual fund

transactions

In terms of various areas of growth 84 firms have expressed interest in

expanding their institutional clients 66 firms intend to increase FII

clients and 43 are interested in setting up JV in India and abroad

In terms of IT penetration 62 firms have provided their website and

around 94 firms have email facility

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 9

A BRIEF HISTORY

India Infoline was originally incorporated on October 18 1995 as

Probity Research and Services Private Limited at Mumbai under the Companies

Act 1956 with Registration No 11 93797 India Infoline commenced

operations as an independent provider of information analysis and research

covering Indian businesses financial markets and economy to institutional

customers India Infoline became a public limited company on April 28 2000

and the name of the Company was changed to Probity Research and Services

Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 India Infolinecom identified the potential of the Internet to

cater to a mass retail segment and transformed our business model from

providing information services to institutional customers to retail customers

Hence India Infoline launched Internet portal wwwindiainfolinecom in May

1999 and started providing news and market information independent

research interviews with business leaders and other specialized features

In May 2000 the name of India Infoline was changed to India

Infolinecom Limited to reflect the transformation of our business Over a

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 10

period of time India Infolinecom has emerged as one of the leading business

and financial information services provider in India

In the year 2000 India Infoline leveraged its position as a provider of

financial information and analysis by diversifying into transactional services

primarily for online trading in shares and securities and online as well as offline

distribution of personal financial products like mutual funds and RBI Bonds

These activities were carried on by our wholly owned subsidiaries

India Infoline broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July

2000 It combined competitive brokerage rates and research supported by

Internet technology besides investment advice from an experienced team of

research analysts India Infoline also offer real time stock quotes market news

and price charts with multiple tools for technical analysis

Facilities

India Infolinersquos main offices are located in approximately 4000 square

feet of office space located in Mumbai India India Infoline Branches

collectively occupy an additional 10000 square feet of office space located

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 11

throughout India As on March 31 2005 India Infoline has 73 branches across

36 locations in India

Terminals

Almost 52 of the terminals in the sample are based in the Western

region of India followed by 25 in the North 13 in the South and 10 in the

East Mumbai has got the maximum representation from the West Chennai

from the South New Delhi from the North and Kolkata from the East

Branches amp Sub-Brokers

The maximum concentration of branches is in the North with as many

as 40 of all branches located there followed by the Western region with

31 branches Around 24 branches are located in the South and East

constitutes for 5 of the total branches of the total sample

In case of sub-brokers almost 55 of them are based in the South West

and North follow with 30 and 11 sub-brokers respectively whereas East

has around 4 of total sub-brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 12

Financial Markets

The financial markets have been classified as cash market derivatives

market debt market and commodities market Cash market also known as

spot market is the most sought after amongst investors Majority of the

sample broking firms are dealing in the cash market followed by derivative

and commodities 27 firms are dealing only in the cash market whereas 35

are into cash and derivatives Almost 20 firms trade in cash derivatives and

commodities market Firms that are into cash derivatives and debt are 7 On

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13

the other hand firms into cash and commodities are 3 cash amp debt market

and commodities alone are 2 4 firms trade in all the markets

In the cash market around 34 firms trade at NSE 14 at BSE and 52

trade at both exchanges In the equity derivative market 48 of the sampled

broking houses are members of NSE and 7 trade at BSE while 45 of the

sample operate in both stock exchanges Around 43 of the broking houses

operating in the debt market trade at both exchanges with 31 and 26

firms uniquely at NSE and BSE respectively

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14

Products

The survey also revealed that in the past couple of years apart from

trading the firms have started offering various investment related value

added services The sustained growth of the economy in the past couple of

years has resulted in broking firms offering many diversified services related

to IPOs mutual funds company research etc However the core trading

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15

activity is still the predominant form of business forming 90 of the firms in

the sample 67 firms are engaged in offering IPO related services The

broking industry seems to have capitalized on the growth of the mutual fund

industry which was pegged at 40 in 2006 More than 50 of the sample

broking houses deal in mutual fund investment services The average growth

in assets under management in the last two years is almost 48 Company

research is another lucrative area where the broking firms offer their services

more than 33 of the firms are engaged in providing company research

services Additionally a host of other value added services such as

fundamental and technical analysis investment banking arbitrage etc are

offered by the firms at different levels

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16

Of the total sample of broking houses providing trading services 52 are

based in the West followed by 25 from North 13 from South and 10

from the East Around 50 of the firms offering IPO related services are based

in the West as compared to 27 in North 13 in South and 10 in East In

providing mutual funds services the Western region was dominant amounting

to 49 followed by 27 from North The South and the East are almost at par

with 13 and 11 respectively

Future Plans

68 of the firms from the sample have envisaged strategies for future

growth With the middle class Indian investor as well as foreign investor

willing to invest in the stock market majority of the firms preferred expansion

of institutional and the Foreign Institutional Investor clients in their areas of

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17

growth Around 84 have shown interest in expanding their institutional

client base Nearly 51 of such firms are located in the West 25 in North

15 are from South and 9 from East Since the past couple of years India

along with Korea and Taiwan has been one of the preferred destinations for

the FIIs With corporate restructuring rising market capitalization and sectoral

friendly policies helping the FIIs more than two thirds of the firms are

interested in increasing their FII client base Amongst these firms west again

has maximum representation of 53 followed by North with 22 South has

15 firms and East makes up for 9

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19

INTRODUCTION TO INDIAINFOLINE

IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an

independent business research and information provider We gradually evolved into a one-

stop financial services solutions provider Our strong management team comprises competent

and dedicated professionals

We are a pan-India financial services organization across 1361 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)

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 and

DGCX 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 ndash India Infoline Investment Services and Moneyline Credit

Limited ndash 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

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20

HISTROY OF INDIAINFOLINE

The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity

Research and Services Private Limited at Mumbai under the Companies Act 1956 with

Registration No 11 93797 The IndiaInfoline Group commenced its operations as an

independent provider of information analysis and research covering Indian businesses

financial markets and economy to institutional customers We became a public limited

company on April 28 2000 and the name of the Company was changed to Probity Research

and Services Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a

mass retail segment and transformed our business model from providing information services

to institutional customers to retail customers Hence we launched our Internet portal

wwwindiainfolinecom in May 1999 and started providing news and market information

independent research interviews with business leaders and other specialized features

In May 2000 the name of our Company was changed to India Infolinecom Limited

to reflect the transformation of our business Over a period of time we have emerged as one

of the leading business and financial information services provider in India

In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of

financial information and analysis by diversifying into transactional services primarily for

online trading in shares and securities and online as well as offline distribution of personal

financial products like mutual funds and RBI Bonds These activities were carried on by our

wholly owned subsidiaries

The India Infoline Grouprsquos broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July 2000 It

combined competitive brokerage rates and research supported by Internet technology

Besides investment advice from an experienced team of research analysts we also offer real

time stock quotes market news and price charts with multiple tools for technical analysis

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21

Acquisition of Agri Marketing Services Limited (Agri)

In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri

Marketing Services Limited from their owners in exchange for the issuance of 508482 of

our equity shares Agri was a direct selling agent of personal financial products including

mutual funds fixed deposits corporate bonds and post-office instruments At the time of our

acquisition Agri operated 32 branches in South and West India serving more than 30000

customers with a staff of approximately 180 employees After the acquisition we changed

the company name to India Infolinecom Distribution Company Limited

The India Infoline group comprising the holding company India Infoline Ltd (NSE

INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian

financial services space India Infoline offers the entire gamut of financial services covering

investment products ranging from Equities and derivatives Commodities Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment

Banking GoI bonds and other small savings instruments It owns and manages the website

wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal

finance stock markets economy and business

A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none

other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo

IndiaInfolinersquos research is available not just over the internet but also on international wire

services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is

amongst the most read Indian brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22

A network of 753 business locations spread over 346 cities across India facilitates the

smooth acquisition and servicing of a large customer base All these offices are connected

with the corporate office in Mumbai with cutting edge networking technology

The group caters to a customer base of over 500000 over a variety of mediums viz online

over the phone and at our branches The Group is strengthening its institutional broking and

investment banking services and has built a team of experienced research analysts sales and

trading professionals

IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will

give a more meaningful picture of the Company to the investors Reference to the company

or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise

specified

VISION

Our vision is to be the most respected company in the financial services space

MISSION

ldquoTo become a full-fledged financial services company known for its quality of advice

personalized services and cutting edge technologyrdquo

COMPANY PHILISOPHY

The IndiaInfoline Group is committed to placing the Investor First by continuously striving

to increase the efficiency of the operations as well as the systems and processes for use of

corporate resources in such a way so as to maximize the value to the stakeholders The Group

aims at achieving not only the highest possible standards of legal and regulatory compliances

but also of effective management

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23

COMMITTEE

Audit Committee

Terms of reference amp Composition Name of members and Chairman The Audit committee

comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv

Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and

Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as

under - To investigate into any matter that may be prescribed under the provisions of Section

292A of The Companies Act 1956 - Recommendation and removal of External Auditor and

fixation of the Audit Fees - Reviewing with the management the financial statements before

submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and

disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function

Compensation Remuneration Committee

Terms of reference amp Composition Name of members and Chairman The Compensation

Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr

Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of

reference of this committee are as under - To fix suitable remuneration package of all the

Executive Directors and Non Executive Directors Senior Employees and officers ie Salary

perquisites bonuses stock options pensions etc - Determination of the fixed component and

performance linked incentives alongwith the performance criteria to all employees of the

company - Service Contracts Notice Period Severance Fees of Directors and employees -

Stock Option details whether to be issued at discount as well as the period over which to be

accrued and over which exercisable - To conduct discussions with the HR department and

form suitable remuneration policies

Share Transfer and Investor Grievance Committee

Details of the Members Compliance Officer No of Complaints received and pending and

pending transfers as on close of the financial year The committee functions under the

Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24

Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R

Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance

Officer of the Company

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock

Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of

both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory

Services and Portfolio Management Services It offers broking services in the Cash and

Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with

NSDL as well as CDSL as a depository participant providing a one-stop solution for clients

trading in the equities market It has recently launched its Investment banking and

Institutional Broking business

A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients

These services are offered to clients as different schemes which are based on differing

investment strategies made to reflect the varied risk-return preferences of clients

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 4: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 4

PREFACE

PGDM program is one of the most reputed professional courses in the field of

Management Training is an integral part of PGDM (MBA) As a

complementary to that every trainee has to submit a report on the research work

conducted in that institute

This report is thus prepared for the project work done at Indiainfoline

Rajajinagar branch The topic of the project is ldquoComparative analysis of

investment in equity and mutual fund schemes with reference to IndiaInfolinerdquo

Investment means putting your money to work to earn more money If done

wisely it can help to meet ones financial goals like buying a new house paying

for a college education education enjoying a comfortable retirement or

whatever is important to an individual

One needs to make decisions about how much heshe wants to invest and where

to invest To choose he needs to know current good options available and their

relative risk exposures These help are given to a client in Indiainfoline as to in

which portfolio they can invest and what risks are related to it They manage all

the respected returns of their clients and timely inform them for the switching to

be done between funds in cases of expected downfall in returns of their Mutual

Funds in future

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 5

INDEX NO PARTICULAR

1 INDUSTRY PROFILE

FINANCIAL MARKETS

2 COMPANY PROFILE

INTRODUCTION TO INDIA INFOLINE

HISTORY OF INDAIINFOLINE

VISION

MISSION

COMPANYrsquoS PHILOSHOPY

COMMITTEE

COMPANY STRUCTURE

PRODUCT amp SERVICE

MILESTONES ACHIVED

MARKET SHARE OF COMPANY

CHALLENGE FACED BY INDIAINFOLINE

MARKETING STRATGY OF INDIAINFOLINE

HUMAN RESOURCES

3 RESEARCH METHODOLOGY

OBJECTIVE OF STUDY

DATA COLLECTION

FUNDAMENTAL RESEARCH SERVICE

TECHNICAL RESEARCH SERVICE

SWOT ANALYSIS

PORTERrsquoS FIVE FORCE MODEL

4 DATA ANALYSIS

FINANCIAL PERFORMANCE

P amp L ACCOUNT OF INDIAINFOLINE

BALANCE SHEET OF INDIAINFOLINE

COMPITITORS

COMPARATIVE ANALYSIS OF CHARGES amp

FACILITIES PROVIDED BY DIFFERENT COMPANY

PERFORMANCE HIGHLIGHT 2008-09

HIGHLIGHTS 2008-09 INDUSTRY OPTIMISM

5 FINDING

6 RECOMMENDATION

7 CONCLUSION

8 BIBLIOGRPHY

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 6

INDUSTRY PROFILE

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 7

INDUSTRY PROFILE

The Indian broking industry is one of the oldest trading industries that have

been around even before the establishment of the BSE in 1875 Despite

passing through number of changes in the post liberalization period the

industry has found its way onwards sustainable growth With the purpose of

gaining a deeper understanding about the role of the Indian stock broking

industry in the countryrsquos economy we present in this section some of the

industry insights gleaned from analysis of data received through primary

research

For the broking industry we started with an initial database of over

1800 broking firms that were contacted from which 464 responses were

received The list was further short listed based on the number of terminals

and the top 210 were selected for profiling 394 responses that provided

more than 85 of the information sought have been included for this analysis

presented here as insights All the data for the study was collected through

responses received directly from the broking firms The insights have been

arrived at through an analysis on various parameters pertinent to the equity

broking industry such as region terminal market branches sub brokers

products and growth areas

Some key characteristics of the sample 394 firms are

On the basis of geographical concentration the West region has the

maximum representation of 52 Around 24 firms are located in the

North 13 in the South and 10 in the East

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 8

3 firms started broking operations before 1950 65 between 1950-

1995 and 32 post 1995

On the basis of terminals 40 are located at Mumbai 12 in Delhi 8

in Ahmedabad 7 in Kolkata 4 in Chennai and 29 are from other

cities

From this study we find that almost 36 firms trade in cash and

derivatives and 27 are into cash markets alone Around 20 trade in

cash derivatives and commodities

In the cash market around 34 firms trade at NSE 14 at BSE and 52

trade at both exchanges In the derivative segment 48 trade at NSE

7 at BSE and 45 at both whereas in the debt market 31 trade at

NSE 26 at BSE and 43 at both exchanges

Majority of branches are located in the North ie around 40 West has

31 24 are located in South and 5 in East

In terms of sub-brokers around 55 are located in the South 29 in

West 11 in North and 4 in East

Trading IPOs and Mutual Funds are the top three products offered with

90 firms offering trading 67 IPOs and 53 firms offering mutual fund

transactions

In terms of various areas of growth 84 firms have expressed interest in

expanding their institutional clients 66 firms intend to increase FII

clients and 43 are interested in setting up JV in India and abroad

In terms of IT penetration 62 firms have provided their website and

around 94 firms have email facility

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 9

A BRIEF HISTORY

India Infoline was originally incorporated on October 18 1995 as

Probity Research and Services Private Limited at Mumbai under the Companies

Act 1956 with Registration No 11 93797 India Infoline commenced

operations as an independent provider of information analysis and research

covering Indian businesses financial markets and economy to institutional

customers India Infoline became a public limited company on April 28 2000

and the name of the Company was changed to Probity Research and Services

Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 India Infolinecom identified the potential of the Internet to

cater to a mass retail segment and transformed our business model from

providing information services to institutional customers to retail customers

Hence India Infoline launched Internet portal wwwindiainfolinecom in May

1999 and started providing news and market information independent

research interviews with business leaders and other specialized features

In May 2000 the name of India Infoline was changed to India

Infolinecom Limited to reflect the transformation of our business Over a

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 10

period of time India Infolinecom has emerged as one of the leading business

and financial information services provider in India

In the year 2000 India Infoline leveraged its position as a provider of

financial information and analysis by diversifying into transactional services

primarily for online trading in shares and securities and online as well as offline

distribution of personal financial products like mutual funds and RBI Bonds

These activities were carried on by our wholly owned subsidiaries

India Infoline broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July

2000 It combined competitive brokerage rates and research supported by

Internet technology besides investment advice from an experienced team of

research analysts India Infoline also offer real time stock quotes market news

and price charts with multiple tools for technical analysis

Facilities

India Infolinersquos main offices are located in approximately 4000 square

feet of office space located in Mumbai India India Infoline Branches

collectively occupy an additional 10000 square feet of office space located

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 11

throughout India As on March 31 2005 India Infoline has 73 branches across

36 locations in India

Terminals

Almost 52 of the terminals in the sample are based in the Western

region of India followed by 25 in the North 13 in the South and 10 in the

East Mumbai has got the maximum representation from the West Chennai

from the South New Delhi from the North and Kolkata from the East

Branches amp Sub-Brokers

The maximum concentration of branches is in the North with as many

as 40 of all branches located there followed by the Western region with

31 branches Around 24 branches are located in the South and East

constitutes for 5 of the total branches of the total sample

In case of sub-brokers almost 55 of them are based in the South West

and North follow with 30 and 11 sub-brokers respectively whereas East

has around 4 of total sub-brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 12

Financial Markets

The financial markets have been classified as cash market derivatives

market debt market and commodities market Cash market also known as

spot market is the most sought after amongst investors Majority of the

sample broking firms are dealing in the cash market followed by derivative

and commodities 27 firms are dealing only in the cash market whereas 35

are into cash and derivatives Almost 20 firms trade in cash derivatives and

commodities market Firms that are into cash derivatives and debt are 7 On

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13

the other hand firms into cash and commodities are 3 cash amp debt market

and commodities alone are 2 4 firms trade in all the markets

In the cash market around 34 firms trade at NSE 14 at BSE and 52

trade at both exchanges In the equity derivative market 48 of the sampled

broking houses are members of NSE and 7 trade at BSE while 45 of the

sample operate in both stock exchanges Around 43 of the broking houses

operating in the debt market trade at both exchanges with 31 and 26

firms uniquely at NSE and BSE respectively

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14

Products

The survey also revealed that in the past couple of years apart from

trading the firms have started offering various investment related value

added services The sustained growth of the economy in the past couple of

years has resulted in broking firms offering many diversified services related

to IPOs mutual funds company research etc However the core trading

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15

activity is still the predominant form of business forming 90 of the firms in

the sample 67 firms are engaged in offering IPO related services The

broking industry seems to have capitalized on the growth of the mutual fund

industry which was pegged at 40 in 2006 More than 50 of the sample

broking houses deal in mutual fund investment services The average growth

in assets under management in the last two years is almost 48 Company

research is another lucrative area where the broking firms offer their services

more than 33 of the firms are engaged in providing company research

services Additionally a host of other value added services such as

fundamental and technical analysis investment banking arbitrage etc are

offered by the firms at different levels

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16

Of the total sample of broking houses providing trading services 52 are

based in the West followed by 25 from North 13 from South and 10

from the East Around 50 of the firms offering IPO related services are based

in the West as compared to 27 in North 13 in South and 10 in East In

providing mutual funds services the Western region was dominant amounting

to 49 followed by 27 from North The South and the East are almost at par

with 13 and 11 respectively

Future Plans

68 of the firms from the sample have envisaged strategies for future

growth With the middle class Indian investor as well as foreign investor

willing to invest in the stock market majority of the firms preferred expansion

of institutional and the Foreign Institutional Investor clients in their areas of

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17

growth Around 84 have shown interest in expanding their institutional

client base Nearly 51 of such firms are located in the West 25 in North

15 are from South and 9 from East Since the past couple of years India

along with Korea and Taiwan has been one of the preferred destinations for

the FIIs With corporate restructuring rising market capitalization and sectoral

friendly policies helping the FIIs more than two thirds of the firms are

interested in increasing their FII client base Amongst these firms west again

has maximum representation of 53 followed by North with 22 South has

15 firms and East makes up for 9

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19

INTRODUCTION TO INDIAINFOLINE

IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an

independent business research and information provider We gradually evolved into a one-

stop financial services solutions provider Our strong management team comprises competent

and dedicated professionals

We are a pan-India financial services organization across 1361 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)

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 and

DGCX 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 ndash India Infoline Investment Services and Moneyline Credit

Limited ndash 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

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20

HISTROY OF INDIAINFOLINE

The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity

Research and Services Private Limited at Mumbai under the Companies Act 1956 with

Registration No 11 93797 The IndiaInfoline Group commenced its operations as an

independent provider of information analysis and research covering Indian businesses

financial markets and economy to institutional customers We became a public limited

company on April 28 2000 and the name of the Company was changed to Probity Research

and Services Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a

mass retail segment and transformed our business model from providing information services

to institutional customers to retail customers Hence we launched our Internet portal

wwwindiainfolinecom in May 1999 and started providing news and market information

independent research interviews with business leaders and other specialized features

In May 2000 the name of our Company was changed to India Infolinecom Limited

to reflect the transformation of our business Over a period of time we have emerged as one

of the leading business and financial information services provider in India

In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of

financial information and analysis by diversifying into transactional services primarily for

online trading in shares and securities and online as well as offline distribution of personal

financial products like mutual funds and RBI Bonds These activities were carried on by our

wholly owned subsidiaries

The India Infoline Grouprsquos broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July 2000 It

combined competitive brokerage rates and research supported by Internet technology

Besides investment advice from an experienced team of research analysts we also offer real

time stock quotes market news and price charts with multiple tools for technical analysis

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21

Acquisition of Agri Marketing Services Limited (Agri)

In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri

Marketing Services Limited from their owners in exchange for the issuance of 508482 of

our equity shares Agri was a direct selling agent of personal financial products including

mutual funds fixed deposits corporate bonds and post-office instruments At the time of our

acquisition Agri operated 32 branches in South and West India serving more than 30000

customers with a staff of approximately 180 employees After the acquisition we changed

the company name to India Infolinecom Distribution Company Limited

The India Infoline group comprising the holding company India Infoline Ltd (NSE

INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian

financial services space India Infoline offers the entire gamut of financial services covering

investment products ranging from Equities and derivatives Commodities Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment

Banking GoI bonds and other small savings instruments It owns and manages the website

wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal

finance stock markets economy and business

A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none

other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo

IndiaInfolinersquos research is available not just over the internet but also on international wire

services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is

amongst the most read Indian brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22

A network of 753 business locations spread over 346 cities across India facilitates the

smooth acquisition and servicing of a large customer base All these offices are connected

with the corporate office in Mumbai with cutting edge networking technology

The group caters to a customer base of over 500000 over a variety of mediums viz online

over the phone and at our branches The Group is strengthening its institutional broking and

investment banking services and has built a team of experienced research analysts sales and

trading professionals

IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will

give a more meaningful picture of the Company to the investors Reference to the company

or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise

specified

VISION

Our vision is to be the most respected company in the financial services space

MISSION

ldquoTo become a full-fledged financial services company known for its quality of advice

personalized services and cutting edge technologyrdquo

COMPANY PHILISOPHY

The IndiaInfoline Group is committed to placing the Investor First by continuously striving

to increase the efficiency of the operations as well as the systems and processes for use of

corporate resources in such a way so as to maximize the value to the stakeholders The Group

aims at achieving not only the highest possible standards of legal and regulatory compliances

but also of effective management

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23

COMMITTEE

Audit Committee

Terms of reference amp Composition Name of members and Chairman The Audit committee

comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv

Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and

Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as

under - To investigate into any matter that may be prescribed under the provisions of Section

292A of The Companies Act 1956 - Recommendation and removal of External Auditor and

fixation of the Audit Fees - Reviewing with the management the financial statements before

submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and

disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function

Compensation Remuneration Committee

Terms of reference amp Composition Name of members and Chairman The Compensation

Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr

Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of

reference of this committee are as under - To fix suitable remuneration package of all the

Executive Directors and Non Executive Directors Senior Employees and officers ie Salary

perquisites bonuses stock options pensions etc - Determination of the fixed component and

performance linked incentives alongwith the performance criteria to all employees of the

company - Service Contracts Notice Period Severance Fees of Directors and employees -

Stock Option details whether to be issued at discount as well as the period over which to be

accrued and over which exercisable - To conduct discussions with the HR department and

form suitable remuneration policies

Share Transfer and Investor Grievance Committee

Details of the Members Compliance Officer No of Complaints received and pending and

pending transfers as on close of the financial year The committee functions under the

Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24

Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R

Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance

Officer of the Company

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock

Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of

both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory

Services and Portfolio Management Services It offers broking services in the Cash and

Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with

NSDL as well as CDSL as a depository participant providing a one-stop solution for clients

trading in the equities market It has recently launched its Investment banking and

Institutional Broking business

A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients

These services are offered to clients as different schemes which are based on differing

investment strategies made to reflect the varied risk-return preferences of clients

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 5: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 5

INDEX NO PARTICULAR

1 INDUSTRY PROFILE

FINANCIAL MARKETS

2 COMPANY PROFILE

INTRODUCTION TO INDIA INFOLINE

HISTORY OF INDAIINFOLINE

VISION

MISSION

COMPANYrsquoS PHILOSHOPY

COMMITTEE

COMPANY STRUCTURE

PRODUCT amp SERVICE

MILESTONES ACHIVED

MARKET SHARE OF COMPANY

CHALLENGE FACED BY INDIAINFOLINE

MARKETING STRATGY OF INDIAINFOLINE

HUMAN RESOURCES

3 RESEARCH METHODOLOGY

OBJECTIVE OF STUDY

DATA COLLECTION

FUNDAMENTAL RESEARCH SERVICE

TECHNICAL RESEARCH SERVICE

SWOT ANALYSIS

PORTERrsquoS FIVE FORCE MODEL

4 DATA ANALYSIS

FINANCIAL PERFORMANCE

P amp L ACCOUNT OF INDIAINFOLINE

BALANCE SHEET OF INDIAINFOLINE

COMPITITORS

COMPARATIVE ANALYSIS OF CHARGES amp

FACILITIES PROVIDED BY DIFFERENT COMPANY

PERFORMANCE HIGHLIGHT 2008-09

HIGHLIGHTS 2008-09 INDUSTRY OPTIMISM

5 FINDING

6 RECOMMENDATION

7 CONCLUSION

8 BIBLIOGRPHY

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 6

INDUSTRY PROFILE

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 7

INDUSTRY PROFILE

The Indian broking industry is one of the oldest trading industries that have

been around even before the establishment of the BSE in 1875 Despite

passing through number of changes in the post liberalization period the

industry has found its way onwards sustainable growth With the purpose of

gaining a deeper understanding about the role of the Indian stock broking

industry in the countryrsquos economy we present in this section some of the

industry insights gleaned from analysis of data received through primary

research

For the broking industry we started with an initial database of over

1800 broking firms that were contacted from which 464 responses were

received The list was further short listed based on the number of terminals

and the top 210 were selected for profiling 394 responses that provided

more than 85 of the information sought have been included for this analysis

presented here as insights All the data for the study was collected through

responses received directly from the broking firms The insights have been

arrived at through an analysis on various parameters pertinent to the equity

broking industry such as region terminal market branches sub brokers

products and growth areas

Some key characteristics of the sample 394 firms are

On the basis of geographical concentration the West region has the

maximum representation of 52 Around 24 firms are located in the

North 13 in the South and 10 in the East

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 8

3 firms started broking operations before 1950 65 between 1950-

1995 and 32 post 1995

On the basis of terminals 40 are located at Mumbai 12 in Delhi 8

in Ahmedabad 7 in Kolkata 4 in Chennai and 29 are from other

cities

From this study we find that almost 36 firms trade in cash and

derivatives and 27 are into cash markets alone Around 20 trade in

cash derivatives and commodities

In the cash market around 34 firms trade at NSE 14 at BSE and 52

trade at both exchanges In the derivative segment 48 trade at NSE

7 at BSE and 45 at both whereas in the debt market 31 trade at

NSE 26 at BSE and 43 at both exchanges

Majority of branches are located in the North ie around 40 West has

31 24 are located in South and 5 in East

In terms of sub-brokers around 55 are located in the South 29 in

West 11 in North and 4 in East

Trading IPOs and Mutual Funds are the top three products offered with

90 firms offering trading 67 IPOs and 53 firms offering mutual fund

transactions

In terms of various areas of growth 84 firms have expressed interest in

expanding their institutional clients 66 firms intend to increase FII

clients and 43 are interested in setting up JV in India and abroad

In terms of IT penetration 62 firms have provided their website and

around 94 firms have email facility

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 9

A BRIEF HISTORY

India Infoline was originally incorporated on October 18 1995 as

Probity Research and Services Private Limited at Mumbai under the Companies

Act 1956 with Registration No 11 93797 India Infoline commenced

operations as an independent provider of information analysis and research

covering Indian businesses financial markets and economy to institutional

customers India Infoline became a public limited company on April 28 2000

and the name of the Company was changed to Probity Research and Services

Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 India Infolinecom identified the potential of the Internet to

cater to a mass retail segment and transformed our business model from

providing information services to institutional customers to retail customers

Hence India Infoline launched Internet portal wwwindiainfolinecom in May

1999 and started providing news and market information independent

research interviews with business leaders and other specialized features

In May 2000 the name of India Infoline was changed to India

Infolinecom Limited to reflect the transformation of our business Over a

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 10

period of time India Infolinecom has emerged as one of the leading business

and financial information services provider in India

In the year 2000 India Infoline leveraged its position as a provider of

financial information and analysis by diversifying into transactional services

primarily for online trading in shares and securities and online as well as offline

distribution of personal financial products like mutual funds and RBI Bonds

These activities were carried on by our wholly owned subsidiaries

India Infoline broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July

2000 It combined competitive brokerage rates and research supported by

Internet technology besides investment advice from an experienced team of

research analysts India Infoline also offer real time stock quotes market news

and price charts with multiple tools for technical analysis

Facilities

India Infolinersquos main offices are located in approximately 4000 square

feet of office space located in Mumbai India India Infoline Branches

collectively occupy an additional 10000 square feet of office space located

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 11

throughout India As on March 31 2005 India Infoline has 73 branches across

36 locations in India

Terminals

Almost 52 of the terminals in the sample are based in the Western

region of India followed by 25 in the North 13 in the South and 10 in the

East Mumbai has got the maximum representation from the West Chennai

from the South New Delhi from the North and Kolkata from the East

Branches amp Sub-Brokers

The maximum concentration of branches is in the North with as many

as 40 of all branches located there followed by the Western region with

31 branches Around 24 branches are located in the South and East

constitutes for 5 of the total branches of the total sample

In case of sub-brokers almost 55 of them are based in the South West

and North follow with 30 and 11 sub-brokers respectively whereas East

has around 4 of total sub-brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 12

Financial Markets

The financial markets have been classified as cash market derivatives

market debt market and commodities market Cash market also known as

spot market is the most sought after amongst investors Majority of the

sample broking firms are dealing in the cash market followed by derivative

and commodities 27 firms are dealing only in the cash market whereas 35

are into cash and derivatives Almost 20 firms trade in cash derivatives and

commodities market Firms that are into cash derivatives and debt are 7 On

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13

the other hand firms into cash and commodities are 3 cash amp debt market

and commodities alone are 2 4 firms trade in all the markets

In the cash market around 34 firms trade at NSE 14 at BSE and 52

trade at both exchanges In the equity derivative market 48 of the sampled

broking houses are members of NSE and 7 trade at BSE while 45 of the

sample operate in both stock exchanges Around 43 of the broking houses

operating in the debt market trade at both exchanges with 31 and 26

firms uniquely at NSE and BSE respectively

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14

Products

The survey also revealed that in the past couple of years apart from

trading the firms have started offering various investment related value

added services The sustained growth of the economy in the past couple of

years has resulted in broking firms offering many diversified services related

to IPOs mutual funds company research etc However the core trading

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15

activity is still the predominant form of business forming 90 of the firms in

the sample 67 firms are engaged in offering IPO related services The

broking industry seems to have capitalized on the growth of the mutual fund

industry which was pegged at 40 in 2006 More than 50 of the sample

broking houses deal in mutual fund investment services The average growth

in assets under management in the last two years is almost 48 Company

research is another lucrative area where the broking firms offer their services

more than 33 of the firms are engaged in providing company research

services Additionally a host of other value added services such as

fundamental and technical analysis investment banking arbitrage etc are

offered by the firms at different levels

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16

Of the total sample of broking houses providing trading services 52 are

based in the West followed by 25 from North 13 from South and 10

from the East Around 50 of the firms offering IPO related services are based

in the West as compared to 27 in North 13 in South and 10 in East In

providing mutual funds services the Western region was dominant amounting

to 49 followed by 27 from North The South and the East are almost at par

with 13 and 11 respectively

Future Plans

68 of the firms from the sample have envisaged strategies for future

growth With the middle class Indian investor as well as foreign investor

willing to invest in the stock market majority of the firms preferred expansion

of institutional and the Foreign Institutional Investor clients in their areas of

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17

growth Around 84 have shown interest in expanding their institutional

client base Nearly 51 of such firms are located in the West 25 in North

15 are from South and 9 from East Since the past couple of years India

along with Korea and Taiwan has been one of the preferred destinations for

the FIIs With corporate restructuring rising market capitalization and sectoral

friendly policies helping the FIIs more than two thirds of the firms are

interested in increasing their FII client base Amongst these firms west again

has maximum representation of 53 followed by North with 22 South has

15 firms and East makes up for 9

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19

INTRODUCTION TO INDIAINFOLINE

IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an

independent business research and information provider We gradually evolved into a one-

stop financial services solutions provider Our strong management team comprises competent

and dedicated professionals

We are a pan-India financial services organization across 1361 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)

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 and

DGCX 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 ndash India Infoline Investment Services and Moneyline Credit

Limited ndash 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

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20

HISTROY OF INDIAINFOLINE

The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity

Research and Services Private Limited at Mumbai under the Companies Act 1956 with

Registration No 11 93797 The IndiaInfoline Group commenced its operations as an

independent provider of information analysis and research covering Indian businesses

financial markets and economy to institutional customers We became a public limited

company on April 28 2000 and the name of the Company was changed to Probity Research

and Services Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a

mass retail segment and transformed our business model from providing information services

to institutional customers to retail customers Hence we launched our Internet portal

wwwindiainfolinecom in May 1999 and started providing news and market information

independent research interviews with business leaders and other specialized features

In May 2000 the name of our Company was changed to India Infolinecom Limited

to reflect the transformation of our business Over a period of time we have emerged as one

of the leading business and financial information services provider in India

In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of

financial information and analysis by diversifying into transactional services primarily for

online trading in shares and securities and online as well as offline distribution of personal

financial products like mutual funds and RBI Bonds These activities were carried on by our

wholly owned subsidiaries

The India Infoline Grouprsquos broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July 2000 It

combined competitive brokerage rates and research supported by Internet technology

Besides investment advice from an experienced team of research analysts we also offer real

time stock quotes market news and price charts with multiple tools for technical analysis

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21

Acquisition of Agri Marketing Services Limited (Agri)

In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri

Marketing Services Limited from their owners in exchange for the issuance of 508482 of

our equity shares Agri was a direct selling agent of personal financial products including

mutual funds fixed deposits corporate bonds and post-office instruments At the time of our

acquisition Agri operated 32 branches in South and West India serving more than 30000

customers with a staff of approximately 180 employees After the acquisition we changed

the company name to India Infolinecom Distribution Company Limited

The India Infoline group comprising the holding company India Infoline Ltd (NSE

INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian

financial services space India Infoline offers the entire gamut of financial services covering

investment products ranging from Equities and derivatives Commodities Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment

Banking GoI bonds and other small savings instruments It owns and manages the website

wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal

finance stock markets economy and business

A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none

other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo

IndiaInfolinersquos research is available not just over the internet but also on international wire

services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is

amongst the most read Indian brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22

A network of 753 business locations spread over 346 cities across India facilitates the

smooth acquisition and servicing of a large customer base All these offices are connected

with the corporate office in Mumbai with cutting edge networking technology

The group caters to a customer base of over 500000 over a variety of mediums viz online

over the phone and at our branches The Group is strengthening its institutional broking and

investment banking services and has built a team of experienced research analysts sales and

trading professionals

IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will

give a more meaningful picture of the Company to the investors Reference to the company

or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise

specified

VISION

Our vision is to be the most respected company in the financial services space

MISSION

ldquoTo become a full-fledged financial services company known for its quality of advice

personalized services and cutting edge technologyrdquo

COMPANY PHILISOPHY

The IndiaInfoline Group is committed to placing the Investor First by continuously striving

to increase the efficiency of the operations as well as the systems and processes for use of

corporate resources in such a way so as to maximize the value to the stakeholders The Group

aims at achieving not only the highest possible standards of legal and regulatory compliances

but also of effective management

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23

COMMITTEE

Audit Committee

Terms of reference amp Composition Name of members and Chairman The Audit committee

comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv

Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and

Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as

under - To investigate into any matter that may be prescribed under the provisions of Section

292A of The Companies Act 1956 - Recommendation and removal of External Auditor and

fixation of the Audit Fees - Reviewing with the management the financial statements before

submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and

disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function

Compensation Remuneration Committee

Terms of reference amp Composition Name of members and Chairman The Compensation

Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr

Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of

reference of this committee are as under - To fix suitable remuneration package of all the

Executive Directors and Non Executive Directors Senior Employees and officers ie Salary

perquisites bonuses stock options pensions etc - Determination of the fixed component and

performance linked incentives alongwith the performance criteria to all employees of the

company - Service Contracts Notice Period Severance Fees of Directors and employees -

Stock Option details whether to be issued at discount as well as the period over which to be

accrued and over which exercisable - To conduct discussions with the HR department and

form suitable remuneration policies

Share Transfer and Investor Grievance Committee

Details of the Members Compliance Officer No of Complaints received and pending and

pending transfers as on close of the financial year The committee functions under the

Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24

Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R

Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance

Officer of the Company

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock

Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of

both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory

Services and Portfolio Management Services It offers broking services in the Cash and

Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with

NSDL as well as CDSL as a depository participant providing a one-stop solution for clients

trading in the equities market It has recently launched its Investment banking and

Institutional Broking business

A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients

These services are offered to clients as different schemes which are based on differing

investment strategies made to reflect the varied risk-return preferences of clients

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 6: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 6

INDUSTRY PROFILE

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 7

INDUSTRY PROFILE

The Indian broking industry is one of the oldest trading industries that have

been around even before the establishment of the BSE in 1875 Despite

passing through number of changes in the post liberalization period the

industry has found its way onwards sustainable growth With the purpose of

gaining a deeper understanding about the role of the Indian stock broking

industry in the countryrsquos economy we present in this section some of the

industry insights gleaned from analysis of data received through primary

research

For the broking industry we started with an initial database of over

1800 broking firms that were contacted from which 464 responses were

received The list was further short listed based on the number of terminals

and the top 210 were selected for profiling 394 responses that provided

more than 85 of the information sought have been included for this analysis

presented here as insights All the data for the study was collected through

responses received directly from the broking firms The insights have been

arrived at through an analysis on various parameters pertinent to the equity

broking industry such as region terminal market branches sub brokers

products and growth areas

Some key characteristics of the sample 394 firms are

On the basis of geographical concentration the West region has the

maximum representation of 52 Around 24 firms are located in the

North 13 in the South and 10 in the East

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 8

3 firms started broking operations before 1950 65 between 1950-

1995 and 32 post 1995

On the basis of terminals 40 are located at Mumbai 12 in Delhi 8

in Ahmedabad 7 in Kolkata 4 in Chennai and 29 are from other

cities

From this study we find that almost 36 firms trade in cash and

derivatives and 27 are into cash markets alone Around 20 trade in

cash derivatives and commodities

In the cash market around 34 firms trade at NSE 14 at BSE and 52

trade at both exchanges In the derivative segment 48 trade at NSE

7 at BSE and 45 at both whereas in the debt market 31 trade at

NSE 26 at BSE and 43 at both exchanges

Majority of branches are located in the North ie around 40 West has

31 24 are located in South and 5 in East

In terms of sub-brokers around 55 are located in the South 29 in

West 11 in North and 4 in East

Trading IPOs and Mutual Funds are the top three products offered with

90 firms offering trading 67 IPOs and 53 firms offering mutual fund

transactions

In terms of various areas of growth 84 firms have expressed interest in

expanding their institutional clients 66 firms intend to increase FII

clients and 43 are interested in setting up JV in India and abroad

In terms of IT penetration 62 firms have provided their website and

around 94 firms have email facility

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 9

A BRIEF HISTORY

India Infoline was originally incorporated on October 18 1995 as

Probity Research and Services Private Limited at Mumbai under the Companies

Act 1956 with Registration No 11 93797 India Infoline commenced

operations as an independent provider of information analysis and research

covering Indian businesses financial markets and economy to institutional

customers India Infoline became a public limited company on April 28 2000

and the name of the Company was changed to Probity Research and Services

Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 India Infolinecom identified the potential of the Internet to

cater to a mass retail segment and transformed our business model from

providing information services to institutional customers to retail customers

Hence India Infoline launched Internet portal wwwindiainfolinecom in May

1999 and started providing news and market information independent

research interviews with business leaders and other specialized features

In May 2000 the name of India Infoline was changed to India

Infolinecom Limited to reflect the transformation of our business Over a

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 10

period of time India Infolinecom has emerged as one of the leading business

and financial information services provider in India

In the year 2000 India Infoline leveraged its position as a provider of

financial information and analysis by diversifying into transactional services

primarily for online trading in shares and securities and online as well as offline

distribution of personal financial products like mutual funds and RBI Bonds

These activities were carried on by our wholly owned subsidiaries

India Infoline broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July

2000 It combined competitive brokerage rates and research supported by

Internet technology besides investment advice from an experienced team of

research analysts India Infoline also offer real time stock quotes market news

and price charts with multiple tools for technical analysis

Facilities

India Infolinersquos main offices are located in approximately 4000 square

feet of office space located in Mumbai India India Infoline Branches

collectively occupy an additional 10000 square feet of office space located

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 11

throughout India As on March 31 2005 India Infoline has 73 branches across

36 locations in India

Terminals

Almost 52 of the terminals in the sample are based in the Western

region of India followed by 25 in the North 13 in the South and 10 in the

East Mumbai has got the maximum representation from the West Chennai

from the South New Delhi from the North and Kolkata from the East

Branches amp Sub-Brokers

The maximum concentration of branches is in the North with as many

as 40 of all branches located there followed by the Western region with

31 branches Around 24 branches are located in the South and East

constitutes for 5 of the total branches of the total sample

In case of sub-brokers almost 55 of them are based in the South West

and North follow with 30 and 11 sub-brokers respectively whereas East

has around 4 of total sub-brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 12

Financial Markets

The financial markets have been classified as cash market derivatives

market debt market and commodities market Cash market also known as

spot market is the most sought after amongst investors Majority of the

sample broking firms are dealing in the cash market followed by derivative

and commodities 27 firms are dealing only in the cash market whereas 35

are into cash and derivatives Almost 20 firms trade in cash derivatives and

commodities market Firms that are into cash derivatives and debt are 7 On

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13

the other hand firms into cash and commodities are 3 cash amp debt market

and commodities alone are 2 4 firms trade in all the markets

In the cash market around 34 firms trade at NSE 14 at BSE and 52

trade at both exchanges In the equity derivative market 48 of the sampled

broking houses are members of NSE and 7 trade at BSE while 45 of the

sample operate in both stock exchanges Around 43 of the broking houses

operating in the debt market trade at both exchanges with 31 and 26

firms uniquely at NSE and BSE respectively

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14

Products

The survey also revealed that in the past couple of years apart from

trading the firms have started offering various investment related value

added services The sustained growth of the economy in the past couple of

years has resulted in broking firms offering many diversified services related

to IPOs mutual funds company research etc However the core trading

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15

activity is still the predominant form of business forming 90 of the firms in

the sample 67 firms are engaged in offering IPO related services The

broking industry seems to have capitalized on the growth of the mutual fund

industry which was pegged at 40 in 2006 More than 50 of the sample

broking houses deal in mutual fund investment services The average growth

in assets under management in the last two years is almost 48 Company

research is another lucrative area where the broking firms offer their services

more than 33 of the firms are engaged in providing company research

services Additionally a host of other value added services such as

fundamental and technical analysis investment banking arbitrage etc are

offered by the firms at different levels

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16

Of the total sample of broking houses providing trading services 52 are

based in the West followed by 25 from North 13 from South and 10

from the East Around 50 of the firms offering IPO related services are based

in the West as compared to 27 in North 13 in South and 10 in East In

providing mutual funds services the Western region was dominant amounting

to 49 followed by 27 from North The South and the East are almost at par

with 13 and 11 respectively

Future Plans

68 of the firms from the sample have envisaged strategies for future

growth With the middle class Indian investor as well as foreign investor

willing to invest in the stock market majority of the firms preferred expansion

of institutional and the Foreign Institutional Investor clients in their areas of

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17

growth Around 84 have shown interest in expanding their institutional

client base Nearly 51 of such firms are located in the West 25 in North

15 are from South and 9 from East Since the past couple of years India

along with Korea and Taiwan has been one of the preferred destinations for

the FIIs With corporate restructuring rising market capitalization and sectoral

friendly policies helping the FIIs more than two thirds of the firms are

interested in increasing their FII client base Amongst these firms west again

has maximum representation of 53 followed by North with 22 South has

15 firms and East makes up for 9

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19

INTRODUCTION TO INDIAINFOLINE

IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an

independent business research and information provider We gradually evolved into a one-

stop financial services solutions provider Our strong management team comprises competent

and dedicated professionals

We are a pan-India financial services organization across 1361 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)

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 and

DGCX 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 ndash India Infoline Investment Services and Moneyline Credit

Limited ndash 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

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20

HISTROY OF INDIAINFOLINE

The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity

Research and Services Private Limited at Mumbai under the Companies Act 1956 with

Registration No 11 93797 The IndiaInfoline Group commenced its operations as an

independent provider of information analysis and research covering Indian businesses

financial markets and economy to institutional customers We became a public limited

company on April 28 2000 and the name of the Company was changed to Probity Research

and Services Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a

mass retail segment and transformed our business model from providing information services

to institutional customers to retail customers Hence we launched our Internet portal

wwwindiainfolinecom in May 1999 and started providing news and market information

independent research interviews with business leaders and other specialized features

In May 2000 the name of our Company was changed to India Infolinecom Limited

to reflect the transformation of our business Over a period of time we have emerged as one

of the leading business and financial information services provider in India

In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of

financial information and analysis by diversifying into transactional services primarily for

online trading in shares and securities and online as well as offline distribution of personal

financial products like mutual funds and RBI Bonds These activities were carried on by our

wholly owned subsidiaries

The India Infoline Grouprsquos broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July 2000 It

combined competitive brokerage rates and research supported by Internet technology

Besides investment advice from an experienced team of research analysts we also offer real

time stock quotes market news and price charts with multiple tools for technical analysis

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21

Acquisition of Agri Marketing Services Limited (Agri)

In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri

Marketing Services Limited from their owners in exchange for the issuance of 508482 of

our equity shares Agri was a direct selling agent of personal financial products including

mutual funds fixed deposits corporate bonds and post-office instruments At the time of our

acquisition Agri operated 32 branches in South and West India serving more than 30000

customers with a staff of approximately 180 employees After the acquisition we changed

the company name to India Infolinecom Distribution Company Limited

The India Infoline group comprising the holding company India Infoline Ltd (NSE

INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian

financial services space India Infoline offers the entire gamut of financial services covering

investment products ranging from Equities and derivatives Commodities Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment

Banking GoI bonds and other small savings instruments It owns and manages the website

wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal

finance stock markets economy and business

A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none

other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo

IndiaInfolinersquos research is available not just over the internet but also on international wire

services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is

amongst the most read Indian brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22

A network of 753 business locations spread over 346 cities across India facilitates the

smooth acquisition and servicing of a large customer base All these offices are connected

with the corporate office in Mumbai with cutting edge networking technology

The group caters to a customer base of over 500000 over a variety of mediums viz online

over the phone and at our branches The Group is strengthening its institutional broking and

investment banking services and has built a team of experienced research analysts sales and

trading professionals

IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will

give a more meaningful picture of the Company to the investors Reference to the company

or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise

specified

VISION

Our vision is to be the most respected company in the financial services space

MISSION

ldquoTo become a full-fledged financial services company known for its quality of advice

personalized services and cutting edge technologyrdquo

COMPANY PHILISOPHY

The IndiaInfoline Group is committed to placing the Investor First by continuously striving

to increase the efficiency of the operations as well as the systems and processes for use of

corporate resources in such a way so as to maximize the value to the stakeholders The Group

aims at achieving not only the highest possible standards of legal and regulatory compliances

but also of effective management

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23

COMMITTEE

Audit Committee

Terms of reference amp Composition Name of members and Chairman The Audit committee

comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv

Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and

Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as

under - To investigate into any matter that may be prescribed under the provisions of Section

292A of The Companies Act 1956 - Recommendation and removal of External Auditor and

fixation of the Audit Fees - Reviewing with the management the financial statements before

submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and

disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function

Compensation Remuneration Committee

Terms of reference amp Composition Name of members and Chairman The Compensation

Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr

Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of

reference of this committee are as under - To fix suitable remuneration package of all the

Executive Directors and Non Executive Directors Senior Employees and officers ie Salary

perquisites bonuses stock options pensions etc - Determination of the fixed component and

performance linked incentives alongwith the performance criteria to all employees of the

company - Service Contracts Notice Period Severance Fees of Directors and employees -

Stock Option details whether to be issued at discount as well as the period over which to be

accrued and over which exercisable - To conduct discussions with the HR department and

form suitable remuneration policies

Share Transfer and Investor Grievance Committee

Details of the Members Compliance Officer No of Complaints received and pending and

pending transfers as on close of the financial year The committee functions under the

Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24

Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R

Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance

Officer of the Company

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock

Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of

both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory

Services and Portfolio Management Services It offers broking services in the Cash and

Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with

NSDL as well as CDSL as a depository participant providing a one-stop solution for clients

trading in the equities market It has recently launched its Investment banking and

Institutional Broking business

A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients

These services are offered to clients as different schemes which are based on differing

investment strategies made to reflect the varied risk-return preferences of clients

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 7: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 7

INDUSTRY PROFILE

The Indian broking industry is one of the oldest trading industries that have

been around even before the establishment of the BSE in 1875 Despite

passing through number of changes in the post liberalization period the

industry has found its way onwards sustainable growth With the purpose of

gaining a deeper understanding about the role of the Indian stock broking

industry in the countryrsquos economy we present in this section some of the

industry insights gleaned from analysis of data received through primary

research

For the broking industry we started with an initial database of over

1800 broking firms that were contacted from which 464 responses were

received The list was further short listed based on the number of terminals

and the top 210 were selected for profiling 394 responses that provided

more than 85 of the information sought have been included for this analysis

presented here as insights All the data for the study was collected through

responses received directly from the broking firms The insights have been

arrived at through an analysis on various parameters pertinent to the equity

broking industry such as region terminal market branches sub brokers

products and growth areas

Some key characteristics of the sample 394 firms are

On the basis of geographical concentration the West region has the

maximum representation of 52 Around 24 firms are located in the

North 13 in the South and 10 in the East

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 8

3 firms started broking operations before 1950 65 between 1950-

1995 and 32 post 1995

On the basis of terminals 40 are located at Mumbai 12 in Delhi 8

in Ahmedabad 7 in Kolkata 4 in Chennai and 29 are from other

cities

From this study we find that almost 36 firms trade in cash and

derivatives and 27 are into cash markets alone Around 20 trade in

cash derivatives and commodities

In the cash market around 34 firms trade at NSE 14 at BSE and 52

trade at both exchanges In the derivative segment 48 trade at NSE

7 at BSE and 45 at both whereas in the debt market 31 trade at

NSE 26 at BSE and 43 at both exchanges

Majority of branches are located in the North ie around 40 West has

31 24 are located in South and 5 in East

In terms of sub-brokers around 55 are located in the South 29 in

West 11 in North and 4 in East

Trading IPOs and Mutual Funds are the top three products offered with

90 firms offering trading 67 IPOs and 53 firms offering mutual fund

transactions

In terms of various areas of growth 84 firms have expressed interest in

expanding their institutional clients 66 firms intend to increase FII

clients and 43 are interested in setting up JV in India and abroad

In terms of IT penetration 62 firms have provided their website and

around 94 firms have email facility

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 9

A BRIEF HISTORY

India Infoline was originally incorporated on October 18 1995 as

Probity Research and Services Private Limited at Mumbai under the Companies

Act 1956 with Registration No 11 93797 India Infoline commenced

operations as an independent provider of information analysis and research

covering Indian businesses financial markets and economy to institutional

customers India Infoline became a public limited company on April 28 2000

and the name of the Company was changed to Probity Research and Services

Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 India Infolinecom identified the potential of the Internet to

cater to a mass retail segment and transformed our business model from

providing information services to institutional customers to retail customers

Hence India Infoline launched Internet portal wwwindiainfolinecom in May

1999 and started providing news and market information independent

research interviews with business leaders and other specialized features

In May 2000 the name of India Infoline was changed to India

Infolinecom Limited to reflect the transformation of our business Over a

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 10

period of time India Infolinecom has emerged as one of the leading business

and financial information services provider in India

In the year 2000 India Infoline leveraged its position as a provider of

financial information and analysis by diversifying into transactional services

primarily for online trading in shares and securities and online as well as offline

distribution of personal financial products like mutual funds and RBI Bonds

These activities were carried on by our wholly owned subsidiaries

India Infoline broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July

2000 It combined competitive brokerage rates and research supported by

Internet technology besides investment advice from an experienced team of

research analysts India Infoline also offer real time stock quotes market news

and price charts with multiple tools for technical analysis

Facilities

India Infolinersquos main offices are located in approximately 4000 square

feet of office space located in Mumbai India India Infoline Branches

collectively occupy an additional 10000 square feet of office space located

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 11

throughout India As on March 31 2005 India Infoline has 73 branches across

36 locations in India

Terminals

Almost 52 of the terminals in the sample are based in the Western

region of India followed by 25 in the North 13 in the South and 10 in the

East Mumbai has got the maximum representation from the West Chennai

from the South New Delhi from the North and Kolkata from the East

Branches amp Sub-Brokers

The maximum concentration of branches is in the North with as many

as 40 of all branches located there followed by the Western region with

31 branches Around 24 branches are located in the South and East

constitutes for 5 of the total branches of the total sample

In case of sub-brokers almost 55 of them are based in the South West

and North follow with 30 and 11 sub-brokers respectively whereas East

has around 4 of total sub-brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 12

Financial Markets

The financial markets have been classified as cash market derivatives

market debt market and commodities market Cash market also known as

spot market is the most sought after amongst investors Majority of the

sample broking firms are dealing in the cash market followed by derivative

and commodities 27 firms are dealing only in the cash market whereas 35

are into cash and derivatives Almost 20 firms trade in cash derivatives and

commodities market Firms that are into cash derivatives and debt are 7 On

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13

the other hand firms into cash and commodities are 3 cash amp debt market

and commodities alone are 2 4 firms trade in all the markets

In the cash market around 34 firms trade at NSE 14 at BSE and 52

trade at both exchanges In the equity derivative market 48 of the sampled

broking houses are members of NSE and 7 trade at BSE while 45 of the

sample operate in both stock exchanges Around 43 of the broking houses

operating in the debt market trade at both exchanges with 31 and 26

firms uniquely at NSE and BSE respectively

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14

Products

The survey also revealed that in the past couple of years apart from

trading the firms have started offering various investment related value

added services The sustained growth of the economy in the past couple of

years has resulted in broking firms offering many diversified services related

to IPOs mutual funds company research etc However the core trading

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15

activity is still the predominant form of business forming 90 of the firms in

the sample 67 firms are engaged in offering IPO related services The

broking industry seems to have capitalized on the growth of the mutual fund

industry which was pegged at 40 in 2006 More than 50 of the sample

broking houses deal in mutual fund investment services The average growth

in assets under management in the last two years is almost 48 Company

research is another lucrative area where the broking firms offer their services

more than 33 of the firms are engaged in providing company research

services Additionally a host of other value added services such as

fundamental and technical analysis investment banking arbitrage etc are

offered by the firms at different levels

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16

Of the total sample of broking houses providing trading services 52 are

based in the West followed by 25 from North 13 from South and 10

from the East Around 50 of the firms offering IPO related services are based

in the West as compared to 27 in North 13 in South and 10 in East In

providing mutual funds services the Western region was dominant amounting

to 49 followed by 27 from North The South and the East are almost at par

with 13 and 11 respectively

Future Plans

68 of the firms from the sample have envisaged strategies for future

growth With the middle class Indian investor as well as foreign investor

willing to invest in the stock market majority of the firms preferred expansion

of institutional and the Foreign Institutional Investor clients in their areas of

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17

growth Around 84 have shown interest in expanding their institutional

client base Nearly 51 of such firms are located in the West 25 in North

15 are from South and 9 from East Since the past couple of years India

along with Korea and Taiwan has been one of the preferred destinations for

the FIIs With corporate restructuring rising market capitalization and sectoral

friendly policies helping the FIIs more than two thirds of the firms are

interested in increasing their FII client base Amongst these firms west again

has maximum representation of 53 followed by North with 22 South has

15 firms and East makes up for 9

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19

INTRODUCTION TO INDIAINFOLINE

IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an

independent business research and information provider We gradually evolved into a one-

stop financial services solutions provider Our strong management team comprises competent

and dedicated professionals

We are a pan-India financial services organization across 1361 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)

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 and

DGCX 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 ndash India Infoline Investment Services and Moneyline Credit

Limited ndash 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

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20

HISTROY OF INDIAINFOLINE

The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity

Research and Services Private Limited at Mumbai under the Companies Act 1956 with

Registration No 11 93797 The IndiaInfoline Group commenced its operations as an

independent provider of information analysis and research covering Indian businesses

financial markets and economy to institutional customers We became a public limited

company on April 28 2000 and the name of the Company was changed to Probity Research

and Services Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a

mass retail segment and transformed our business model from providing information services

to institutional customers to retail customers Hence we launched our Internet portal

wwwindiainfolinecom in May 1999 and started providing news and market information

independent research interviews with business leaders and other specialized features

In May 2000 the name of our Company was changed to India Infolinecom Limited

to reflect the transformation of our business Over a period of time we have emerged as one

of the leading business and financial information services provider in India

In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of

financial information and analysis by diversifying into transactional services primarily for

online trading in shares and securities and online as well as offline distribution of personal

financial products like mutual funds and RBI Bonds These activities were carried on by our

wholly owned subsidiaries

The India Infoline Grouprsquos broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July 2000 It

combined competitive brokerage rates and research supported by Internet technology

Besides investment advice from an experienced team of research analysts we also offer real

time stock quotes market news and price charts with multiple tools for technical analysis

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21

Acquisition of Agri Marketing Services Limited (Agri)

In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri

Marketing Services Limited from their owners in exchange for the issuance of 508482 of

our equity shares Agri was a direct selling agent of personal financial products including

mutual funds fixed deposits corporate bonds and post-office instruments At the time of our

acquisition Agri operated 32 branches in South and West India serving more than 30000

customers with a staff of approximately 180 employees After the acquisition we changed

the company name to India Infolinecom Distribution Company Limited

The India Infoline group comprising the holding company India Infoline Ltd (NSE

INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian

financial services space India Infoline offers the entire gamut of financial services covering

investment products ranging from Equities and derivatives Commodities Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment

Banking GoI bonds and other small savings instruments It owns and manages the website

wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal

finance stock markets economy and business

A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none

other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo

IndiaInfolinersquos research is available not just over the internet but also on international wire

services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is

amongst the most read Indian brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22

A network of 753 business locations spread over 346 cities across India facilitates the

smooth acquisition and servicing of a large customer base All these offices are connected

with the corporate office in Mumbai with cutting edge networking technology

The group caters to a customer base of over 500000 over a variety of mediums viz online

over the phone and at our branches The Group is strengthening its institutional broking and

investment banking services and has built a team of experienced research analysts sales and

trading professionals

IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will

give a more meaningful picture of the Company to the investors Reference to the company

or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise

specified

VISION

Our vision is to be the most respected company in the financial services space

MISSION

ldquoTo become a full-fledged financial services company known for its quality of advice

personalized services and cutting edge technologyrdquo

COMPANY PHILISOPHY

The IndiaInfoline Group is committed to placing the Investor First by continuously striving

to increase the efficiency of the operations as well as the systems and processes for use of

corporate resources in such a way so as to maximize the value to the stakeholders The Group

aims at achieving not only the highest possible standards of legal and regulatory compliances

but also of effective management

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23

COMMITTEE

Audit Committee

Terms of reference amp Composition Name of members and Chairman The Audit committee

comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv

Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and

Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as

under - To investigate into any matter that may be prescribed under the provisions of Section

292A of The Companies Act 1956 - Recommendation and removal of External Auditor and

fixation of the Audit Fees - Reviewing with the management the financial statements before

submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and

disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function

Compensation Remuneration Committee

Terms of reference amp Composition Name of members and Chairman The Compensation

Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr

Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of

reference of this committee are as under - To fix suitable remuneration package of all the

Executive Directors and Non Executive Directors Senior Employees and officers ie Salary

perquisites bonuses stock options pensions etc - Determination of the fixed component and

performance linked incentives alongwith the performance criteria to all employees of the

company - Service Contracts Notice Period Severance Fees of Directors and employees -

Stock Option details whether to be issued at discount as well as the period over which to be

accrued and over which exercisable - To conduct discussions with the HR department and

form suitable remuneration policies

Share Transfer and Investor Grievance Committee

Details of the Members Compliance Officer No of Complaints received and pending and

pending transfers as on close of the financial year The committee functions under the

Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24

Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R

Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance

Officer of the Company

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock

Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of

both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory

Services and Portfolio Management Services It offers broking services in the Cash and

Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with

NSDL as well as CDSL as a depository participant providing a one-stop solution for clients

trading in the equities market It has recently launched its Investment banking and

Institutional Broking business

A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients

These services are offered to clients as different schemes which are based on differing

investment strategies made to reflect the varied risk-return preferences of clients

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 8: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 8

3 firms started broking operations before 1950 65 between 1950-

1995 and 32 post 1995

On the basis of terminals 40 are located at Mumbai 12 in Delhi 8

in Ahmedabad 7 in Kolkata 4 in Chennai and 29 are from other

cities

From this study we find that almost 36 firms trade in cash and

derivatives and 27 are into cash markets alone Around 20 trade in

cash derivatives and commodities

In the cash market around 34 firms trade at NSE 14 at BSE and 52

trade at both exchanges In the derivative segment 48 trade at NSE

7 at BSE and 45 at both whereas in the debt market 31 trade at

NSE 26 at BSE and 43 at both exchanges

Majority of branches are located in the North ie around 40 West has

31 24 are located in South and 5 in East

In terms of sub-brokers around 55 are located in the South 29 in

West 11 in North and 4 in East

Trading IPOs and Mutual Funds are the top three products offered with

90 firms offering trading 67 IPOs and 53 firms offering mutual fund

transactions

In terms of various areas of growth 84 firms have expressed interest in

expanding their institutional clients 66 firms intend to increase FII

clients and 43 are interested in setting up JV in India and abroad

In terms of IT penetration 62 firms have provided their website and

around 94 firms have email facility

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 9

A BRIEF HISTORY

India Infoline was originally incorporated on October 18 1995 as

Probity Research and Services Private Limited at Mumbai under the Companies

Act 1956 with Registration No 11 93797 India Infoline commenced

operations as an independent provider of information analysis and research

covering Indian businesses financial markets and economy to institutional

customers India Infoline became a public limited company on April 28 2000

and the name of the Company was changed to Probity Research and Services

Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 India Infolinecom identified the potential of the Internet to

cater to a mass retail segment and transformed our business model from

providing information services to institutional customers to retail customers

Hence India Infoline launched Internet portal wwwindiainfolinecom in May

1999 and started providing news and market information independent

research interviews with business leaders and other specialized features

In May 2000 the name of India Infoline was changed to India

Infolinecom Limited to reflect the transformation of our business Over a

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 10

period of time India Infolinecom has emerged as one of the leading business

and financial information services provider in India

In the year 2000 India Infoline leveraged its position as a provider of

financial information and analysis by diversifying into transactional services

primarily for online trading in shares and securities and online as well as offline

distribution of personal financial products like mutual funds and RBI Bonds

These activities were carried on by our wholly owned subsidiaries

India Infoline broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July

2000 It combined competitive brokerage rates and research supported by

Internet technology besides investment advice from an experienced team of

research analysts India Infoline also offer real time stock quotes market news

and price charts with multiple tools for technical analysis

Facilities

India Infolinersquos main offices are located in approximately 4000 square

feet of office space located in Mumbai India India Infoline Branches

collectively occupy an additional 10000 square feet of office space located

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 11

throughout India As on March 31 2005 India Infoline has 73 branches across

36 locations in India

Terminals

Almost 52 of the terminals in the sample are based in the Western

region of India followed by 25 in the North 13 in the South and 10 in the

East Mumbai has got the maximum representation from the West Chennai

from the South New Delhi from the North and Kolkata from the East

Branches amp Sub-Brokers

The maximum concentration of branches is in the North with as many

as 40 of all branches located there followed by the Western region with

31 branches Around 24 branches are located in the South and East

constitutes for 5 of the total branches of the total sample

In case of sub-brokers almost 55 of them are based in the South West

and North follow with 30 and 11 sub-brokers respectively whereas East

has around 4 of total sub-brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 12

Financial Markets

The financial markets have been classified as cash market derivatives

market debt market and commodities market Cash market also known as

spot market is the most sought after amongst investors Majority of the

sample broking firms are dealing in the cash market followed by derivative

and commodities 27 firms are dealing only in the cash market whereas 35

are into cash and derivatives Almost 20 firms trade in cash derivatives and

commodities market Firms that are into cash derivatives and debt are 7 On

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13

the other hand firms into cash and commodities are 3 cash amp debt market

and commodities alone are 2 4 firms trade in all the markets

In the cash market around 34 firms trade at NSE 14 at BSE and 52

trade at both exchanges In the equity derivative market 48 of the sampled

broking houses are members of NSE and 7 trade at BSE while 45 of the

sample operate in both stock exchanges Around 43 of the broking houses

operating in the debt market trade at both exchanges with 31 and 26

firms uniquely at NSE and BSE respectively

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14

Products

The survey also revealed that in the past couple of years apart from

trading the firms have started offering various investment related value

added services The sustained growth of the economy in the past couple of

years has resulted in broking firms offering many diversified services related

to IPOs mutual funds company research etc However the core trading

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15

activity is still the predominant form of business forming 90 of the firms in

the sample 67 firms are engaged in offering IPO related services The

broking industry seems to have capitalized on the growth of the mutual fund

industry which was pegged at 40 in 2006 More than 50 of the sample

broking houses deal in mutual fund investment services The average growth

in assets under management in the last two years is almost 48 Company

research is another lucrative area where the broking firms offer their services

more than 33 of the firms are engaged in providing company research

services Additionally a host of other value added services such as

fundamental and technical analysis investment banking arbitrage etc are

offered by the firms at different levels

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16

Of the total sample of broking houses providing trading services 52 are

based in the West followed by 25 from North 13 from South and 10

from the East Around 50 of the firms offering IPO related services are based

in the West as compared to 27 in North 13 in South and 10 in East In

providing mutual funds services the Western region was dominant amounting

to 49 followed by 27 from North The South and the East are almost at par

with 13 and 11 respectively

Future Plans

68 of the firms from the sample have envisaged strategies for future

growth With the middle class Indian investor as well as foreign investor

willing to invest in the stock market majority of the firms preferred expansion

of institutional and the Foreign Institutional Investor clients in their areas of

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17

growth Around 84 have shown interest in expanding their institutional

client base Nearly 51 of such firms are located in the West 25 in North

15 are from South and 9 from East Since the past couple of years India

along with Korea and Taiwan has been one of the preferred destinations for

the FIIs With corporate restructuring rising market capitalization and sectoral

friendly policies helping the FIIs more than two thirds of the firms are

interested in increasing their FII client base Amongst these firms west again

has maximum representation of 53 followed by North with 22 South has

15 firms and East makes up for 9

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19

INTRODUCTION TO INDIAINFOLINE

IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an

independent business research and information provider We gradually evolved into a one-

stop financial services solutions provider Our strong management team comprises competent

and dedicated professionals

We are a pan-India financial services organization across 1361 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)

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 and

DGCX 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 ndash India Infoline Investment Services and Moneyline Credit

Limited ndash 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

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20

HISTROY OF INDIAINFOLINE

The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity

Research and Services Private Limited at Mumbai under the Companies Act 1956 with

Registration No 11 93797 The IndiaInfoline Group commenced its operations as an

independent provider of information analysis and research covering Indian businesses

financial markets and economy to institutional customers We became a public limited

company on April 28 2000 and the name of the Company was changed to Probity Research

and Services Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a

mass retail segment and transformed our business model from providing information services

to institutional customers to retail customers Hence we launched our Internet portal

wwwindiainfolinecom in May 1999 and started providing news and market information

independent research interviews with business leaders and other specialized features

In May 2000 the name of our Company was changed to India Infolinecom Limited

to reflect the transformation of our business Over a period of time we have emerged as one

of the leading business and financial information services provider in India

In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of

financial information and analysis by diversifying into transactional services primarily for

online trading in shares and securities and online as well as offline distribution of personal

financial products like mutual funds and RBI Bonds These activities were carried on by our

wholly owned subsidiaries

The India Infoline Grouprsquos broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July 2000 It

combined competitive brokerage rates and research supported by Internet technology

Besides investment advice from an experienced team of research analysts we also offer real

time stock quotes market news and price charts with multiple tools for technical analysis

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21

Acquisition of Agri Marketing Services Limited (Agri)

In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri

Marketing Services Limited from their owners in exchange for the issuance of 508482 of

our equity shares Agri was a direct selling agent of personal financial products including

mutual funds fixed deposits corporate bonds and post-office instruments At the time of our

acquisition Agri operated 32 branches in South and West India serving more than 30000

customers with a staff of approximately 180 employees After the acquisition we changed

the company name to India Infolinecom Distribution Company Limited

The India Infoline group comprising the holding company India Infoline Ltd (NSE

INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian

financial services space India Infoline offers the entire gamut of financial services covering

investment products ranging from Equities and derivatives Commodities Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment

Banking GoI bonds and other small savings instruments It owns and manages the website

wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal

finance stock markets economy and business

A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none

other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo

IndiaInfolinersquos research is available not just over the internet but also on international wire

services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is

amongst the most read Indian brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22

A network of 753 business locations spread over 346 cities across India facilitates the

smooth acquisition and servicing of a large customer base All these offices are connected

with the corporate office in Mumbai with cutting edge networking technology

The group caters to a customer base of over 500000 over a variety of mediums viz online

over the phone and at our branches The Group is strengthening its institutional broking and

investment banking services and has built a team of experienced research analysts sales and

trading professionals

IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will

give a more meaningful picture of the Company to the investors Reference to the company

or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise

specified

VISION

Our vision is to be the most respected company in the financial services space

MISSION

ldquoTo become a full-fledged financial services company known for its quality of advice

personalized services and cutting edge technologyrdquo

COMPANY PHILISOPHY

The IndiaInfoline Group is committed to placing the Investor First by continuously striving

to increase the efficiency of the operations as well as the systems and processes for use of

corporate resources in such a way so as to maximize the value to the stakeholders The Group

aims at achieving not only the highest possible standards of legal and regulatory compliances

but also of effective management

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23

COMMITTEE

Audit Committee

Terms of reference amp Composition Name of members and Chairman The Audit committee

comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv

Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and

Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as

under - To investigate into any matter that may be prescribed under the provisions of Section

292A of The Companies Act 1956 - Recommendation and removal of External Auditor and

fixation of the Audit Fees - Reviewing with the management the financial statements before

submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and

disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function

Compensation Remuneration Committee

Terms of reference amp Composition Name of members and Chairman The Compensation

Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr

Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of

reference of this committee are as under - To fix suitable remuneration package of all the

Executive Directors and Non Executive Directors Senior Employees and officers ie Salary

perquisites bonuses stock options pensions etc - Determination of the fixed component and

performance linked incentives alongwith the performance criteria to all employees of the

company - Service Contracts Notice Period Severance Fees of Directors and employees -

Stock Option details whether to be issued at discount as well as the period over which to be

accrued and over which exercisable - To conduct discussions with the HR department and

form suitable remuneration policies

Share Transfer and Investor Grievance Committee

Details of the Members Compliance Officer No of Complaints received and pending and

pending transfers as on close of the financial year The committee functions under the

Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24

Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R

Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance

Officer of the Company

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock

Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of

both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory

Services and Portfolio Management Services It offers broking services in the Cash and

Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with

NSDL as well as CDSL as a depository participant providing a one-stop solution for clients

trading in the equities market It has recently launched its Investment banking and

Institutional Broking business

A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients

These services are offered to clients as different schemes which are based on differing

investment strategies made to reflect the varied risk-return preferences of clients

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 9: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 9

A BRIEF HISTORY

India Infoline was originally incorporated on October 18 1995 as

Probity Research and Services Private Limited at Mumbai under the Companies

Act 1956 with Registration No 11 93797 India Infoline commenced

operations as an independent provider of information analysis and research

covering Indian businesses financial markets and economy to institutional

customers India Infoline became a public limited company on April 28 2000

and the name of the Company was changed to Probity Research and Services

Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 India Infolinecom identified the potential of the Internet to

cater to a mass retail segment and transformed our business model from

providing information services to institutional customers to retail customers

Hence India Infoline launched Internet portal wwwindiainfolinecom in May

1999 and started providing news and market information independent

research interviews with business leaders and other specialized features

In May 2000 the name of India Infoline was changed to India

Infolinecom Limited to reflect the transformation of our business Over a

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 10

period of time India Infolinecom has emerged as one of the leading business

and financial information services provider in India

In the year 2000 India Infoline leveraged its position as a provider of

financial information and analysis by diversifying into transactional services

primarily for online trading in shares and securities and online as well as offline

distribution of personal financial products like mutual funds and RBI Bonds

These activities were carried on by our wholly owned subsidiaries

India Infoline broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July

2000 It combined competitive brokerage rates and research supported by

Internet technology besides investment advice from an experienced team of

research analysts India Infoline also offer real time stock quotes market news

and price charts with multiple tools for technical analysis

Facilities

India Infolinersquos main offices are located in approximately 4000 square

feet of office space located in Mumbai India India Infoline Branches

collectively occupy an additional 10000 square feet of office space located

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 11

throughout India As on March 31 2005 India Infoline has 73 branches across

36 locations in India

Terminals

Almost 52 of the terminals in the sample are based in the Western

region of India followed by 25 in the North 13 in the South and 10 in the

East Mumbai has got the maximum representation from the West Chennai

from the South New Delhi from the North and Kolkata from the East

Branches amp Sub-Brokers

The maximum concentration of branches is in the North with as many

as 40 of all branches located there followed by the Western region with

31 branches Around 24 branches are located in the South and East

constitutes for 5 of the total branches of the total sample

In case of sub-brokers almost 55 of them are based in the South West

and North follow with 30 and 11 sub-brokers respectively whereas East

has around 4 of total sub-brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 12

Financial Markets

The financial markets have been classified as cash market derivatives

market debt market and commodities market Cash market also known as

spot market is the most sought after amongst investors Majority of the

sample broking firms are dealing in the cash market followed by derivative

and commodities 27 firms are dealing only in the cash market whereas 35

are into cash and derivatives Almost 20 firms trade in cash derivatives and

commodities market Firms that are into cash derivatives and debt are 7 On

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13

the other hand firms into cash and commodities are 3 cash amp debt market

and commodities alone are 2 4 firms trade in all the markets

In the cash market around 34 firms trade at NSE 14 at BSE and 52

trade at both exchanges In the equity derivative market 48 of the sampled

broking houses are members of NSE and 7 trade at BSE while 45 of the

sample operate in both stock exchanges Around 43 of the broking houses

operating in the debt market trade at both exchanges with 31 and 26

firms uniquely at NSE and BSE respectively

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14

Products

The survey also revealed that in the past couple of years apart from

trading the firms have started offering various investment related value

added services The sustained growth of the economy in the past couple of

years has resulted in broking firms offering many diversified services related

to IPOs mutual funds company research etc However the core trading

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15

activity is still the predominant form of business forming 90 of the firms in

the sample 67 firms are engaged in offering IPO related services The

broking industry seems to have capitalized on the growth of the mutual fund

industry which was pegged at 40 in 2006 More than 50 of the sample

broking houses deal in mutual fund investment services The average growth

in assets under management in the last two years is almost 48 Company

research is another lucrative area where the broking firms offer their services

more than 33 of the firms are engaged in providing company research

services Additionally a host of other value added services such as

fundamental and technical analysis investment banking arbitrage etc are

offered by the firms at different levels

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16

Of the total sample of broking houses providing trading services 52 are

based in the West followed by 25 from North 13 from South and 10

from the East Around 50 of the firms offering IPO related services are based

in the West as compared to 27 in North 13 in South and 10 in East In

providing mutual funds services the Western region was dominant amounting

to 49 followed by 27 from North The South and the East are almost at par

with 13 and 11 respectively

Future Plans

68 of the firms from the sample have envisaged strategies for future

growth With the middle class Indian investor as well as foreign investor

willing to invest in the stock market majority of the firms preferred expansion

of institutional and the Foreign Institutional Investor clients in their areas of

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17

growth Around 84 have shown interest in expanding their institutional

client base Nearly 51 of such firms are located in the West 25 in North

15 are from South and 9 from East Since the past couple of years India

along with Korea and Taiwan has been one of the preferred destinations for

the FIIs With corporate restructuring rising market capitalization and sectoral

friendly policies helping the FIIs more than two thirds of the firms are

interested in increasing their FII client base Amongst these firms west again

has maximum representation of 53 followed by North with 22 South has

15 firms and East makes up for 9

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19

INTRODUCTION TO INDIAINFOLINE

IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an

independent business research and information provider We gradually evolved into a one-

stop financial services solutions provider Our strong management team comprises competent

and dedicated professionals

We are a pan-India financial services organization across 1361 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)

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 and

DGCX 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 ndash India Infoline Investment Services and Moneyline Credit

Limited ndash 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

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20

HISTROY OF INDIAINFOLINE

The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity

Research and Services Private Limited at Mumbai under the Companies Act 1956 with

Registration No 11 93797 The IndiaInfoline Group commenced its operations as an

independent provider of information analysis and research covering Indian businesses

financial markets and economy to institutional customers We became a public limited

company on April 28 2000 and the name of the Company was changed to Probity Research

and Services Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a

mass retail segment and transformed our business model from providing information services

to institutional customers to retail customers Hence we launched our Internet portal

wwwindiainfolinecom in May 1999 and started providing news and market information

independent research interviews with business leaders and other specialized features

In May 2000 the name of our Company was changed to India Infolinecom Limited

to reflect the transformation of our business Over a period of time we have emerged as one

of the leading business and financial information services provider in India

In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of

financial information and analysis by diversifying into transactional services primarily for

online trading in shares and securities and online as well as offline distribution of personal

financial products like mutual funds and RBI Bonds These activities were carried on by our

wholly owned subsidiaries

The India Infoline Grouprsquos broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July 2000 It

combined competitive brokerage rates and research supported by Internet technology

Besides investment advice from an experienced team of research analysts we also offer real

time stock quotes market news and price charts with multiple tools for technical analysis

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21

Acquisition of Agri Marketing Services Limited (Agri)

In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri

Marketing Services Limited from their owners in exchange for the issuance of 508482 of

our equity shares Agri was a direct selling agent of personal financial products including

mutual funds fixed deposits corporate bonds and post-office instruments At the time of our

acquisition Agri operated 32 branches in South and West India serving more than 30000

customers with a staff of approximately 180 employees After the acquisition we changed

the company name to India Infolinecom Distribution Company Limited

The India Infoline group comprising the holding company India Infoline Ltd (NSE

INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian

financial services space India Infoline offers the entire gamut of financial services covering

investment products ranging from Equities and derivatives Commodities Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment

Banking GoI bonds and other small savings instruments It owns and manages the website

wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal

finance stock markets economy and business

A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none

other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo

IndiaInfolinersquos research is available not just over the internet but also on international wire

services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is

amongst the most read Indian brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22

A network of 753 business locations spread over 346 cities across India facilitates the

smooth acquisition and servicing of a large customer base All these offices are connected

with the corporate office in Mumbai with cutting edge networking technology

The group caters to a customer base of over 500000 over a variety of mediums viz online

over the phone and at our branches The Group is strengthening its institutional broking and

investment banking services and has built a team of experienced research analysts sales and

trading professionals

IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will

give a more meaningful picture of the Company to the investors Reference to the company

or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise

specified

VISION

Our vision is to be the most respected company in the financial services space

MISSION

ldquoTo become a full-fledged financial services company known for its quality of advice

personalized services and cutting edge technologyrdquo

COMPANY PHILISOPHY

The IndiaInfoline Group is committed to placing the Investor First by continuously striving

to increase the efficiency of the operations as well as the systems and processes for use of

corporate resources in such a way so as to maximize the value to the stakeholders The Group

aims at achieving not only the highest possible standards of legal and regulatory compliances

but also of effective management

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23

COMMITTEE

Audit Committee

Terms of reference amp Composition Name of members and Chairman The Audit committee

comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv

Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and

Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as

under - To investigate into any matter that may be prescribed under the provisions of Section

292A of The Companies Act 1956 - Recommendation and removal of External Auditor and

fixation of the Audit Fees - Reviewing with the management the financial statements before

submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and

disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function

Compensation Remuneration Committee

Terms of reference amp Composition Name of members and Chairman The Compensation

Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr

Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of

reference of this committee are as under - To fix suitable remuneration package of all the

Executive Directors and Non Executive Directors Senior Employees and officers ie Salary

perquisites bonuses stock options pensions etc - Determination of the fixed component and

performance linked incentives alongwith the performance criteria to all employees of the

company - Service Contracts Notice Period Severance Fees of Directors and employees -

Stock Option details whether to be issued at discount as well as the period over which to be

accrued and over which exercisable - To conduct discussions with the HR department and

form suitable remuneration policies

Share Transfer and Investor Grievance Committee

Details of the Members Compliance Officer No of Complaints received and pending and

pending transfers as on close of the financial year The committee functions under the

Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24

Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R

Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance

Officer of the Company

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock

Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of

both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory

Services and Portfolio Management Services It offers broking services in the Cash and

Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with

NSDL as well as CDSL as a depository participant providing a one-stop solution for clients

trading in the equities market It has recently launched its Investment banking and

Institutional Broking business

A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients

These services are offered to clients as different schemes which are based on differing

investment strategies made to reflect the varied risk-return preferences of clients

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 10: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 10

period of time India Infolinecom has emerged as one of the leading business

and financial information services provider in India

In the year 2000 India Infoline leveraged its position as a provider of

financial information and analysis by diversifying into transactional services

primarily for online trading in shares and securities and online as well as offline

distribution of personal financial products like mutual funds and RBI Bonds

These activities were carried on by our wholly owned subsidiaries

India Infoline broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July

2000 It combined competitive brokerage rates and research supported by

Internet technology besides investment advice from an experienced team of

research analysts India Infoline also offer real time stock quotes market news

and price charts with multiple tools for technical analysis

Facilities

India Infolinersquos main offices are located in approximately 4000 square

feet of office space located in Mumbai India India Infoline Branches

collectively occupy an additional 10000 square feet of office space located

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 11

throughout India As on March 31 2005 India Infoline has 73 branches across

36 locations in India

Terminals

Almost 52 of the terminals in the sample are based in the Western

region of India followed by 25 in the North 13 in the South and 10 in the

East Mumbai has got the maximum representation from the West Chennai

from the South New Delhi from the North and Kolkata from the East

Branches amp Sub-Brokers

The maximum concentration of branches is in the North with as many

as 40 of all branches located there followed by the Western region with

31 branches Around 24 branches are located in the South and East

constitutes for 5 of the total branches of the total sample

In case of sub-brokers almost 55 of them are based in the South West

and North follow with 30 and 11 sub-brokers respectively whereas East

has around 4 of total sub-brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 12

Financial Markets

The financial markets have been classified as cash market derivatives

market debt market and commodities market Cash market also known as

spot market is the most sought after amongst investors Majority of the

sample broking firms are dealing in the cash market followed by derivative

and commodities 27 firms are dealing only in the cash market whereas 35

are into cash and derivatives Almost 20 firms trade in cash derivatives and

commodities market Firms that are into cash derivatives and debt are 7 On

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13

the other hand firms into cash and commodities are 3 cash amp debt market

and commodities alone are 2 4 firms trade in all the markets

In the cash market around 34 firms trade at NSE 14 at BSE and 52

trade at both exchanges In the equity derivative market 48 of the sampled

broking houses are members of NSE and 7 trade at BSE while 45 of the

sample operate in both stock exchanges Around 43 of the broking houses

operating in the debt market trade at both exchanges with 31 and 26

firms uniquely at NSE and BSE respectively

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14

Products

The survey also revealed that in the past couple of years apart from

trading the firms have started offering various investment related value

added services The sustained growth of the economy in the past couple of

years has resulted in broking firms offering many diversified services related

to IPOs mutual funds company research etc However the core trading

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15

activity is still the predominant form of business forming 90 of the firms in

the sample 67 firms are engaged in offering IPO related services The

broking industry seems to have capitalized on the growth of the mutual fund

industry which was pegged at 40 in 2006 More than 50 of the sample

broking houses deal in mutual fund investment services The average growth

in assets under management in the last two years is almost 48 Company

research is another lucrative area where the broking firms offer their services

more than 33 of the firms are engaged in providing company research

services Additionally a host of other value added services such as

fundamental and technical analysis investment banking arbitrage etc are

offered by the firms at different levels

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16

Of the total sample of broking houses providing trading services 52 are

based in the West followed by 25 from North 13 from South and 10

from the East Around 50 of the firms offering IPO related services are based

in the West as compared to 27 in North 13 in South and 10 in East In

providing mutual funds services the Western region was dominant amounting

to 49 followed by 27 from North The South and the East are almost at par

with 13 and 11 respectively

Future Plans

68 of the firms from the sample have envisaged strategies for future

growth With the middle class Indian investor as well as foreign investor

willing to invest in the stock market majority of the firms preferred expansion

of institutional and the Foreign Institutional Investor clients in their areas of

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17

growth Around 84 have shown interest in expanding their institutional

client base Nearly 51 of such firms are located in the West 25 in North

15 are from South and 9 from East Since the past couple of years India

along with Korea and Taiwan has been one of the preferred destinations for

the FIIs With corporate restructuring rising market capitalization and sectoral

friendly policies helping the FIIs more than two thirds of the firms are

interested in increasing their FII client base Amongst these firms west again

has maximum representation of 53 followed by North with 22 South has

15 firms and East makes up for 9

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19

INTRODUCTION TO INDIAINFOLINE

IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an

independent business research and information provider We gradually evolved into a one-

stop financial services solutions provider Our strong management team comprises competent

and dedicated professionals

We are a pan-India financial services organization across 1361 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)

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 and

DGCX 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 ndash India Infoline Investment Services and Moneyline Credit

Limited ndash 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

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20

HISTROY OF INDIAINFOLINE

The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity

Research and Services Private Limited at Mumbai under the Companies Act 1956 with

Registration No 11 93797 The IndiaInfoline Group commenced its operations as an

independent provider of information analysis and research covering Indian businesses

financial markets and economy to institutional customers We became a public limited

company on April 28 2000 and the name of the Company was changed to Probity Research

and Services Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a

mass retail segment and transformed our business model from providing information services

to institutional customers to retail customers Hence we launched our Internet portal

wwwindiainfolinecom in May 1999 and started providing news and market information

independent research interviews with business leaders and other specialized features

In May 2000 the name of our Company was changed to India Infolinecom Limited

to reflect the transformation of our business Over a period of time we have emerged as one

of the leading business and financial information services provider in India

In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of

financial information and analysis by diversifying into transactional services primarily for

online trading in shares and securities and online as well as offline distribution of personal

financial products like mutual funds and RBI Bonds These activities were carried on by our

wholly owned subsidiaries

The India Infoline Grouprsquos broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July 2000 It

combined competitive brokerage rates and research supported by Internet technology

Besides investment advice from an experienced team of research analysts we also offer real

time stock quotes market news and price charts with multiple tools for technical analysis

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21

Acquisition of Agri Marketing Services Limited (Agri)

In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri

Marketing Services Limited from their owners in exchange for the issuance of 508482 of

our equity shares Agri was a direct selling agent of personal financial products including

mutual funds fixed deposits corporate bonds and post-office instruments At the time of our

acquisition Agri operated 32 branches in South and West India serving more than 30000

customers with a staff of approximately 180 employees After the acquisition we changed

the company name to India Infolinecom Distribution Company Limited

The India Infoline group comprising the holding company India Infoline Ltd (NSE

INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian

financial services space India Infoline offers the entire gamut of financial services covering

investment products ranging from Equities and derivatives Commodities Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment

Banking GoI bonds and other small savings instruments It owns and manages the website

wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal

finance stock markets economy and business

A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none

other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo

IndiaInfolinersquos research is available not just over the internet but also on international wire

services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is

amongst the most read Indian brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22

A network of 753 business locations spread over 346 cities across India facilitates the

smooth acquisition and servicing of a large customer base All these offices are connected

with the corporate office in Mumbai with cutting edge networking technology

The group caters to a customer base of over 500000 over a variety of mediums viz online

over the phone and at our branches The Group is strengthening its institutional broking and

investment banking services and has built a team of experienced research analysts sales and

trading professionals

IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will

give a more meaningful picture of the Company to the investors Reference to the company

or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise

specified

VISION

Our vision is to be the most respected company in the financial services space

MISSION

ldquoTo become a full-fledged financial services company known for its quality of advice

personalized services and cutting edge technologyrdquo

COMPANY PHILISOPHY

The IndiaInfoline Group is committed to placing the Investor First by continuously striving

to increase the efficiency of the operations as well as the systems and processes for use of

corporate resources in such a way so as to maximize the value to the stakeholders The Group

aims at achieving not only the highest possible standards of legal and regulatory compliances

but also of effective management

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23

COMMITTEE

Audit Committee

Terms of reference amp Composition Name of members and Chairman The Audit committee

comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv

Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and

Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as

under - To investigate into any matter that may be prescribed under the provisions of Section

292A of The Companies Act 1956 - Recommendation and removal of External Auditor and

fixation of the Audit Fees - Reviewing with the management the financial statements before

submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and

disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function

Compensation Remuneration Committee

Terms of reference amp Composition Name of members and Chairman The Compensation

Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr

Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of

reference of this committee are as under - To fix suitable remuneration package of all the

Executive Directors and Non Executive Directors Senior Employees and officers ie Salary

perquisites bonuses stock options pensions etc - Determination of the fixed component and

performance linked incentives alongwith the performance criteria to all employees of the

company - Service Contracts Notice Period Severance Fees of Directors and employees -

Stock Option details whether to be issued at discount as well as the period over which to be

accrued and over which exercisable - To conduct discussions with the HR department and

form suitable remuneration policies

Share Transfer and Investor Grievance Committee

Details of the Members Compliance Officer No of Complaints received and pending and

pending transfers as on close of the financial year The committee functions under the

Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24

Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R

Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance

Officer of the Company

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock

Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of

both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory

Services and Portfolio Management Services It offers broking services in the Cash and

Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with

NSDL as well as CDSL as a depository participant providing a one-stop solution for clients

trading in the equities market It has recently launched its Investment banking and

Institutional Broking business

A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients

These services are offered to clients as different schemes which are based on differing

investment strategies made to reflect the varied risk-return preferences of clients

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 11: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 11

throughout India As on March 31 2005 India Infoline has 73 branches across

36 locations in India

Terminals

Almost 52 of the terminals in the sample are based in the Western

region of India followed by 25 in the North 13 in the South and 10 in the

East Mumbai has got the maximum representation from the West Chennai

from the South New Delhi from the North and Kolkata from the East

Branches amp Sub-Brokers

The maximum concentration of branches is in the North with as many

as 40 of all branches located there followed by the Western region with

31 branches Around 24 branches are located in the South and East

constitutes for 5 of the total branches of the total sample

In case of sub-brokers almost 55 of them are based in the South West

and North follow with 30 and 11 sub-brokers respectively whereas East

has around 4 of total sub-brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 12

Financial Markets

The financial markets have been classified as cash market derivatives

market debt market and commodities market Cash market also known as

spot market is the most sought after amongst investors Majority of the

sample broking firms are dealing in the cash market followed by derivative

and commodities 27 firms are dealing only in the cash market whereas 35

are into cash and derivatives Almost 20 firms trade in cash derivatives and

commodities market Firms that are into cash derivatives and debt are 7 On

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13

the other hand firms into cash and commodities are 3 cash amp debt market

and commodities alone are 2 4 firms trade in all the markets

In the cash market around 34 firms trade at NSE 14 at BSE and 52

trade at both exchanges In the equity derivative market 48 of the sampled

broking houses are members of NSE and 7 trade at BSE while 45 of the

sample operate in both stock exchanges Around 43 of the broking houses

operating in the debt market trade at both exchanges with 31 and 26

firms uniquely at NSE and BSE respectively

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14

Products

The survey also revealed that in the past couple of years apart from

trading the firms have started offering various investment related value

added services The sustained growth of the economy in the past couple of

years has resulted in broking firms offering many diversified services related

to IPOs mutual funds company research etc However the core trading

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15

activity is still the predominant form of business forming 90 of the firms in

the sample 67 firms are engaged in offering IPO related services The

broking industry seems to have capitalized on the growth of the mutual fund

industry which was pegged at 40 in 2006 More than 50 of the sample

broking houses deal in mutual fund investment services The average growth

in assets under management in the last two years is almost 48 Company

research is another lucrative area where the broking firms offer their services

more than 33 of the firms are engaged in providing company research

services Additionally a host of other value added services such as

fundamental and technical analysis investment banking arbitrage etc are

offered by the firms at different levels

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16

Of the total sample of broking houses providing trading services 52 are

based in the West followed by 25 from North 13 from South and 10

from the East Around 50 of the firms offering IPO related services are based

in the West as compared to 27 in North 13 in South and 10 in East In

providing mutual funds services the Western region was dominant amounting

to 49 followed by 27 from North The South and the East are almost at par

with 13 and 11 respectively

Future Plans

68 of the firms from the sample have envisaged strategies for future

growth With the middle class Indian investor as well as foreign investor

willing to invest in the stock market majority of the firms preferred expansion

of institutional and the Foreign Institutional Investor clients in their areas of

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17

growth Around 84 have shown interest in expanding their institutional

client base Nearly 51 of such firms are located in the West 25 in North

15 are from South and 9 from East Since the past couple of years India

along with Korea and Taiwan has been one of the preferred destinations for

the FIIs With corporate restructuring rising market capitalization and sectoral

friendly policies helping the FIIs more than two thirds of the firms are

interested in increasing their FII client base Amongst these firms west again

has maximum representation of 53 followed by North with 22 South has

15 firms and East makes up for 9

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19

INTRODUCTION TO INDIAINFOLINE

IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an

independent business research and information provider We gradually evolved into a one-

stop financial services solutions provider Our strong management team comprises competent

and dedicated professionals

We are a pan-India financial services organization across 1361 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)

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 and

DGCX 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 ndash India Infoline Investment Services and Moneyline Credit

Limited ndash 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

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20

HISTROY OF INDIAINFOLINE

The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity

Research and Services Private Limited at Mumbai under the Companies Act 1956 with

Registration No 11 93797 The IndiaInfoline Group commenced its operations as an

independent provider of information analysis and research covering Indian businesses

financial markets and economy to institutional customers We became a public limited

company on April 28 2000 and the name of the Company was changed to Probity Research

and Services Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a

mass retail segment and transformed our business model from providing information services

to institutional customers to retail customers Hence we launched our Internet portal

wwwindiainfolinecom in May 1999 and started providing news and market information

independent research interviews with business leaders and other specialized features

In May 2000 the name of our Company was changed to India Infolinecom Limited

to reflect the transformation of our business Over a period of time we have emerged as one

of the leading business and financial information services provider in India

In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of

financial information and analysis by diversifying into transactional services primarily for

online trading in shares and securities and online as well as offline distribution of personal

financial products like mutual funds and RBI Bonds These activities were carried on by our

wholly owned subsidiaries

The India Infoline Grouprsquos broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July 2000 It

combined competitive brokerage rates and research supported by Internet technology

Besides investment advice from an experienced team of research analysts we also offer real

time stock quotes market news and price charts with multiple tools for technical analysis

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21

Acquisition of Agri Marketing Services Limited (Agri)

In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri

Marketing Services Limited from their owners in exchange for the issuance of 508482 of

our equity shares Agri was a direct selling agent of personal financial products including

mutual funds fixed deposits corporate bonds and post-office instruments At the time of our

acquisition Agri operated 32 branches in South and West India serving more than 30000

customers with a staff of approximately 180 employees After the acquisition we changed

the company name to India Infolinecom Distribution Company Limited

The India Infoline group comprising the holding company India Infoline Ltd (NSE

INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian

financial services space India Infoline offers the entire gamut of financial services covering

investment products ranging from Equities and derivatives Commodities Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment

Banking GoI bonds and other small savings instruments It owns and manages the website

wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal

finance stock markets economy and business

A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none

other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo

IndiaInfolinersquos research is available not just over the internet but also on international wire

services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is

amongst the most read Indian brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22

A network of 753 business locations spread over 346 cities across India facilitates the

smooth acquisition and servicing of a large customer base All these offices are connected

with the corporate office in Mumbai with cutting edge networking technology

The group caters to a customer base of over 500000 over a variety of mediums viz online

over the phone and at our branches The Group is strengthening its institutional broking and

investment banking services and has built a team of experienced research analysts sales and

trading professionals

IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will

give a more meaningful picture of the Company to the investors Reference to the company

or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise

specified

VISION

Our vision is to be the most respected company in the financial services space

MISSION

ldquoTo become a full-fledged financial services company known for its quality of advice

personalized services and cutting edge technologyrdquo

COMPANY PHILISOPHY

The IndiaInfoline Group is committed to placing the Investor First by continuously striving

to increase the efficiency of the operations as well as the systems and processes for use of

corporate resources in such a way so as to maximize the value to the stakeholders The Group

aims at achieving not only the highest possible standards of legal and regulatory compliances

but also of effective management

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23

COMMITTEE

Audit Committee

Terms of reference amp Composition Name of members and Chairman The Audit committee

comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv

Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and

Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as

under - To investigate into any matter that may be prescribed under the provisions of Section

292A of The Companies Act 1956 - Recommendation and removal of External Auditor and

fixation of the Audit Fees - Reviewing with the management the financial statements before

submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and

disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function

Compensation Remuneration Committee

Terms of reference amp Composition Name of members and Chairman The Compensation

Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr

Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of

reference of this committee are as under - To fix suitable remuneration package of all the

Executive Directors and Non Executive Directors Senior Employees and officers ie Salary

perquisites bonuses stock options pensions etc - Determination of the fixed component and

performance linked incentives alongwith the performance criteria to all employees of the

company - Service Contracts Notice Period Severance Fees of Directors and employees -

Stock Option details whether to be issued at discount as well as the period over which to be

accrued and over which exercisable - To conduct discussions with the HR department and

form suitable remuneration policies

Share Transfer and Investor Grievance Committee

Details of the Members Compliance Officer No of Complaints received and pending and

pending transfers as on close of the financial year The committee functions under the

Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24

Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R

Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance

Officer of the Company

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock

Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of

both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory

Services and Portfolio Management Services It offers broking services in the Cash and

Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with

NSDL as well as CDSL as a depository participant providing a one-stop solution for clients

trading in the equities market It has recently launched its Investment banking and

Institutional Broking business

A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients

These services are offered to clients as different schemes which are based on differing

investment strategies made to reflect the varied risk-return preferences of clients

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 12: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 12

Financial Markets

The financial markets have been classified as cash market derivatives

market debt market and commodities market Cash market also known as

spot market is the most sought after amongst investors Majority of the

sample broking firms are dealing in the cash market followed by derivative

and commodities 27 firms are dealing only in the cash market whereas 35

are into cash and derivatives Almost 20 firms trade in cash derivatives and

commodities market Firms that are into cash derivatives and debt are 7 On

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13

the other hand firms into cash and commodities are 3 cash amp debt market

and commodities alone are 2 4 firms trade in all the markets

In the cash market around 34 firms trade at NSE 14 at BSE and 52

trade at both exchanges In the equity derivative market 48 of the sampled

broking houses are members of NSE and 7 trade at BSE while 45 of the

sample operate in both stock exchanges Around 43 of the broking houses

operating in the debt market trade at both exchanges with 31 and 26

firms uniquely at NSE and BSE respectively

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14

Products

The survey also revealed that in the past couple of years apart from

trading the firms have started offering various investment related value

added services The sustained growth of the economy in the past couple of

years has resulted in broking firms offering many diversified services related

to IPOs mutual funds company research etc However the core trading

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15

activity is still the predominant form of business forming 90 of the firms in

the sample 67 firms are engaged in offering IPO related services The

broking industry seems to have capitalized on the growth of the mutual fund

industry which was pegged at 40 in 2006 More than 50 of the sample

broking houses deal in mutual fund investment services The average growth

in assets under management in the last two years is almost 48 Company

research is another lucrative area where the broking firms offer their services

more than 33 of the firms are engaged in providing company research

services Additionally a host of other value added services such as

fundamental and technical analysis investment banking arbitrage etc are

offered by the firms at different levels

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16

Of the total sample of broking houses providing trading services 52 are

based in the West followed by 25 from North 13 from South and 10

from the East Around 50 of the firms offering IPO related services are based

in the West as compared to 27 in North 13 in South and 10 in East In

providing mutual funds services the Western region was dominant amounting

to 49 followed by 27 from North The South and the East are almost at par

with 13 and 11 respectively

Future Plans

68 of the firms from the sample have envisaged strategies for future

growth With the middle class Indian investor as well as foreign investor

willing to invest in the stock market majority of the firms preferred expansion

of institutional and the Foreign Institutional Investor clients in their areas of

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17

growth Around 84 have shown interest in expanding their institutional

client base Nearly 51 of such firms are located in the West 25 in North

15 are from South and 9 from East Since the past couple of years India

along with Korea and Taiwan has been one of the preferred destinations for

the FIIs With corporate restructuring rising market capitalization and sectoral

friendly policies helping the FIIs more than two thirds of the firms are

interested in increasing their FII client base Amongst these firms west again

has maximum representation of 53 followed by North with 22 South has

15 firms and East makes up for 9

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19

INTRODUCTION TO INDIAINFOLINE

IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an

independent business research and information provider We gradually evolved into a one-

stop financial services solutions provider Our strong management team comprises competent

and dedicated professionals

We are a pan-India financial services organization across 1361 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)

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 and

DGCX 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 ndash India Infoline Investment Services and Moneyline Credit

Limited ndash 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

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20

HISTROY OF INDIAINFOLINE

The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity

Research and Services Private Limited at Mumbai under the Companies Act 1956 with

Registration No 11 93797 The IndiaInfoline Group commenced its operations as an

independent provider of information analysis and research covering Indian businesses

financial markets and economy to institutional customers We became a public limited

company on April 28 2000 and the name of the Company was changed to Probity Research

and Services Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a

mass retail segment and transformed our business model from providing information services

to institutional customers to retail customers Hence we launched our Internet portal

wwwindiainfolinecom in May 1999 and started providing news and market information

independent research interviews with business leaders and other specialized features

In May 2000 the name of our Company was changed to India Infolinecom Limited

to reflect the transformation of our business Over a period of time we have emerged as one

of the leading business and financial information services provider in India

In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of

financial information and analysis by diversifying into transactional services primarily for

online trading in shares and securities and online as well as offline distribution of personal

financial products like mutual funds and RBI Bonds These activities were carried on by our

wholly owned subsidiaries

The India Infoline Grouprsquos broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July 2000 It

combined competitive brokerage rates and research supported by Internet technology

Besides investment advice from an experienced team of research analysts we also offer real

time stock quotes market news and price charts with multiple tools for technical analysis

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21

Acquisition of Agri Marketing Services Limited (Agri)

In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri

Marketing Services Limited from their owners in exchange for the issuance of 508482 of

our equity shares Agri was a direct selling agent of personal financial products including

mutual funds fixed deposits corporate bonds and post-office instruments At the time of our

acquisition Agri operated 32 branches in South and West India serving more than 30000

customers with a staff of approximately 180 employees After the acquisition we changed

the company name to India Infolinecom Distribution Company Limited

The India Infoline group comprising the holding company India Infoline Ltd (NSE

INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian

financial services space India Infoline offers the entire gamut of financial services covering

investment products ranging from Equities and derivatives Commodities Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment

Banking GoI bonds and other small savings instruments It owns and manages the website

wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal

finance stock markets economy and business

A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none

other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo

IndiaInfolinersquos research is available not just over the internet but also on international wire

services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is

amongst the most read Indian brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22

A network of 753 business locations spread over 346 cities across India facilitates the

smooth acquisition and servicing of a large customer base All these offices are connected

with the corporate office in Mumbai with cutting edge networking technology

The group caters to a customer base of over 500000 over a variety of mediums viz online

over the phone and at our branches The Group is strengthening its institutional broking and

investment banking services and has built a team of experienced research analysts sales and

trading professionals

IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will

give a more meaningful picture of the Company to the investors Reference to the company

or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise

specified

VISION

Our vision is to be the most respected company in the financial services space

MISSION

ldquoTo become a full-fledged financial services company known for its quality of advice

personalized services and cutting edge technologyrdquo

COMPANY PHILISOPHY

The IndiaInfoline Group is committed to placing the Investor First by continuously striving

to increase the efficiency of the operations as well as the systems and processes for use of

corporate resources in such a way so as to maximize the value to the stakeholders The Group

aims at achieving not only the highest possible standards of legal and regulatory compliances

but also of effective management

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23

COMMITTEE

Audit Committee

Terms of reference amp Composition Name of members and Chairman The Audit committee

comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv

Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and

Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as

under - To investigate into any matter that may be prescribed under the provisions of Section

292A of The Companies Act 1956 - Recommendation and removal of External Auditor and

fixation of the Audit Fees - Reviewing with the management the financial statements before

submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and

disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function

Compensation Remuneration Committee

Terms of reference amp Composition Name of members and Chairman The Compensation

Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr

Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of

reference of this committee are as under - To fix suitable remuneration package of all the

Executive Directors and Non Executive Directors Senior Employees and officers ie Salary

perquisites bonuses stock options pensions etc - Determination of the fixed component and

performance linked incentives alongwith the performance criteria to all employees of the

company - Service Contracts Notice Period Severance Fees of Directors and employees -

Stock Option details whether to be issued at discount as well as the period over which to be

accrued and over which exercisable - To conduct discussions with the HR department and

form suitable remuneration policies

Share Transfer and Investor Grievance Committee

Details of the Members Compliance Officer No of Complaints received and pending and

pending transfers as on close of the financial year The committee functions under the

Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24

Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R

Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance

Officer of the Company

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock

Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of

both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory

Services and Portfolio Management Services It offers broking services in the Cash and

Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with

NSDL as well as CDSL as a depository participant providing a one-stop solution for clients

trading in the equities market It has recently launched its Investment banking and

Institutional Broking business

A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients

These services are offered to clients as different schemes which are based on differing

investment strategies made to reflect the varied risk-return preferences of clients

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 13: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13

the other hand firms into cash and commodities are 3 cash amp debt market

and commodities alone are 2 4 firms trade in all the markets

In the cash market around 34 firms trade at NSE 14 at BSE and 52

trade at both exchanges In the equity derivative market 48 of the sampled

broking houses are members of NSE and 7 trade at BSE while 45 of the

sample operate in both stock exchanges Around 43 of the broking houses

operating in the debt market trade at both exchanges with 31 and 26

firms uniquely at NSE and BSE respectively

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14

Products

The survey also revealed that in the past couple of years apart from

trading the firms have started offering various investment related value

added services The sustained growth of the economy in the past couple of

years has resulted in broking firms offering many diversified services related

to IPOs mutual funds company research etc However the core trading

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15

activity is still the predominant form of business forming 90 of the firms in

the sample 67 firms are engaged in offering IPO related services The

broking industry seems to have capitalized on the growth of the mutual fund

industry which was pegged at 40 in 2006 More than 50 of the sample

broking houses deal in mutual fund investment services The average growth

in assets under management in the last two years is almost 48 Company

research is another lucrative area where the broking firms offer their services

more than 33 of the firms are engaged in providing company research

services Additionally a host of other value added services such as

fundamental and technical analysis investment banking arbitrage etc are

offered by the firms at different levels

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16

Of the total sample of broking houses providing trading services 52 are

based in the West followed by 25 from North 13 from South and 10

from the East Around 50 of the firms offering IPO related services are based

in the West as compared to 27 in North 13 in South and 10 in East In

providing mutual funds services the Western region was dominant amounting

to 49 followed by 27 from North The South and the East are almost at par

with 13 and 11 respectively

Future Plans

68 of the firms from the sample have envisaged strategies for future

growth With the middle class Indian investor as well as foreign investor

willing to invest in the stock market majority of the firms preferred expansion

of institutional and the Foreign Institutional Investor clients in their areas of

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17

growth Around 84 have shown interest in expanding their institutional

client base Nearly 51 of such firms are located in the West 25 in North

15 are from South and 9 from East Since the past couple of years India

along with Korea and Taiwan has been one of the preferred destinations for

the FIIs With corporate restructuring rising market capitalization and sectoral

friendly policies helping the FIIs more than two thirds of the firms are

interested in increasing their FII client base Amongst these firms west again

has maximum representation of 53 followed by North with 22 South has

15 firms and East makes up for 9

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19

INTRODUCTION TO INDIAINFOLINE

IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an

independent business research and information provider We gradually evolved into a one-

stop financial services solutions provider Our strong management team comprises competent

and dedicated professionals

We are a pan-India financial services organization across 1361 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)

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 and

DGCX 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 ndash India Infoline Investment Services and Moneyline Credit

Limited ndash 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

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20

HISTROY OF INDIAINFOLINE

The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity

Research and Services Private Limited at Mumbai under the Companies Act 1956 with

Registration No 11 93797 The IndiaInfoline Group commenced its operations as an

independent provider of information analysis and research covering Indian businesses

financial markets and economy to institutional customers We became a public limited

company on April 28 2000 and the name of the Company was changed to Probity Research

and Services Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a

mass retail segment and transformed our business model from providing information services

to institutional customers to retail customers Hence we launched our Internet portal

wwwindiainfolinecom in May 1999 and started providing news and market information

independent research interviews with business leaders and other specialized features

In May 2000 the name of our Company was changed to India Infolinecom Limited

to reflect the transformation of our business Over a period of time we have emerged as one

of the leading business and financial information services provider in India

In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of

financial information and analysis by diversifying into transactional services primarily for

online trading in shares and securities and online as well as offline distribution of personal

financial products like mutual funds and RBI Bonds These activities were carried on by our

wholly owned subsidiaries

The India Infoline Grouprsquos broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July 2000 It

combined competitive brokerage rates and research supported by Internet technology

Besides investment advice from an experienced team of research analysts we also offer real

time stock quotes market news and price charts with multiple tools for technical analysis

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21

Acquisition of Agri Marketing Services Limited (Agri)

In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri

Marketing Services Limited from their owners in exchange for the issuance of 508482 of

our equity shares Agri was a direct selling agent of personal financial products including

mutual funds fixed deposits corporate bonds and post-office instruments At the time of our

acquisition Agri operated 32 branches in South and West India serving more than 30000

customers with a staff of approximately 180 employees After the acquisition we changed

the company name to India Infolinecom Distribution Company Limited

The India Infoline group comprising the holding company India Infoline Ltd (NSE

INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian

financial services space India Infoline offers the entire gamut of financial services covering

investment products ranging from Equities and derivatives Commodities Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment

Banking GoI bonds and other small savings instruments It owns and manages the website

wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal

finance stock markets economy and business

A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none

other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo

IndiaInfolinersquos research is available not just over the internet but also on international wire

services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is

amongst the most read Indian brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22

A network of 753 business locations spread over 346 cities across India facilitates the

smooth acquisition and servicing of a large customer base All these offices are connected

with the corporate office in Mumbai with cutting edge networking technology

The group caters to a customer base of over 500000 over a variety of mediums viz online

over the phone and at our branches The Group is strengthening its institutional broking and

investment banking services and has built a team of experienced research analysts sales and

trading professionals

IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will

give a more meaningful picture of the Company to the investors Reference to the company

or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise

specified

VISION

Our vision is to be the most respected company in the financial services space

MISSION

ldquoTo become a full-fledged financial services company known for its quality of advice

personalized services and cutting edge technologyrdquo

COMPANY PHILISOPHY

The IndiaInfoline Group is committed to placing the Investor First by continuously striving

to increase the efficiency of the operations as well as the systems and processes for use of

corporate resources in such a way so as to maximize the value to the stakeholders The Group

aims at achieving not only the highest possible standards of legal and regulatory compliances

but also of effective management

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23

COMMITTEE

Audit Committee

Terms of reference amp Composition Name of members and Chairman The Audit committee

comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv

Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and

Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as

under - To investigate into any matter that may be prescribed under the provisions of Section

292A of The Companies Act 1956 - Recommendation and removal of External Auditor and

fixation of the Audit Fees - Reviewing with the management the financial statements before

submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and

disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function

Compensation Remuneration Committee

Terms of reference amp Composition Name of members and Chairman The Compensation

Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr

Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of

reference of this committee are as under - To fix suitable remuneration package of all the

Executive Directors and Non Executive Directors Senior Employees and officers ie Salary

perquisites bonuses stock options pensions etc - Determination of the fixed component and

performance linked incentives alongwith the performance criteria to all employees of the

company - Service Contracts Notice Period Severance Fees of Directors and employees -

Stock Option details whether to be issued at discount as well as the period over which to be

accrued and over which exercisable - To conduct discussions with the HR department and

form suitable remuneration policies

Share Transfer and Investor Grievance Committee

Details of the Members Compliance Officer No of Complaints received and pending and

pending transfers as on close of the financial year The committee functions under the

Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24

Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R

Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance

Officer of the Company

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock

Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of

both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory

Services and Portfolio Management Services It offers broking services in the Cash and

Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with

NSDL as well as CDSL as a depository participant providing a one-stop solution for clients

trading in the equities market It has recently launched its Investment banking and

Institutional Broking business

A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients

These services are offered to clients as different schemes which are based on differing

investment strategies made to reflect the varied risk-return preferences of clients

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 14: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14

Products

The survey also revealed that in the past couple of years apart from

trading the firms have started offering various investment related value

added services The sustained growth of the economy in the past couple of

years has resulted in broking firms offering many diversified services related

to IPOs mutual funds company research etc However the core trading

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15

activity is still the predominant form of business forming 90 of the firms in

the sample 67 firms are engaged in offering IPO related services The

broking industry seems to have capitalized on the growth of the mutual fund

industry which was pegged at 40 in 2006 More than 50 of the sample

broking houses deal in mutual fund investment services The average growth

in assets under management in the last two years is almost 48 Company

research is another lucrative area where the broking firms offer their services

more than 33 of the firms are engaged in providing company research

services Additionally a host of other value added services such as

fundamental and technical analysis investment banking arbitrage etc are

offered by the firms at different levels

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16

Of the total sample of broking houses providing trading services 52 are

based in the West followed by 25 from North 13 from South and 10

from the East Around 50 of the firms offering IPO related services are based

in the West as compared to 27 in North 13 in South and 10 in East In

providing mutual funds services the Western region was dominant amounting

to 49 followed by 27 from North The South and the East are almost at par

with 13 and 11 respectively

Future Plans

68 of the firms from the sample have envisaged strategies for future

growth With the middle class Indian investor as well as foreign investor

willing to invest in the stock market majority of the firms preferred expansion

of institutional and the Foreign Institutional Investor clients in their areas of

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17

growth Around 84 have shown interest in expanding their institutional

client base Nearly 51 of such firms are located in the West 25 in North

15 are from South and 9 from East Since the past couple of years India

along with Korea and Taiwan has been one of the preferred destinations for

the FIIs With corporate restructuring rising market capitalization and sectoral

friendly policies helping the FIIs more than two thirds of the firms are

interested in increasing their FII client base Amongst these firms west again

has maximum representation of 53 followed by North with 22 South has

15 firms and East makes up for 9

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19

INTRODUCTION TO INDIAINFOLINE

IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an

independent business research and information provider We gradually evolved into a one-

stop financial services solutions provider Our strong management team comprises competent

and dedicated professionals

We are a pan-India financial services organization across 1361 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)

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 and

DGCX 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 ndash India Infoline Investment Services and Moneyline Credit

Limited ndash 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

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20

HISTROY OF INDIAINFOLINE

The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity

Research and Services Private Limited at Mumbai under the Companies Act 1956 with

Registration No 11 93797 The IndiaInfoline Group commenced its operations as an

independent provider of information analysis and research covering Indian businesses

financial markets and economy to institutional customers We became a public limited

company on April 28 2000 and the name of the Company was changed to Probity Research

and Services Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a

mass retail segment and transformed our business model from providing information services

to institutional customers to retail customers Hence we launched our Internet portal

wwwindiainfolinecom in May 1999 and started providing news and market information

independent research interviews with business leaders and other specialized features

In May 2000 the name of our Company was changed to India Infolinecom Limited

to reflect the transformation of our business Over a period of time we have emerged as one

of the leading business and financial information services provider in India

In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of

financial information and analysis by diversifying into transactional services primarily for

online trading in shares and securities and online as well as offline distribution of personal

financial products like mutual funds and RBI Bonds These activities were carried on by our

wholly owned subsidiaries

The India Infoline Grouprsquos broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July 2000 It

combined competitive brokerage rates and research supported by Internet technology

Besides investment advice from an experienced team of research analysts we also offer real

time stock quotes market news and price charts with multiple tools for technical analysis

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21

Acquisition of Agri Marketing Services Limited (Agri)

In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri

Marketing Services Limited from their owners in exchange for the issuance of 508482 of

our equity shares Agri was a direct selling agent of personal financial products including

mutual funds fixed deposits corporate bonds and post-office instruments At the time of our

acquisition Agri operated 32 branches in South and West India serving more than 30000

customers with a staff of approximately 180 employees After the acquisition we changed

the company name to India Infolinecom Distribution Company Limited

The India Infoline group comprising the holding company India Infoline Ltd (NSE

INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian

financial services space India Infoline offers the entire gamut of financial services covering

investment products ranging from Equities and derivatives Commodities Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment

Banking GoI bonds and other small savings instruments It owns and manages the website

wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal

finance stock markets economy and business

A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none

other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo

IndiaInfolinersquos research is available not just over the internet but also on international wire

services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is

amongst the most read Indian brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22

A network of 753 business locations spread over 346 cities across India facilitates the

smooth acquisition and servicing of a large customer base All these offices are connected

with the corporate office in Mumbai with cutting edge networking technology

The group caters to a customer base of over 500000 over a variety of mediums viz online

over the phone and at our branches The Group is strengthening its institutional broking and

investment banking services and has built a team of experienced research analysts sales and

trading professionals

IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will

give a more meaningful picture of the Company to the investors Reference to the company

or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise

specified

VISION

Our vision is to be the most respected company in the financial services space

MISSION

ldquoTo become a full-fledged financial services company known for its quality of advice

personalized services and cutting edge technologyrdquo

COMPANY PHILISOPHY

The IndiaInfoline Group is committed to placing the Investor First by continuously striving

to increase the efficiency of the operations as well as the systems and processes for use of

corporate resources in such a way so as to maximize the value to the stakeholders The Group

aims at achieving not only the highest possible standards of legal and regulatory compliances

but also of effective management

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23

COMMITTEE

Audit Committee

Terms of reference amp Composition Name of members and Chairman The Audit committee

comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv

Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and

Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as

under - To investigate into any matter that may be prescribed under the provisions of Section

292A of The Companies Act 1956 - Recommendation and removal of External Auditor and

fixation of the Audit Fees - Reviewing with the management the financial statements before

submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and

disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function

Compensation Remuneration Committee

Terms of reference amp Composition Name of members and Chairman The Compensation

Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr

Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of

reference of this committee are as under - To fix suitable remuneration package of all the

Executive Directors and Non Executive Directors Senior Employees and officers ie Salary

perquisites bonuses stock options pensions etc - Determination of the fixed component and

performance linked incentives alongwith the performance criteria to all employees of the

company - Service Contracts Notice Period Severance Fees of Directors and employees -

Stock Option details whether to be issued at discount as well as the period over which to be

accrued and over which exercisable - To conduct discussions with the HR department and

form suitable remuneration policies

Share Transfer and Investor Grievance Committee

Details of the Members Compliance Officer No of Complaints received and pending and

pending transfers as on close of the financial year The committee functions under the

Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24

Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R

Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance

Officer of the Company

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock

Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of

both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory

Services and Portfolio Management Services It offers broking services in the Cash and

Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with

NSDL as well as CDSL as a depository participant providing a one-stop solution for clients

trading in the equities market It has recently launched its Investment banking and

Institutional Broking business

A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients

These services are offered to clients as different schemes which are based on differing

investment strategies made to reflect the varied risk-return preferences of clients

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 15: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15

activity is still the predominant form of business forming 90 of the firms in

the sample 67 firms are engaged in offering IPO related services The

broking industry seems to have capitalized on the growth of the mutual fund

industry which was pegged at 40 in 2006 More than 50 of the sample

broking houses deal in mutual fund investment services The average growth

in assets under management in the last two years is almost 48 Company

research is another lucrative area where the broking firms offer their services

more than 33 of the firms are engaged in providing company research

services Additionally a host of other value added services such as

fundamental and technical analysis investment banking arbitrage etc are

offered by the firms at different levels

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16

Of the total sample of broking houses providing trading services 52 are

based in the West followed by 25 from North 13 from South and 10

from the East Around 50 of the firms offering IPO related services are based

in the West as compared to 27 in North 13 in South and 10 in East In

providing mutual funds services the Western region was dominant amounting

to 49 followed by 27 from North The South and the East are almost at par

with 13 and 11 respectively

Future Plans

68 of the firms from the sample have envisaged strategies for future

growth With the middle class Indian investor as well as foreign investor

willing to invest in the stock market majority of the firms preferred expansion

of institutional and the Foreign Institutional Investor clients in their areas of

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17

growth Around 84 have shown interest in expanding their institutional

client base Nearly 51 of such firms are located in the West 25 in North

15 are from South and 9 from East Since the past couple of years India

along with Korea and Taiwan has been one of the preferred destinations for

the FIIs With corporate restructuring rising market capitalization and sectoral

friendly policies helping the FIIs more than two thirds of the firms are

interested in increasing their FII client base Amongst these firms west again

has maximum representation of 53 followed by North with 22 South has

15 firms and East makes up for 9

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19

INTRODUCTION TO INDIAINFOLINE

IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an

independent business research and information provider We gradually evolved into a one-

stop financial services solutions provider Our strong management team comprises competent

and dedicated professionals

We are a pan-India financial services organization across 1361 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)

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 and

DGCX 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 ndash India Infoline Investment Services and Moneyline Credit

Limited ndash 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

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20

HISTROY OF INDIAINFOLINE

The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity

Research and Services Private Limited at Mumbai under the Companies Act 1956 with

Registration No 11 93797 The IndiaInfoline Group commenced its operations as an

independent provider of information analysis and research covering Indian businesses

financial markets and economy to institutional customers We became a public limited

company on April 28 2000 and the name of the Company was changed to Probity Research

and Services Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a

mass retail segment and transformed our business model from providing information services

to institutional customers to retail customers Hence we launched our Internet portal

wwwindiainfolinecom in May 1999 and started providing news and market information

independent research interviews with business leaders and other specialized features

In May 2000 the name of our Company was changed to India Infolinecom Limited

to reflect the transformation of our business Over a period of time we have emerged as one

of the leading business and financial information services provider in India

In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of

financial information and analysis by diversifying into transactional services primarily for

online trading in shares and securities and online as well as offline distribution of personal

financial products like mutual funds and RBI Bonds These activities were carried on by our

wholly owned subsidiaries

The India Infoline Grouprsquos broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July 2000 It

combined competitive brokerage rates and research supported by Internet technology

Besides investment advice from an experienced team of research analysts we also offer real

time stock quotes market news and price charts with multiple tools for technical analysis

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21

Acquisition of Agri Marketing Services Limited (Agri)

In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri

Marketing Services Limited from their owners in exchange for the issuance of 508482 of

our equity shares Agri was a direct selling agent of personal financial products including

mutual funds fixed deposits corporate bonds and post-office instruments At the time of our

acquisition Agri operated 32 branches in South and West India serving more than 30000

customers with a staff of approximately 180 employees After the acquisition we changed

the company name to India Infolinecom Distribution Company Limited

The India Infoline group comprising the holding company India Infoline Ltd (NSE

INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian

financial services space India Infoline offers the entire gamut of financial services covering

investment products ranging from Equities and derivatives Commodities Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment

Banking GoI bonds and other small savings instruments It owns and manages the website

wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal

finance stock markets economy and business

A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none

other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo

IndiaInfolinersquos research is available not just over the internet but also on international wire

services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is

amongst the most read Indian brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22

A network of 753 business locations spread over 346 cities across India facilitates the

smooth acquisition and servicing of a large customer base All these offices are connected

with the corporate office in Mumbai with cutting edge networking technology

The group caters to a customer base of over 500000 over a variety of mediums viz online

over the phone and at our branches The Group is strengthening its institutional broking and

investment banking services and has built a team of experienced research analysts sales and

trading professionals

IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will

give a more meaningful picture of the Company to the investors Reference to the company

or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise

specified

VISION

Our vision is to be the most respected company in the financial services space

MISSION

ldquoTo become a full-fledged financial services company known for its quality of advice

personalized services and cutting edge technologyrdquo

COMPANY PHILISOPHY

The IndiaInfoline Group is committed to placing the Investor First by continuously striving

to increase the efficiency of the operations as well as the systems and processes for use of

corporate resources in such a way so as to maximize the value to the stakeholders The Group

aims at achieving not only the highest possible standards of legal and regulatory compliances

but also of effective management

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23

COMMITTEE

Audit Committee

Terms of reference amp Composition Name of members and Chairman The Audit committee

comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv

Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and

Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as

under - To investigate into any matter that may be prescribed under the provisions of Section

292A of The Companies Act 1956 - Recommendation and removal of External Auditor and

fixation of the Audit Fees - Reviewing with the management the financial statements before

submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and

disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function

Compensation Remuneration Committee

Terms of reference amp Composition Name of members and Chairman The Compensation

Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr

Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of

reference of this committee are as under - To fix suitable remuneration package of all the

Executive Directors and Non Executive Directors Senior Employees and officers ie Salary

perquisites bonuses stock options pensions etc - Determination of the fixed component and

performance linked incentives alongwith the performance criteria to all employees of the

company - Service Contracts Notice Period Severance Fees of Directors and employees -

Stock Option details whether to be issued at discount as well as the period over which to be

accrued and over which exercisable - To conduct discussions with the HR department and

form suitable remuneration policies

Share Transfer and Investor Grievance Committee

Details of the Members Compliance Officer No of Complaints received and pending and

pending transfers as on close of the financial year The committee functions under the

Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24

Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R

Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance

Officer of the Company

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock

Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of

both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory

Services and Portfolio Management Services It offers broking services in the Cash and

Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with

NSDL as well as CDSL as a depository participant providing a one-stop solution for clients

trading in the equities market It has recently launched its Investment banking and

Institutional Broking business

A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients

These services are offered to clients as different schemes which are based on differing

investment strategies made to reflect the varied risk-return preferences of clients

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 16: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16

Of the total sample of broking houses providing trading services 52 are

based in the West followed by 25 from North 13 from South and 10

from the East Around 50 of the firms offering IPO related services are based

in the West as compared to 27 in North 13 in South and 10 in East In

providing mutual funds services the Western region was dominant amounting

to 49 followed by 27 from North The South and the East are almost at par

with 13 and 11 respectively

Future Plans

68 of the firms from the sample have envisaged strategies for future

growth With the middle class Indian investor as well as foreign investor

willing to invest in the stock market majority of the firms preferred expansion

of institutional and the Foreign Institutional Investor clients in their areas of

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17

growth Around 84 have shown interest in expanding their institutional

client base Nearly 51 of such firms are located in the West 25 in North

15 are from South and 9 from East Since the past couple of years India

along with Korea and Taiwan has been one of the preferred destinations for

the FIIs With corporate restructuring rising market capitalization and sectoral

friendly policies helping the FIIs more than two thirds of the firms are

interested in increasing their FII client base Amongst these firms west again

has maximum representation of 53 followed by North with 22 South has

15 firms and East makes up for 9

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19

INTRODUCTION TO INDIAINFOLINE

IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an

independent business research and information provider We gradually evolved into a one-

stop financial services solutions provider Our strong management team comprises competent

and dedicated professionals

We are a pan-India financial services organization across 1361 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)

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 and

DGCX 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 ndash India Infoline Investment Services and Moneyline Credit

Limited ndash 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

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20

HISTROY OF INDIAINFOLINE

The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity

Research and Services Private Limited at Mumbai under the Companies Act 1956 with

Registration No 11 93797 The IndiaInfoline Group commenced its operations as an

independent provider of information analysis and research covering Indian businesses

financial markets and economy to institutional customers We became a public limited

company on April 28 2000 and the name of the Company was changed to Probity Research

and Services Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a

mass retail segment and transformed our business model from providing information services

to institutional customers to retail customers Hence we launched our Internet portal

wwwindiainfolinecom in May 1999 and started providing news and market information

independent research interviews with business leaders and other specialized features

In May 2000 the name of our Company was changed to India Infolinecom Limited

to reflect the transformation of our business Over a period of time we have emerged as one

of the leading business and financial information services provider in India

In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of

financial information and analysis by diversifying into transactional services primarily for

online trading in shares and securities and online as well as offline distribution of personal

financial products like mutual funds and RBI Bonds These activities were carried on by our

wholly owned subsidiaries

The India Infoline Grouprsquos broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July 2000 It

combined competitive brokerage rates and research supported by Internet technology

Besides investment advice from an experienced team of research analysts we also offer real

time stock quotes market news and price charts with multiple tools for technical analysis

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21

Acquisition of Agri Marketing Services Limited (Agri)

In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri

Marketing Services Limited from their owners in exchange for the issuance of 508482 of

our equity shares Agri was a direct selling agent of personal financial products including

mutual funds fixed deposits corporate bonds and post-office instruments At the time of our

acquisition Agri operated 32 branches in South and West India serving more than 30000

customers with a staff of approximately 180 employees After the acquisition we changed

the company name to India Infolinecom Distribution Company Limited

The India Infoline group comprising the holding company India Infoline Ltd (NSE

INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian

financial services space India Infoline offers the entire gamut of financial services covering

investment products ranging from Equities and derivatives Commodities Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment

Banking GoI bonds and other small savings instruments It owns and manages the website

wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal

finance stock markets economy and business

A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none

other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo

IndiaInfolinersquos research is available not just over the internet but also on international wire

services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is

amongst the most read Indian brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22

A network of 753 business locations spread over 346 cities across India facilitates the

smooth acquisition and servicing of a large customer base All these offices are connected

with the corporate office in Mumbai with cutting edge networking technology

The group caters to a customer base of over 500000 over a variety of mediums viz online

over the phone and at our branches The Group is strengthening its institutional broking and

investment banking services and has built a team of experienced research analysts sales and

trading professionals

IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will

give a more meaningful picture of the Company to the investors Reference to the company

or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise

specified

VISION

Our vision is to be the most respected company in the financial services space

MISSION

ldquoTo become a full-fledged financial services company known for its quality of advice

personalized services and cutting edge technologyrdquo

COMPANY PHILISOPHY

The IndiaInfoline Group is committed to placing the Investor First by continuously striving

to increase the efficiency of the operations as well as the systems and processes for use of

corporate resources in such a way so as to maximize the value to the stakeholders The Group

aims at achieving not only the highest possible standards of legal and regulatory compliances

but also of effective management

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23

COMMITTEE

Audit Committee

Terms of reference amp Composition Name of members and Chairman The Audit committee

comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv

Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and

Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as

under - To investigate into any matter that may be prescribed under the provisions of Section

292A of The Companies Act 1956 - Recommendation and removal of External Auditor and

fixation of the Audit Fees - Reviewing with the management the financial statements before

submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and

disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function

Compensation Remuneration Committee

Terms of reference amp Composition Name of members and Chairman The Compensation

Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr

Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of

reference of this committee are as under - To fix suitable remuneration package of all the

Executive Directors and Non Executive Directors Senior Employees and officers ie Salary

perquisites bonuses stock options pensions etc - Determination of the fixed component and

performance linked incentives alongwith the performance criteria to all employees of the

company - Service Contracts Notice Period Severance Fees of Directors and employees -

Stock Option details whether to be issued at discount as well as the period over which to be

accrued and over which exercisable - To conduct discussions with the HR department and

form suitable remuneration policies

Share Transfer and Investor Grievance Committee

Details of the Members Compliance Officer No of Complaints received and pending and

pending transfers as on close of the financial year The committee functions under the

Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24

Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R

Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance

Officer of the Company

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock

Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of

both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory

Services and Portfolio Management Services It offers broking services in the Cash and

Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with

NSDL as well as CDSL as a depository participant providing a one-stop solution for clients

trading in the equities market It has recently launched its Investment banking and

Institutional Broking business

A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients

These services are offered to clients as different schemes which are based on differing

investment strategies made to reflect the varied risk-return preferences of clients

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 17: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17

growth Around 84 have shown interest in expanding their institutional

client base Nearly 51 of such firms are located in the West 25 in North

15 are from South and 9 from East Since the past couple of years India

along with Korea and Taiwan has been one of the preferred destinations for

the FIIs With corporate restructuring rising market capitalization and sectoral

friendly policies helping the FIIs more than two thirds of the firms are

interested in increasing their FII client base Amongst these firms west again

has maximum representation of 53 followed by North with 22 South has

15 firms and East makes up for 9

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19

INTRODUCTION TO INDIAINFOLINE

IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an

independent business research and information provider We gradually evolved into a one-

stop financial services solutions provider Our strong management team comprises competent

and dedicated professionals

We are a pan-India financial services organization across 1361 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)

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 and

DGCX 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 ndash India Infoline Investment Services and Moneyline Credit

Limited ndash 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

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20

HISTROY OF INDIAINFOLINE

The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity

Research and Services Private Limited at Mumbai under the Companies Act 1956 with

Registration No 11 93797 The IndiaInfoline Group commenced its operations as an

independent provider of information analysis and research covering Indian businesses

financial markets and economy to institutional customers We became a public limited

company on April 28 2000 and the name of the Company was changed to Probity Research

and Services Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a

mass retail segment and transformed our business model from providing information services

to institutional customers to retail customers Hence we launched our Internet portal

wwwindiainfolinecom in May 1999 and started providing news and market information

independent research interviews with business leaders and other specialized features

In May 2000 the name of our Company was changed to India Infolinecom Limited

to reflect the transformation of our business Over a period of time we have emerged as one

of the leading business and financial information services provider in India

In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of

financial information and analysis by diversifying into transactional services primarily for

online trading in shares and securities and online as well as offline distribution of personal

financial products like mutual funds and RBI Bonds These activities were carried on by our

wholly owned subsidiaries

The India Infoline Grouprsquos broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July 2000 It

combined competitive brokerage rates and research supported by Internet technology

Besides investment advice from an experienced team of research analysts we also offer real

time stock quotes market news and price charts with multiple tools for technical analysis

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21

Acquisition of Agri Marketing Services Limited (Agri)

In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri

Marketing Services Limited from their owners in exchange for the issuance of 508482 of

our equity shares Agri was a direct selling agent of personal financial products including

mutual funds fixed deposits corporate bonds and post-office instruments At the time of our

acquisition Agri operated 32 branches in South and West India serving more than 30000

customers with a staff of approximately 180 employees After the acquisition we changed

the company name to India Infolinecom Distribution Company Limited

The India Infoline group comprising the holding company India Infoline Ltd (NSE

INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian

financial services space India Infoline offers the entire gamut of financial services covering

investment products ranging from Equities and derivatives Commodities Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment

Banking GoI bonds and other small savings instruments It owns and manages the website

wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal

finance stock markets economy and business

A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none

other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo

IndiaInfolinersquos research is available not just over the internet but also on international wire

services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is

amongst the most read Indian brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22

A network of 753 business locations spread over 346 cities across India facilitates the

smooth acquisition and servicing of a large customer base All these offices are connected

with the corporate office in Mumbai with cutting edge networking technology

The group caters to a customer base of over 500000 over a variety of mediums viz online

over the phone and at our branches The Group is strengthening its institutional broking and

investment banking services and has built a team of experienced research analysts sales and

trading professionals

IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will

give a more meaningful picture of the Company to the investors Reference to the company

or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise

specified

VISION

Our vision is to be the most respected company in the financial services space

MISSION

ldquoTo become a full-fledged financial services company known for its quality of advice

personalized services and cutting edge technologyrdquo

COMPANY PHILISOPHY

The IndiaInfoline Group is committed to placing the Investor First by continuously striving

to increase the efficiency of the operations as well as the systems and processes for use of

corporate resources in such a way so as to maximize the value to the stakeholders The Group

aims at achieving not only the highest possible standards of legal and regulatory compliances

but also of effective management

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23

COMMITTEE

Audit Committee

Terms of reference amp Composition Name of members and Chairman The Audit committee

comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv

Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and

Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as

under - To investigate into any matter that may be prescribed under the provisions of Section

292A of The Companies Act 1956 - Recommendation and removal of External Auditor and

fixation of the Audit Fees - Reviewing with the management the financial statements before

submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and

disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function

Compensation Remuneration Committee

Terms of reference amp Composition Name of members and Chairman The Compensation

Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr

Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of

reference of this committee are as under - To fix suitable remuneration package of all the

Executive Directors and Non Executive Directors Senior Employees and officers ie Salary

perquisites bonuses stock options pensions etc - Determination of the fixed component and

performance linked incentives alongwith the performance criteria to all employees of the

company - Service Contracts Notice Period Severance Fees of Directors and employees -

Stock Option details whether to be issued at discount as well as the period over which to be

accrued and over which exercisable - To conduct discussions with the HR department and

form suitable remuneration policies

Share Transfer and Investor Grievance Committee

Details of the Members Compliance Officer No of Complaints received and pending and

pending transfers as on close of the financial year The committee functions under the

Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24

Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R

Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance

Officer of the Company

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock

Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of

both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory

Services and Portfolio Management Services It offers broking services in the Cash and

Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with

NSDL as well as CDSL as a depository participant providing a one-stop solution for clients

trading in the equities market It has recently launched its Investment banking and

Institutional Broking business

A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients

These services are offered to clients as different schemes which are based on differing

investment strategies made to reflect the varied risk-return preferences of clients

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 18: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19

INTRODUCTION TO INDIAINFOLINE

IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an

independent business research and information provider We gradually evolved into a one-

stop financial services solutions provider Our strong management team comprises competent

and dedicated professionals

We are a pan-India financial services organization across 1361 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)

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 and

DGCX 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 ndash India Infoline Investment Services and Moneyline Credit

Limited ndash 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

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20

HISTROY OF INDIAINFOLINE

The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity

Research and Services Private Limited at Mumbai under the Companies Act 1956 with

Registration No 11 93797 The IndiaInfoline Group commenced its operations as an

independent provider of information analysis and research covering Indian businesses

financial markets and economy to institutional customers We became a public limited

company on April 28 2000 and the name of the Company was changed to Probity Research

and Services Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a

mass retail segment and transformed our business model from providing information services

to institutional customers to retail customers Hence we launched our Internet portal

wwwindiainfolinecom in May 1999 and started providing news and market information

independent research interviews with business leaders and other specialized features

In May 2000 the name of our Company was changed to India Infolinecom Limited

to reflect the transformation of our business Over a period of time we have emerged as one

of the leading business and financial information services provider in India

In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of

financial information and analysis by diversifying into transactional services primarily for

online trading in shares and securities and online as well as offline distribution of personal

financial products like mutual funds and RBI Bonds These activities were carried on by our

wholly owned subsidiaries

The India Infoline Grouprsquos broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July 2000 It

combined competitive brokerage rates and research supported by Internet technology

Besides investment advice from an experienced team of research analysts we also offer real

time stock quotes market news and price charts with multiple tools for technical analysis

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21

Acquisition of Agri Marketing Services Limited (Agri)

In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri

Marketing Services Limited from their owners in exchange for the issuance of 508482 of

our equity shares Agri was a direct selling agent of personal financial products including

mutual funds fixed deposits corporate bonds and post-office instruments At the time of our

acquisition Agri operated 32 branches in South and West India serving more than 30000

customers with a staff of approximately 180 employees After the acquisition we changed

the company name to India Infolinecom Distribution Company Limited

The India Infoline group comprising the holding company India Infoline Ltd (NSE

INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian

financial services space India Infoline offers the entire gamut of financial services covering

investment products ranging from Equities and derivatives Commodities Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment

Banking GoI bonds and other small savings instruments It owns and manages the website

wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal

finance stock markets economy and business

A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none

other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo

IndiaInfolinersquos research is available not just over the internet but also on international wire

services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is

amongst the most read Indian brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22

A network of 753 business locations spread over 346 cities across India facilitates the

smooth acquisition and servicing of a large customer base All these offices are connected

with the corporate office in Mumbai with cutting edge networking technology

The group caters to a customer base of over 500000 over a variety of mediums viz online

over the phone and at our branches The Group is strengthening its institutional broking and

investment banking services and has built a team of experienced research analysts sales and

trading professionals

IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will

give a more meaningful picture of the Company to the investors Reference to the company

or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise

specified

VISION

Our vision is to be the most respected company in the financial services space

MISSION

ldquoTo become a full-fledged financial services company known for its quality of advice

personalized services and cutting edge technologyrdquo

COMPANY PHILISOPHY

The IndiaInfoline Group is committed to placing the Investor First by continuously striving

to increase the efficiency of the operations as well as the systems and processes for use of

corporate resources in such a way so as to maximize the value to the stakeholders The Group

aims at achieving not only the highest possible standards of legal and regulatory compliances

but also of effective management

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23

COMMITTEE

Audit Committee

Terms of reference amp Composition Name of members and Chairman The Audit committee

comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv

Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and

Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as

under - To investigate into any matter that may be prescribed under the provisions of Section

292A of The Companies Act 1956 - Recommendation and removal of External Auditor and

fixation of the Audit Fees - Reviewing with the management the financial statements before

submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and

disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function

Compensation Remuneration Committee

Terms of reference amp Composition Name of members and Chairman The Compensation

Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr

Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of

reference of this committee are as under - To fix suitable remuneration package of all the

Executive Directors and Non Executive Directors Senior Employees and officers ie Salary

perquisites bonuses stock options pensions etc - Determination of the fixed component and

performance linked incentives alongwith the performance criteria to all employees of the

company - Service Contracts Notice Period Severance Fees of Directors and employees -

Stock Option details whether to be issued at discount as well as the period over which to be

accrued and over which exercisable - To conduct discussions with the HR department and

form suitable remuneration policies

Share Transfer and Investor Grievance Committee

Details of the Members Compliance Officer No of Complaints received and pending and

pending transfers as on close of the financial year The committee functions under the

Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24

Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R

Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance

Officer of the Company

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock

Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of

both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory

Services and Portfolio Management Services It offers broking services in the Cash and

Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with

NSDL as well as CDSL as a depository participant providing a one-stop solution for clients

trading in the equities market It has recently launched its Investment banking and

Institutional Broking business

A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients

These services are offered to clients as different schemes which are based on differing

investment strategies made to reflect the varied risk-return preferences of clients

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 19: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19

INTRODUCTION TO INDIAINFOLINE

IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an

independent business research and information provider We gradually evolved into a one-

stop financial services solutions provider Our strong management team comprises competent

and dedicated professionals

We are a pan-India financial services organization across 1361 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)

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 and

DGCX 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 ndash India Infoline Investment Services and Moneyline Credit

Limited ndash 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

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20

HISTROY OF INDIAINFOLINE

The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity

Research and Services Private Limited at Mumbai under the Companies Act 1956 with

Registration No 11 93797 The IndiaInfoline Group commenced its operations as an

independent provider of information analysis and research covering Indian businesses

financial markets and economy to institutional customers We became a public limited

company on April 28 2000 and the name of the Company was changed to Probity Research

and Services Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a

mass retail segment and transformed our business model from providing information services

to institutional customers to retail customers Hence we launched our Internet portal

wwwindiainfolinecom in May 1999 and started providing news and market information

independent research interviews with business leaders and other specialized features

In May 2000 the name of our Company was changed to India Infolinecom Limited

to reflect the transformation of our business Over a period of time we have emerged as one

of the leading business and financial information services provider in India

In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of

financial information and analysis by diversifying into transactional services primarily for

online trading in shares and securities and online as well as offline distribution of personal

financial products like mutual funds and RBI Bonds These activities were carried on by our

wholly owned subsidiaries

The India Infoline Grouprsquos broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July 2000 It

combined competitive brokerage rates and research supported by Internet technology

Besides investment advice from an experienced team of research analysts we also offer real

time stock quotes market news and price charts with multiple tools for technical analysis

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21

Acquisition of Agri Marketing Services Limited (Agri)

In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri

Marketing Services Limited from their owners in exchange for the issuance of 508482 of

our equity shares Agri was a direct selling agent of personal financial products including

mutual funds fixed deposits corporate bonds and post-office instruments At the time of our

acquisition Agri operated 32 branches in South and West India serving more than 30000

customers with a staff of approximately 180 employees After the acquisition we changed

the company name to India Infolinecom Distribution Company Limited

The India Infoline group comprising the holding company India Infoline Ltd (NSE

INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian

financial services space India Infoline offers the entire gamut of financial services covering

investment products ranging from Equities and derivatives Commodities Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment

Banking GoI bonds and other small savings instruments It owns and manages the website

wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal

finance stock markets economy and business

A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none

other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo

IndiaInfolinersquos research is available not just over the internet but also on international wire

services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is

amongst the most read Indian brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22

A network of 753 business locations spread over 346 cities across India facilitates the

smooth acquisition and servicing of a large customer base All these offices are connected

with the corporate office in Mumbai with cutting edge networking technology

The group caters to a customer base of over 500000 over a variety of mediums viz online

over the phone and at our branches The Group is strengthening its institutional broking and

investment banking services and has built a team of experienced research analysts sales and

trading professionals

IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will

give a more meaningful picture of the Company to the investors Reference to the company

or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise

specified

VISION

Our vision is to be the most respected company in the financial services space

MISSION

ldquoTo become a full-fledged financial services company known for its quality of advice

personalized services and cutting edge technologyrdquo

COMPANY PHILISOPHY

The IndiaInfoline Group is committed to placing the Investor First by continuously striving

to increase the efficiency of the operations as well as the systems and processes for use of

corporate resources in such a way so as to maximize the value to the stakeholders The Group

aims at achieving not only the highest possible standards of legal and regulatory compliances

but also of effective management

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23

COMMITTEE

Audit Committee

Terms of reference amp Composition Name of members and Chairman The Audit committee

comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv

Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and

Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as

under - To investigate into any matter that may be prescribed under the provisions of Section

292A of The Companies Act 1956 - Recommendation and removal of External Auditor and

fixation of the Audit Fees - Reviewing with the management the financial statements before

submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and

disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function

Compensation Remuneration Committee

Terms of reference amp Composition Name of members and Chairman The Compensation

Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr

Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of

reference of this committee are as under - To fix suitable remuneration package of all the

Executive Directors and Non Executive Directors Senior Employees and officers ie Salary

perquisites bonuses stock options pensions etc - Determination of the fixed component and

performance linked incentives alongwith the performance criteria to all employees of the

company - Service Contracts Notice Period Severance Fees of Directors and employees -

Stock Option details whether to be issued at discount as well as the period over which to be

accrued and over which exercisable - To conduct discussions with the HR department and

form suitable remuneration policies

Share Transfer and Investor Grievance Committee

Details of the Members Compliance Officer No of Complaints received and pending and

pending transfers as on close of the financial year The committee functions under the

Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24

Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R

Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance

Officer of the Company

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock

Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of

both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory

Services and Portfolio Management Services It offers broking services in the Cash and

Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with

NSDL as well as CDSL as a depository participant providing a one-stop solution for clients

trading in the equities market It has recently launched its Investment banking and

Institutional Broking business

A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients

These services are offered to clients as different schemes which are based on differing

investment strategies made to reflect the varied risk-return preferences of clients

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 20: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20

HISTROY OF INDIAINFOLINE

The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity

Research and Services Private Limited at Mumbai under the Companies Act 1956 with

Registration No 11 93797 The IndiaInfoline Group commenced its operations as an

independent provider of information analysis and research covering Indian businesses

financial markets and economy to institutional customers We became a public limited

company on April 28 2000 and the name of the Company was changed to Probity Research

and Services Limited The name of the Company was changed to India Infolinecom Limited

on May 23 2000 and later to India Infoline Limited on March 23 2001

In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a

mass retail segment and transformed our business model from providing information services

to institutional customers to retail customers Hence we launched our Internet portal

wwwindiainfolinecom in May 1999 and started providing news and market information

independent research interviews with business leaders and other specialized features

In May 2000 the name of our Company was changed to India Infolinecom Limited

to reflect the transformation of our business Over a period of time we have emerged as one

of the leading business and financial information services provider in India

In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of

financial information and analysis by diversifying into transactional services primarily for

online trading in shares and securities and online as well as offline distribution of personal

financial products like mutual funds and RBI Bonds These activities were carried on by our

wholly owned subsidiaries

The India Infoline Grouprsquos broking services was launched under the brand name of

5paisacom through our subsidiary India Infoline Securities Private Limited and

www5paisacom the e-broking portal was launched for online trading in July 2000 It

combined competitive brokerage rates and research supported by Internet technology

Besides investment advice from an experienced team of research analysts we also offer real

time stock quotes market news and price charts with multiple tools for technical analysis

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21

Acquisition of Agri Marketing Services Limited (Agri)

In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri

Marketing Services Limited from their owners in exchange for the issuance of 508482 of

our equity shares Agri was a direct selling agent of personal financial products including

mutual funds fixed deposits corporate bonds and post-office instruments At the time of our

acquisition Agri operated 32 branches in South and West India serving more than 30000

customers with a staff of approximately 180 employees After the acquisition we changed

the company name to India Infolinecom Distribution Company Limited

The India Infoline group comprising the holding company India Infoline Ltd (NSE

INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian

financial services space India Infoline offers the entire gamut of financial services covering

investment products ranging from Equities and derivatives Commodities Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment

Banking GoI bonds and other small savings instruments It owns and manages the website

wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal

finance stock markets economy and business

A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none

other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo

IndiaInfolinersquos research is available not just over the internet but also on international wire

services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is

amongst the most read Indian brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22

A network of 753 business locations spread over 346 cities across India facilitates the

smooth acquisition and servicing of a large customer base All these offices are connected

with the corporate office in Mumbai with cutting edge networking technology

The group caters to a customer base of over 500000 over a variety of mediums viz online

over the phone and at our branches The Group is strengthening its institutional broking and

investment banking services and has built a team of experienced research analysts sales and

trading professionals

IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will

give a more meaningful picture of the Company to the investors Reference to the company

or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise

specified

VISION

Our vision is to be the most respected company in the financial services space

MISSION

ldquoTo become a full-fledged financial services company known for its quality of advice

personalized services and cutting edge technologyrdquo

COMPANY PHILISOPHY

The IndiaInfoline Group is committed to placing the Investor First by continuously striving

to increase the efficiency of the operations as well as the systems and processes for use of

corporate resources in such a way so as to maximize the value to the stakeholders The Group

aims at achieving not only the highest possible standards of legal and regulatory compliances

but also of effective management

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23

COMMITTEE

Audit Committee

Terms of reference amp Composition Name of members and Chairman The Audit committee

comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv

Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and

Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as

under - To investigate into any matter that may be prescribed under the provisions of Section

292A of The Companies Act 1956 - Recommendation and removal of External Auditor and

fixation of the Audit Fees - Reviewing with the management the financial statements before

submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and

disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function

Compensation Remuneration Committee

Terms of reference amp Composition Name of members and Chairman The Compensation

Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr

Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of

reference of this committee are as under - To fix suitable remuneration package of all the

Executive Directors and Non Executive Directors Senior Employees and officers ie Salary

perquisites bonuses stock options pensions etc - Determination of the fixed component and

performance linked incentives alongwith the performance criteria to all employees of the

company - Service Contracts Notice Period Severance Fees of Directors and employees -

Stock Option details whether to be issued at discount as well as the period over which to be

accrued and over which exercisable - To conduct discussions with the HR department and

form suitable remuneration policies

Share Transfer and Investor Grievance Committee

Details of the Members Compliance Officer No of Complaints received and pending and

pending transfers as on close of the financial year The committee functions under the

Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24

Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R

Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance

Officer of the Company

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock

Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of

both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory

Services and Portfolio Management Services It offers broking services in the Cash and

Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with

NSDL as well as CDSL as a depository participant providing a one-stop solution for clients

trading in the equities market It has recently launched its Investment banking and

Institutional Broking business

A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients

These services are offered to clients as different schemes which are based on differing

investment strategies made to reflect the varied risk-return preferences of clients

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 21: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21

Acquisition of Agri Marketing Services Limited (Agri)

In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri

Marketing Services Limited from their owners in exchange for the issuance of 508482 of

our equity shares Agri was a direct selling agent of personal financial products including

mutual funds fixed deposits corporate bonds and post-office instruments At the time of our

acquisition Agri operated 32 branches in South and West India serving more than 30000

customers with a staff of approximately 180 employees After the acquisition we changed

the company name to India Infolinecom Distribution Company Limited

The India Infoline group comprising the holding company India Infoline Ltd (NSE

INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian

financial services space India Infoline offers the entire gamut of financial services covering

investment products ranging from Equities and derivatives Commodities Portfolio

Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment

Banking GoI bonds and other small savings instruments It owns and manages the website

wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal

finance stock markets economy and business

A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none

other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo

IndiaInfolinersquos research is available not just over the internet but also on international wire

services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is

amongst the most read Indian brokers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22

A network of 753 business locations spread over 346 cities across India facilitates the

smooth acquisition and servicing of a large customer base All these offices are connected

with the corporate office in Mumbai with cutting edge networking technology

The group caters to a customer base of over 500000 over a variety of mediums viz online

over the phone and at our branches The Group is strengthening its institutional broking and

investment banking services and has built a team of experienced research analysts sales and

trading professionals

IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will

give a more meaningful picture of the Company to the investors Reference to the company

or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise

specified

VISION

Our vision is to be the most respected company in the financial services space

MISSION

ldquoTo become a full-fledged financial services company known for its quality of advice

personalized services and cutting edge technologyrdquo

COMPANY PHILISOPHY

The IndiaInfoline Group is committed to placing the Investor First by continuously striving

to increase the efficiency of the operations as well as the systems and processes for use of

corporate resources in such a way so as to maximize the value to the stakeholders The Group

aims at achieving not only the highest possible standards of legal and regulatory compliances

but also of effective management

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23

COMMITTEE

Audit Committee

Terms of reference amp Composition Name of members and Chairman The Audit committee

comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv

Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and

Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as

under - To investigate into any matter that may be prescribed under the provisions of Section

292A of The Companies Act 1956 - Recommendation and removal of External Auditor and

fixation of the Audit Fees - Reviewing with the management the financial statements before

submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and

disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function

Compensation Remuneration Committee

Terms of reference amp Composition Name of members and Chairman The Compensation

Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr

Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of

reference of this committee are as under - To fix suitable remuneration package of all the

Executive Directors and Non Executive Directors Senior Employees and officers ie Salary

perquisites bonuses stock options pensions etc - Determination of the fixed component and

performance linked incentives alongwith the performance criteria to all employees of the

company - Service Contracts Notice Period Severance Fees of Directors and employees -

Stock Option details whether to be issued at discount as well as the period over which to be

accrued and over which exercisable - To conduct discussions with the HR department and

form suitable remuneration policies

Share Transfer and Investor Grievance Committee

Details of the Members Compliance Officer No of Complaints received and pending and

pending transfers as on close of the financial year The committee functions under the

Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24

Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R

Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance

Officer of the Company

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock

Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of

both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory

Services and Portfolio Management Services It offers broking services in the Cash and

Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with

NSDL as well as CDSL as a depository participant providing a one-stop solution for clients

trading in the equities market It has recently launched its Investment banking and

Institutional Broking business

A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients

These services are offered to clients as different schemes which are based on differing

investment strategies made to reflect the varied risk-return preferences of clients

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 22: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22

A network of 753 business locations spread over 346 cities across India facilitates the

smooth acquisition and servicing of a large customer base All these offices are connected

with the corporate office in Mumbai with cutting edge networking technology

The group caters to a customer base of over 500000 over a variety of mediums viz online

over the phone and at our branches The Group is strengthening its institutional broking and

investment banking services and has built a team of experienced research analysts sales and

trading professionals

IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will

give a more meaningful picture of the Company to the investors Reference to the company

or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise

specified

VISION

Our vision is to be the most respected company in the financial services space

MISSION

ldquoTo become a full-fledged financial services company known for its quality of advice

personalized services and cutting edge technologyrdquo

COMPANY PHILISOPHY

The IndiaInfoline Group is committed to placing the Investor First by continuously striving

to increase the efficiency of the operations as well as the systems and processes for use of

corporate resources in such a way so as to maximize the value to the stakeholders The Group

aims at achieving not only the highest possible standards of legal and regulatory compliances

but also of effective management

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23

COMMITTEE

Audit Committee

Terms of reference amp Composition Name of members and Chairman The Audit committee

comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv

Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and

Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as

under - To investigate into any matter that may be prescribed under the provisions of Section

292A of The Companies Act 1956 - Recommendation and removal of External Auditor and

fixation of the Audit Fees - Reviewing with the management the financial statements before

submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and

disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function

Compensation Remuneration Committee

Terms of reference amp Composition Name of members and Chairman The Compensation

Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr

Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of

reference of this committee are as under - To fix suitable remuneration package of all the

Executive Directors and Non Executive Directors Senior Employees and officers ie Salary

perquisites bonuses stock options pensions etc - Determination of the fixed component and

performance linked incentives alongwith the performance criteria to all employees of the

company - Service Contracts Notice Period Severance Fees of Directors and employees -

Stock Option details whether to be issued at discount as well as the period over which to be

accrued and over which exercisable - To conduct discussions with the HR department and

form suitable remuneration policies

Share Transfer and Investor Grievance Committee

Details of the Members Compliance Officer No of Complaints received and pending and

pending transfers as on close of the financial year The committee functions under the

Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24

Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R

Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance

Officer of the Company

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock

Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of

both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory

Services and Portfolio Management Services It offers broking services in the Cash and

Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with

NSDL as well as CDSL as a depository participant providing a one-stop solution for clients

trading in the equities market It has recently launched its Investment banking and

Institutional Broking business

A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients

These services are offered to clients as different schemes which are based on differing

investment strategies made to reflect the varied risk-return preferences of clients

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 23: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23

COMMITTEE

Audit Committee

Terms of reference amp Composition Name of members and Chairman The Audit committee

comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv

Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and

Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as

under - To investigate into any matter that may be prescribed under the provisions of Section

292A of The Companies Act 1956 - Recommendation and removal of External Auditor and

fixation of the Audit Fees - Reviewing with the management the financial statements before

submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and

disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function

Compensation Remuneration Committee

Terms of reference amp Composition Name of members and Chairman The Compensation

Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr

Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of

reference of this committee are as under - To fix suitable remuneration package of all the

Executive Directors and Non Executive Directors Senior Employees and officers ie Salary

perquisites bonuses stock options pensions etc - Determination of the fixed component and

performance linked incentives alongwith the performance criteria to all employees of the

company - Service Contracts Notice Period Severance Fees of Directors and employees -

Stock Option details whether to be issued at discount as well as the period over which to be

accrued and over which exercisable - To conduct discussions with the HR department and

form suitable remuneration policies

Share Transfer and Investor Grievance Committee

Details of the Members Compliance Officer No of Complaints received and pending and

pending transfers as on close of the financial year The committee functions under the

Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24

Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R

Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance

Officer of the Company

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock

Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of

both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory

Services and Portfolio Management Services It offers broking services in the Cash and

Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with

NSDL as well as CDSL as a depository participant providing a one-stop solution for clients

trading in the equities market It has recently launched its Investment banking and

Institutional Broking business

A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients

These services are offered to clients as different schemes which are based on differing

investment strategies made to reflect the varied risk-return preferences of clients

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 24: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24

Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R

Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance

Officer of the Company

COMPANY STRUCTURE

IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock

Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of

both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory

Services and Portfolio Management Services It offers broking services in the Cash and

Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with

NSDL as well as CDSL as a depository participant providing a one-stop solution for clients

trading in the equities market It has recently launched its Investment banking and

Institutional Broking business

A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients

These services are offered to clients as different schemes which are based on differing

investment strategies made to reflect the varied risk-return preferences of clients

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 25: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25

PRODUCT amp SERVICES

Equities

India Infoline 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 India Infoline India Infoline leveraged technology to bring the convenience of trading to

the investorrsquos location of preference (residence or office) through computerized access

India Infoline made it possible for clients to view transaction costs and ledger updates in

real time

Over the last five years India Infoline sharpened its competitive edge through the

following initiatives

Multi-channel delivery model

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking The Companies network of branches also allows customers to

place orders on phone or visit our branches for trading

Integrated middle and back office

The customer can trade on the BSE and NSE in the cash as well as the derivatives segment

all through the available multiple options of Internet phone or branch presence

Multiple-trading options

The Company harnessed technology to offer services at among the lowest rates in the

business

Membership

The Company widened client reach in trading on the domestic and international exchanges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 26: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which

facilitate business growth without a corresponding increase in costs

Content

The Company has leveraged its research capability to provide regular updates and

investment picks across the short and long-term

Service

Clients can access the customer service team through various media like toll-free lines

emails and Internet- messenger chat for instant query resolution The Companies customer

service executives proactively contact customers to inform them of key changes and

initiatives taken by the Company Business World rated the Companies customer service as

Best in their survey of online trading sites carried out in December 2003

Key features

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant providing a

one-stop solution for clients trading in the equities market

Broking services in cash and derivative segments online as well as offline

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500000 clients

Provision of free and world-class research to all clients

Commodities

India Infolines extension into commodities trading reconciles its strategic intent to emerge

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

empowered it with requisite skills and technologies Increased offering The Companies

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 MCX commenced operations only in 2003) Average monthly

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 27: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27

turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 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

IndiaInfoline distinguished its business through the interplay of knowledge and

technology

Complete solution

The Company provides a complete - advice to execution solution facilitated by information

and advice on likely commodity trends in the Indian and international environment

Technology

The Company has extended the trading terminal to the investors homeworkplace

reinforced with real-time commodity information and ledger position

Rates

The Company harnessed technology to offer services at among the lowest rates in the

business Membership The Company widened client reach in trading on the domestic and

international exchanges

Key Features

Enjoys memberships with the MCX and NCDEX two leading Indian commodities

exchanges

Recently acquired membership of the DGCX

Multi-channel delivery model making it among the select few to offer online as well as

offline trading facilities

Extended commodity trading to retail investors among the few Indian financial

intermediaries to do so

Online business at 80 of revenues dominates commodities trading revenues

Provides regular commodity updates pertaining to the Indian and international

environment

INSURANCE

An entry into this segment helped complete the clients product basket concurrently it graduated

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 28: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28

the Company into a one stop retail financial solutions provider To ensure maximum reach to

customers across India we have employed a multi pronged approach and reach out to customers

via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000

a number of private sector insurance service providers commenced operations aggressively and

helped grow the market

The Companies entry into the insurance sector derisked the Company from a predominant

dependence on broking and equity-linked revenues The annuity based income generated from

insurance intermediation result in solid core revenues across the tenure of the policy

Over the last five years India Infoline sharpened its competitive edge in this business segment

through the following initiatives

Client base

Grew its 40000 strong client base through knowledge-led analysis translating into an attractive

opportunity to cross-sell products and generate referral business

Distribution network

Invested in a distribution network of 177 branches across 19 states which provided it with an

unmatched reach within its segment

Hands-on training

Invested aggressively in training its field force more than 100 hours a year in product attributes

across the insurance sector - highlighting various product details and marketing skills apart from

regular meets where best practices are shared

Technology

The Company provides a prudent mix of proprietary and outsourced technologies which facilitate

business growth without a corresponding increase in costs

Research and advice

Provided clients with advice on diverse investment products based on the customers existing and

prospective financial profile

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 29: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29

Key features

India Infoline was the first corporate in India to get the agency licence in early 2001

The Company is the biggest corporate agency in India for life insurance products

The Company operates multiple channels namely branch network preferred client

group direct marketing corporate tax advisory walk-ins and seminars to reach out to

customers

INVEST ONLINE

India Infoline has made investing in Mutual funds and primary market so

effortless All you have to do is register with us and thatrsquos all No paperwork no

queues and No registration charges

If you are 5p customer use your existing login ID and Ledger (fund transfer) password

Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by

in-depth information and research to help you invest effortlessly

INVEST IN MF

Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth

research and advice from research house and tools configured as investor friendly

Investing in Mutual Funds has never been easier

APPLY IN IPOs

You could also invest in Initial Public Offers (IPOs) online without going through the

hassles of filling ANY application form paperwork

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 30: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30

Know more about IPO

Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

about to hit the market and analysis on these recent IPO listings

prospectusoffer documents and IPO reports are few of the features which help

you keep on top of the IPO markets

Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home

The different Housing Loan products can be classified as

Home Loans amp Home Extension Loans

NRI Loans

Land Loans

Home Equity Loans

What is a housing loan

Who can apply

General Terms and conditions

of a Housing Loan product

Charges applicable to housing

loan products

Repayment capacity

Credit documentation

Legal documentation

Tax Benefits

Property Insurance

What is a housing loan

They say you mustnt trust a man till you know his house Everyone likes hearing people say

Wow what a beautiful house you have From cave dwelling we have evolved and now a

house provides far more than just shelterit also becomes a source of pride A Housing Loan

is used as finance to help you buy or modify that perfect home The different Housing Loan

products can be classified as

Home Loan

Home Extension Loans

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 31: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31

Home Improvement Loans

Land Loans

NRI Loans

Home Equity Loans

Short term Bridging Loans

Balance Transfer

Who can apply

As long as you want to buy a house in India you can apply for a Home Loan You could be a

Resident Indian or an NRI you could want to buy a property now or in the future but you

may still apply for a Home Loan In case you go with the last option and want to wait before

you consider nests all you have to be sure of is the amount you are willing to spend on this

property and the HfIs will let you know your eligibility based on your income which will help

you plan out your budget To find out your eligibility please use our calculator

General Terms and Conditions of a Housing Loan Product

You are allowed to visit zoos on the condition that you do not feed the animals When youre

18 you are allowed to go for that late night party on the condition that someone drops you

home before 12 Every step we take requires condition to be fulfilled Similarly these are the

general terms amp conditions of a Home Loan For more details please refer to the individual

product

LTV Ratio will not exceed a particular percentage This percentage differs from HFI

to HFI and the components of the value of property are covered in Cost of Property

Elastic can be stretched only to a certain extent The loan tenure also will not go

beyond 20 years However HFIs do provide for different tenures with different terms

and conditions

Your EMI normally does not exceed 50 of your Gross Monthly income

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 32: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32

The total monthly payment towards all the loans you have availed of including the

present one will normally not exceed 50 of your Gross Monthly Income

Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest

from the three is chosen

Your profile is considered by the HFI before your repayment capacity is judged

If the HFI insists on a personal guarantor you need to provide one before the

disbursement of your loan

Your property should be both technically and legally clear before your loan can get

disbursed by the HFI

In case you have bought an under construction property your loan will be partly

disbursed as per the stages of construction and PEMI needs to be paid on it

The disbursement in most cases will be in the name of the builder or the seller or the

society or the development authority unless you have made some payment to them

Repayment of the loan is either via Deduction Against Salary Post Dated Cheques

standing instructions or by cash DD

You can either choose to repay the loan using the Annual rests or Monthly rests

Charges applicable to Housing Loans

The different kinds of charges applicable to Home Loans are listed below

Upfront Fees

Rate of Interest

Legal and Technical Charges

Stamp Duty and Registration Charges

Personal Guarantee from Charges

Cheque Bounce Charges

Delayed Payment Charges

Additional Charges

Incidental Charges

Prepayment Charges

PDC Swapping Charges

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 33: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33

Legal and technical charges

Some HFIs charge you for the legal and technical checks undertaken on your documents and

property by lawyers and the technical team of the HFI

Stamp duty and registration charges

If you go in for a registered mortgage these charges incurred by the HFI are passed onto

you Sometimes these charges are rather heavy depending on the State laws in the state from

where you purchase your property

Personal Guarantee form charges

A piece of paper signed does not have much value unless stamped and validated by the

concerned authority That power of attorney document that you signed with your spouse

would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently

charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the

eyes of the law

PDC swapping charges

In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a

change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for

it

Repayment capacity

Your repayment capacity is judged according to your income and your income is considered

differently if you are salaried and differently if you are self-employed Income is used to

calculate the amount of money that you will be able to shell out every month towards your

loan installment using IIR and FOIR norms FOIR calculation also takes into account the

installments of loans you are currently repaying The lower between the IIR and FOIR is

chosen as your maximum repayment capacity This is then compared to the loan amount that

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 34: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34

you have requested for and the loan eligibility as per LTV norms and the lowest of these

would be your final loan eligibility

Salaried Self-employed

Any extra income on your salary slip

(including overtime etc) is subtracted

Any non-recurring income that affects profit

(like sale of asset) is subtracted

50 of the average variable income over the

last 6 months is added

Any non-recurring expense that adversely

affects profits and was not capitalized (like

repairs and maintenance) is added

Any fixed cash or voucher payment that can

be proved is added

50 of the average depreciation of the last

two years is added

HRA that can be received and is not being

received is added

50 of the average annual income of the last

two years is added

Credit Documentation

Would you trust any Tom Dick or Harry with any matter at all We all require a certain

assurance from people before we trust them some sort of guarantee that they are trustworthy

For HFIs this guarantee rests in the form of tangible documents Credit documents are

required by all HFIs but vary in kind based on your occupation employer qualifications

experience etc Credit documents can be classified as

Income documents

Money money moneyno one can take a chance on the credibility of money matters because

at the end of the day business is business Almost everything about your loan is based on

your income and therefore proof regarding the same is required by the HFI to ensure that no

miscommunications occur

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 35: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35

Personal documents

Previously tribes and clans had passwords without which you could not enter into the

territory as proof of who he was King Solomon had a ring as identification Throughout

history proof of identity has been important as mistaken identity has never been uncommon

To prevent any such shams HFIs also require a set of documents for a general Home Loan

Product identifying who you are

He following list out all the documents needed under this line will be placed the document

sent separately as an excel sheet

Legal Documentation

We might be living in the electronic age but that doesnt take away the importance and

monopoly of paper as everything to do with law will always be on paper To stick by this

unwritten rule there are legal documents that need to be submitted by you to the HFI for

mortgaging and these differ from state to state and also depend on your property type The

following form a broad outline of the documents required and a detailed list can be found

here

Copy of the offer letter sent by the HFI accepted by you

Title documents of the property which include

-Duly registered sale agreement

-Receipts of your own contribution

-Allotment letter

-Registration receipt

-If needed land documents indicating ownership

-Possession letter

-Lease agreement if the property is bought from a development authority

-Mortgage deed if the HFI opts for a registered mortgage

No Objection Certificate from the developer society or development authority

Personal Guarantees if required

Documents for alternate or additional security

Post dated cheques for the EMIs

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 36: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36

These documents do NOT cover the entire list needed and if it is a resale property the

pertaining agreements etc will also need to be attached

Tax Benefits

Tax benefits are currently available only under Home Loans and Home Extension loans The

details are given under the respective sections

Property Insurance

Some events are not in our hands and are completely unavoidable Floods drought and

storms uproot trees and destroy the land Along with this the birds lose their homes and while

building a nest may not be that bad and the loss is not that great the money that you invest in

your cosy home might just be washed away For this reason insuring your property is a good

idea as you safeguard the asset against damage or loss Property insurance is not compulsory

though some HFIs insist on a mortgage redemption life insurance policy and you will

therefore get a reduced interest rate Some of the points that need to be noted regarding

property insurance are

You can choose the tenure of your insurance

The premium is charged up front

The longer your tenure the greater the discounts insurance companies offer you

News Letter

The Daily Market Strategy is your morning dose on the health of the markets Five intra-

day ideas unless the markets are really choppy coupled with a brief on the global markets

and any other cues which could impact the market Occasionally an investment idea from

the research team and a crisp round up of the previous days top stories Thats not all As a

subscriber to the Daily Market Strategy you even get research reports of India Infoline

research team on a priority basis

The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly

outlook coupled with the best of the web stories from India Infoline and links to important

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 37: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37

investment ideas Leader Speak and features is delivered in your inbox every Friday

evening

Portfolio Management

You get recessions You have stock market declines If you dont understand thats going to

happen then youre not ready you wont do well in the markets No need to worry We at

India Infoline would take care of all issues related to managing your hard earned money

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

created to suit the investment objectives of a client We at India Infoline 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 dont have that expertise

for day-to-day management of their equity portfolio

It is all about your money being managed by the experts while you continue with your

routine life Isnt it simple and totally hassle free

Whats more you can keep track of your dividends bonus rights issues with paperless

tracking So you always know how fast your investment is growing It basically means

assigning the right job to the right person

Research

IIFL special research cell where some of Indias finest financial analysts bring you

intensive research reports on how the stock market is faring when is the right time to

invest when to execute your order and more

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 38: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38

IIFL make sure that investors are always prepared to make own investment decision when

the opportunity arises

IIFL bring you intensive research reports - whether sectoral or company-wise or more - that

tell you exactly when and where to invest So whenever there is an exciting investment

opportunity you are in the know and always ready to invest Research reports IIFL will help

you choose your investments wisely without wasting time Presented in a lucid and easy-to-

understand format these reports help you make informed decisions

ASSET MANAGEMENT

India Infoline is a leading pan-India mutual fund distribution house associated with leading

asset management companies It operates primarily in the retail segment leveraging its

existing distribution network to reach prospective clients It has received the in-principle

approval to set up a mutual fund

The group recently commenced its offshore asset management business under the lsquoIIFL

Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary

Authority of Singapore to carry out global asset management operations The Singapore arm

can now offer broking asset management and investment banking services

IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused

equity products fund management and advisory services for offshore and domestic wealth

management customers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 39: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39

MILESTONES ACHIEVED

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 archivesindiainfolinecom

mobilised 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 lsquoBest of

the Webrsquo and lsquomust read for investorsrsquo

2004

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 lsquoMoneylinersquo brand

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 40: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40

2008

Launched wealth management services under the lsquoIIFL Wealthrsquo 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 lsquoBest broker-

Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney

2009

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

received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp

Bradstreet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 41: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41

MARKET SHARES OF COMPANY

Retail broking

IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda

for e-broking

Institutional broking

IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in

Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs

head of research in India and Vasudev Jagannath CLSAs head of sales in India

While Parajia will join as head of institutional sales at India Infoline Dange will be

head of research and Nemkumar head of investment banking

Each one of them is bringing in more than 10 years of experience with a

top institutional brokerage in Asia The CLSA foursome will also pick up stakes in

India Infoline through the preferential allotment route Their collective stake would

add up to around 15 Parajia already holds a 288 stake in India Infoline He will

subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another

25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants

each The preferential allotment includes the four men buying 90 lakh equity warrants

at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus

The remaining will be payable at the end of eighteen months when the warrants will

be convertible into sharesThat is all these guys will have to cough up about Rs 360

crore to convert their warrants into shares Currently the companys institutional

equities team has 35 people including research analysts and dealers

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 42: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42

Consumer Finance

During the quarter it managed a book size of Rs 25 crore and has suffered a loss of

Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans

and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding

for its consumer finance subsidiary It intends to leverage its extensive branch

network to expand its consumer finance division to tier-II and tier-III cities in the

coming quarters IndiaInfoline is going slow as it has just started this business with a

robust risk management system The company has roped in experts from Citi

Financial and other banks

Ticker 532636

Exchanges BOM

2009 Sales 9630900000

Major

Industry

Financial

Sub

Industry

Securities

Brokerage

Country INDIA

Employees 14105

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 43: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43

CHALLENGES FACES BY INDIAINFOLINE

Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad

and New Delhi accounting for major bulk of the trading

Competition related - due to high brand proliferation the market from a consumer standpoint

has become ldquocommoditizedrdquo given product parity in terms of offerings

Brand related - challenge being to maintain high decibel and impactful communication on a

sustained basis

Key executives

SNo Name Designation

1 Mr Nirmal Jain Chairman and Managing director

2 Mr A K Purwar Director

3 Mr R Venkataraman Executive Director

4 Mr Nilesh Vikamsey Independent Director

5 Mr Kranti Sinha Independent Director

6 Mr Sat Pal Khattar Non Executive Director

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 44: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44

MARKETING STRATEGY OF INDIA

INFOLINE

Market Positioning

Market positioning statements of India Infoline are ldquoAt India Infoline we give you

single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the

consumers who prefer almost all investment activities at same place by providing number of

various financial services At India Infoline a person can purchase or sell shares debentures

etc and at the same place also demat it India Infoline also provides other investment option

to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc

and help the person in designing his portfolio By this way India Infoline provides comfort to

its customers

Target Market

India Infoline uses demographic segmentation strategy and segment people based on

their occupation India Infoline uses selective specialization strategy for market targeting

Target person for the India Infoline Stock Broking and India Infoline Investment Service are

persons who can work as sub-broker for the companies Companies focus on Advisors of

Insurance and post office Tax consultants and CAs for making sub-broker

Marketing channel System

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 45: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45

India Infoline uses one level marketing channel for investment product distribution

Sub-brokers work as intermediary between consumer and company Company has both

forward and backward flow of activity through channel Company distributes stationery

brokerage and information forward to its sub-broker The sub-brokers send filled forms

queries amount of investment etc back to the company

Training Channel Members

India Infoline provides training to the sub-brokers because they will be viewed as the

company by the investors The executives of India Infoline explain various new schemes of

investment to the sub-brokers with its objective risk factors and expected return Company

also periodically arrange seminar to guide sub-brokers

Advertising and Promotion

The objective of advertising of India Infoline is to create awareness about services of

India Infoline among investors and sub-brokers

India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo

HUMAN RESOURCES

The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner

Mindsetrdquo We believe that the key to our continued growth lies in unleashing the

entrepreneurial energy of our employees We encourage all employees to behave more as

51owners of their departments rather than employees Our people are highly driven and work

towards increasing India Infolinersquos brand and market share across product lines

We have developed extensive in-house training modules In addition our staff is trained by

various Asset Management Companies and ICICI Prudential Life Insurance Company

Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person

mentors a junior executive

In addition to salary our employees get performance-based incentives on a quarterly basis

We have also implemented an Employee Stock Option Plan

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 46: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46

As on December 31 2009 the total employee strength of our company and our subsidiaries

was 1200

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 47: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47

RESEARCH METHODOLOGY

i) Objective of the Study

To know percentage of people invest in mutual fund insurance equity and other

financial products and services

To know future prospects of their investment in the financial products and

services

ii) Data Collection

Primary data-

Primary data are data freshly gathered for a specific purpose The various sources of

primary data for my project are as follows

Banks

Local residents

People from industries

Mall

Small Retailers

Secondary Data-

Secondary data provide a starting point for research and offer the valuable source of

information

The secondary data was the most important source for my project because it gave us

information about company profile competitors market scenario market share etc

It also give us information of the financial industry its emergenceamp its importance in

country progress

We used secondary data for following sources

Internet

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 48: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48

Indiainfoline brochure

FUNDAMENTAL RESEARCH SERVICES

The Sunday Weekly Report

This weekly report is the ace of all reports It offers a comprehensive market

overview and likely trends in the week ahead It also presents few top picks based on

an in-depth analysis of technical and fundamental factors It gives short term and

long term outlook on these scriprsquos their price targets and trading strategies Another

unique feature of this report is that it provides an updated view of about 70 prominent

stocks on an ongoing basis

The Industry Watch

This report provides an in-depth analysis of specific industries which are

likely to outperform others in the economy It analyzes their strengths and

weaknesses and ascertains their future outlook The final view is arrived at after

thorough interaction with industry experts Also comparative performances of

various companies in the sector are evaluated and top picks are recommended

Stock Analysis

Indiainfoline stock research has performed very well over the past few years

and the Indiainfoline Model Portfolio has consistently outperformed the benchmark

indices The fundamentals of select scrips are thoroughly analyzed and an actionable

advice is provided along with investment rationale for each scrip

Flash News

Key developments and significant news announcements that are likely to have

an impact on markets scrips are flashed live on trading terminals Flash news keeps

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 49: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49

the market participants updated on an online basis and helps them to reshuffle on their

holdings

TECHNICAL RESEARCH SERVICE

Nifty Tracker

Nifty Futures is the most traded instrument with highest volumes in F amp O and

excellent liquidity The team tracks the Nifty Future and generates calls based on

unique trading system which is a result of their focused research over the past few

years The objective is to generate positive returns for traders who are looking for a

high risk high reward product

Online Chart

An online forum to help clients specifically day traders in judging the

directions of the market and stocks which are in the limelight

Intraday Calls

For day traders indiainfoline provides intra-day calls with entry exit and stop

loss levels during market hours These calls are flashed on their terminals Their

analysts continuously track the calls and provide recommendations according to the

market movements

Position Calls

Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the

price movement in select scriprsquos These calls are for a 10-15 day time span with stop

loss and target levels These calls are flashed on their terminals during market hours

Derivative Strategies

Their analysts take view on the Nifty and select stocks based on the

derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised

which are flashed on their terminals and published in their reports

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 50: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50

Futures Calls

A customized product for HNIs to help them trade with leveraged position

wherein clients are advised on the stocks with entry exit and stop loss level for short

term benefits Over and above this financial status of the calls is monitored at all

times

OTHER ADVATAGES

Advancements in Internet and Internet-based trading have transformed the way firms

operate in the broking industry We recognize that technology is an important tool for

broking operations

We believe that online trading will gain market share due to significant advantages that it

offers

It enables the customer to trade directly without any agent intervention

It offers customers the convenience of trading from almost anywhere

It enables rapid dissemination of information and at reduced costs

It offers a responsive mechanism for reporting grievances problems and bugs

The IndiaInfoline Group have invested in technology and ensured that we have an

optimum infrastructure to handle the load Our current technology infrastructure comprises

several high ends Dell HP IBM servers running on Microsoft Operating System Most of

these servers support online customers for trading activities and users for the

wwwindiainfolinecom and www5paisacom websites

The IndiaInfoline Grouprsquos main trading servers (application and database servers) are

located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance

Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another

ISP All the three ISPs and our Goregaon office are equipped with latest servers and

uninterruptible power supply systems The Goregaon office is connected to the internet by

optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps

expandable to 20Mbps Our connectivity between the internal and external servers is through

this fiber connection

Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us

with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating

some servers with Reliance Infocom we have further increased our redundancy

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 51: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51

The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic

All our servers routers and desktops are behind this firewall All connections to our trading

servers happen in a secure manner using 128 bit encryption We have a security certification

from Thawte

The key components of our technology infrastructure include

- Online trading software

- Surveillance and risk management

- Client administration

- Back office software

- Communication links and VSAT network

- Networking and hardware

- Security

SWOT Analysis

Strengths

bull Integrated technology platform

bull ldquoOne Stoprdquo shop

bull Pan - India distribution network

bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands

Weaknesses

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

bull Insignificant presence in institutional Segment

Opportunities

bull Changing demographics with higher disposable income and increasingly complex financial

instruments will drive demand for investment advisory services

bull Rapid penetration of Internet and computers means that technology enabled financial

services will gain market share

Threats

bull Economic slowdown

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 52: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52

bull Volatile movement in indices events like May 17 2004

bull Stock markets falls will have a cascading effect on our mutual fund mobilization

bull Increasedecrease in interest rate can affect our debt income fund mobilizations

bull Future changes in personal taxation rules can impact insurance sales

bull Increasing competition from large and particularly foreign players

PORTERrsquoS FIVE FORCE MODEL

Competitive Force - Michael Porter has identified five forces that determine the intrinsic

long-run profit attractiveness of a market or market segment

Industry competitors

Potential entrants

Substitutes

Buyers

Suppliers

Intensity of Competition

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones

becoming either franchisees for the larger brokers or closing operations

Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail

brokerage industry

Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for

internet as compared to approaching the brokers

Threat of New Entrants Entry of Foreign Players

New forms of trading including T+2 settlement system dematerialization etc are

strengthening the retail brokerage market and attracting foreign companies to enter the Indian

industryThreat of Substitutes

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 53: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53

Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices

etc act as substitutes to retail broking products and services

Buyer Power Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial sector that calls them

to approach the broking houses

Low Product Differentiation Proves Beneficial

The retail broking services provided by the various companies are homogeneous with very

low product differentiation This allows customers to enjoy a greater bargaining power

Supplier Power

Increased Dependence on IPOs

There is a growing dependence of corporate on broking houses with the rising number of

IPOrsquos coming to the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 54: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 55: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55

Financial Performance

Year 2007-08 List Revenue Profit before

interest

depreciation and

tax

Profit after tax

Indiainfoline Ltd 67244 27725 12869

India Infoline

Investment

Services Ltd

15221 12089 3155

Moneyline Credit

Ltd

1132 194 207

India Infoline

Distribution

Company Ltd

184 713 560

India Infoline

Marketing

Services Ltd

4050 1297 753

India Infoline

Insurance

Services Ltd

6881 42 417

India Infoline

Commodities Ltd

1701 147 83

India Infoline

Media and

Research Services

Ltd

8238 981 630

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 56: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56

Other subsidiaries

969 624 512

Inter-company

adjustments

3261 1692 425

Aggregate

102359 40222 16393

This is the tabel represents the Revenue profit before interest depreciation and

tax in each and every segement of IndiaInfoline and profit after tax in each and

every segment If we see this table we will find that the total revenu for 2008-09

was 102359 and 40222 is his profit before interest depreciation and tax which

is

40222 100 =393

102359

And if we calculate the profit on total revenue it will be

16393 100 =1601

102359

And if we calculate the total Interest depreciation and tax they will be

40222-16393=23829

Rs Mn

Lists 2007-08 2007-06

Gross Income 67244 28672

Profit before interest depreciation and

taxation

27725 9834

Interest and financial charges

2116 639

Depreciation

1944 1233

Profit before tax

23665 7962

Taxation - Current

7934 2607

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 57: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57

- Deferred

203 24

- Fringe benefit tax

109 119

- Short or excess provision of income-tax

53 00

Net profit for the year

15772 5212

Less Extraordinary items (Net of tax)

2904 00

Less Appropriations

Dividend

Interim dividend

00 1496

Proposed final dividend

3426 00

Dividend distribution tax

582 210

Transfer to general reserves

1310 530

Add Balance brought forward from

previous year

4741 835

Add Other adjustments (profits of India

Infoline Securities Private Limited added

pursuant to merger)

00

930

Balance to be carried forward

12291 4741

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 58: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58

Profit amp Loss account of India Infoline

------------------- in Rs Cr -------------------

2009 2008

INCOME

Sales Turnover 54227 61611

Excise Duty 000 000

Net Sales 54227 61611

Other Income 2934 2729

Stock Adjustments 000 000

Total Income 57161 64361

EXPENDITURE

Raw Materials 000 000

Power amp fuel Cost 000 000

Employee Cost 13691 12879

Other Manufacturing Expenses 9332 10593

Selling amp Admin Expense 11216 11913

Miscellaneous Expense 4103 3967

Preoperative Exp Capitalists 000 000

Total Expenses 38342 39342

OPERATING PROFIT 15885 22259

PBDIT 18819 24988

Interest 1115 2282

PBDT 17704 22704

Depreciation 2556 1944

Other Written Off 000 000

Profit Before Tax 15148 20762

Extra Ordinary Items 223 -053

PBT(post extra-ord items) 15371 20709

Tax 4788 7839

Reported Net Profit 10583 15773

Total value Addition 38342 39353

Preferred Dividend 000 000

Equity Dividend 7945 3436

Corporate Dividend Tax 1350 582

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 59: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59

Per Share Data

Share in Issue(in Lakhs) 283400 57103

Earning Par Share(Rs) 373 2762

Equity Dividend () 14000 6000

Book Value(Rs) 3658 17335

This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see

that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is

an impact of recession

The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of

the previous year or 72 cr

In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393

to 383 which is around 3 In this the total is decreased instead of increase in employee cost

and Miscellaneous Expense to gain the better profit

Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08

to 2008-09

Report net profit is decreased from 15773 to 10583

Share in issued has increase from 57103 to 283400

Earning per share has come down from 2762 to 373 which is 90

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 60: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60

Balance Sheet in Cr

2009 2008

Sources of funds

Share capital 5668 5710

Reserve amp surplus 98013 93275

Equity share warrants 1137 5977

Net worth 104818 104062

Loan funds

Secured loan 170 -

Unsecured loan 0010 13056

Total Liability 104998 118019

Application funds

Fixed asset(including intangibles)

Gross block 14367 9831

Less accumulated depreciation and

amortization

4494 3507

Net block 9873 6372

Capital work in

progress

451 0049

10324 6373

Investment 87371 91568

Currents asset loan

and advance

Sundry debtors 10352 34281

Cash amp bank balance 26410 06162

Stock on hand 16672 15406

Loan amp advance 24441 31389

77875 87238

Less current liabilities amp

provision

Current liabilities 55268 51485

Provisions 14864 15674

Total 70131 67159

Net current assets 7743 20079

Total of Assets 104998 118019

This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08

and 2008-09

In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which

is all the impact of recession not only on this broking firm on all others too the same impact

was their in this period their is a cost cutting and reduction on other expenses

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 61: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61

The biggest of this can be seen on the liability side on unsecured loans which has come down

from 13057 to 0010 which is more then 99 organization has increased his cash from

6162 to 26410 for the period of 2008-09 as compare to 2007-08

COMPETITORS (ACCORDING TO VOLUME)

LAST

PRICE

MARKET

CAP(Rscr)

SALES

TURNOVER

NET

PROFIT

TOTAL

ASSET

INDIABULLS 13520 418809 200309 99451 1472236

INDIA INFOLINE 14130 400444 57157 10359 104999

EDELWEISS CAP 47000 352520 19139 2639 186528

MOTILAL OSWAL F 17080 244358 5726 4531 43349

HSBC INVEST 26400 184368 2431 -1521 66745

FUTURECAPITAL 23050 146432 13244 931 121675

NETWORK 18 9020 86507 9450 -1941 86211

GEOIIT BNP 3780 84703 14056 1439 27606

DELTA CORP 4330 72381 4273 831 35687

NALWASONS INV 121000 62148 1478 1126 27090

This table represent the comparision between the indiainfoline and other share broking firms

or inverstment organisation which includes last price of share market capital sales turnover

net profit and total assets

This graph shows thr last share price of the organisation in this we can see that Nalwasons

investment has the highest share price as compare to others it is very high The indiainfoline

stand very short in this

0

200

400

600

800

1000

1200

1400

Last Price

Series 1

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 62: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62

When it comes to market capital the Indiabulls has the highest market capital and second is

Indiainfoline just behind of Indiabulls and rest other are no ware in this graph

When we talk about sales turnover of the broking firm or investment organisation again the

indiabulls has the hight sales turnover as compare to other its very high other stand no ware

infront of him but still indiainfoline manages second position

0500

10001500200025003000350040004500

Market capital

Market capital

0

500

1000

1500

2000

2500

SALES TURNOVER

SALES TURNOVER

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 63: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63

The profit is the main aim of each and every organsation In other factore indiabulls is ahead

of all and indiainfoline but here indiainfoline beats all others including indiabulls

Indiainfolinersquos profit is just ahead of indiabulls

There are two vacent place which indicates no profit but it is not like that here it means loss

both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively

From this table the coloum of indiabulls has been removes just me make this take appropriate

and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN

GRAPH) where as the total of all others is 6996 only

But finally we can conclude that the Indiainfoline has manage to get the highest net profit

among all his competitors

0

20

40

60

80

100

120

NET PROFIT

NET PROFIT

0200400600800

100012001400160018002000

TOTAL ASSETS

TOTAL ASSETS

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 64: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64

PERFORMANCE HIGHLIGHT IN 2008-09

Business Division Business Highlights

Broking

Market share of equities increase from

34 in 2007-08 to 376 in 2008-09

Customer base for retail equities

increased 358 from 44 ml in 2007-

08 to 06 ml in 2008-09

Published in-depth and thematic

reports on INCH politics rural India

infrastructure self commodities

utilities and India worming

Insurance

Receive Insurance Broking License

Forged alliances with major insurance

companies for the distribution of life

and nonlife products

Alter the product mix in favor of

traditional products like Endowment

Products

Credit and Finance

Proactively suspended personal loans

and mortgages business from

September 2008 while the personal

loan business is still suspended the

mortgages business has been Re-

Started

Revenue at Rs26541 ml in 2008-09

against Rs19375 ml in 2007-08

Registered the Housing Finance

Subsidiary with NHB

Wealth and asset Management Introduce the family office platform

Raised around Rs18 bl in the largest

single day debenture listing of its

kind

Received in principle approval for

sitting up of Mutual Funds

Establish the infrastructure and

knowledge capital for Office Store

Asset Management Services

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 65: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65

Highlights 2008-09 Industry optimism Wealth management

bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind

bull Built relationships with many reputed families across India and the globe

Asset management

bull Received the in-principle approval from SEBI to sponsor a Mutual fund

bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to

carry out corporate advisory and dealing in securities The Singapore arm can now offer

broking asset management and investment banking services

bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in

India

bull Setup a team of experienced professionals for the offshoreasset management business

Key Takeaways from India Infoline concall

India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited

and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to

Adani Power IPO in July 2009

The first premium mobilization from insurance broking business stood at Rs 410

million

The net NPA on the books continue to remain less than 1

Its core business improved significantly

Its market share remains same at 36

Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225

billion in the previous quarter

The companys customer base improved to 33

Its financial income grew by 487

Its employee cost was of Rs 736 million

Administrator cost grew by 28 at Rs 507 million QoQ

Depreciation coat stood at Rs 1315 million

Interest coat was of Rs 155 million

Its advertisement cost was of Rs 24 million

Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 66: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 67: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67

FINDINGS

Brokerage of India infoline is higher than Others broking firms like ReligareMotilal

OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery

where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery

Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal

Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum

margin money should be 50002555 rs

Exposure is less than other firms India Infoline offers eight times exposure on margin

where as Religare and Indiabulls offer twenty times exposure on margin money

HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac

trading ac bank ac) but India infoline provide only De-mat ac and Trading ac

Religare takes Rs299 for lifetime services where as India infoline takes Rs555

Relationship manager changes many times it creates problem for the offline customers

Securities are not so much reliable

India Infoline has hidden charges Customer are not much aware about that

Customer satisfaction of India infoline not so good

Most of the customers are trading offline

Most of the customers approach towards the broking firm is through the relationship

manager

Most of the people are not much aware of share market and its benefit

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 68: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68

Recommendation To increase awareness about Share Market and the name India Infoline itself the

company should organize campaign The campaign can be weakly monthly yearly it

will give a good result to the company to capture market in the competitive position

The company should reduce the margin money It can help to acquire more

customers if the firms bring plans for no boundation of margin money

The Company should increase their focus on the less margin money customers also It

can help to make more customers of low margin money which can increase the

revenue of the firm The Relationship managers focus only to the high margin money

customer because from them they will get high brokerage that should not be happened

from the less margin money customer

Transaction error should be avoided Transaction should be done properly taking in

consideration that it is one of the most required quality of a firm Wrong transaction

or default transaction may lead the prestige of the company to be down

Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as

0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0

05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin

money customer not for less margin money customer

The Company should increase Exposure It is the good tool to capture the market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 69: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69

CONCLUSION

I am much thankful to india infoline for providing me the opportunity for doing training

programme in the organization as management trainee While doing my sip in the reputed

broking firm India infoline I had got a chance for knowing and analyzing the share market I

was also able to know about the business environment and business ethics of the business

world I also came to know about what does a firm or an organization require or wants from a

employee or a trainee From the survey I found that India infoline is in the top three position

in the share market

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline

Page 70: India Infoline Project Report

ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70

BIBLIOGRAPHY

Websites-

wwwindiainfolinecom

www5paisacom

wwwnsecom

wwwmoneycontrolcom

Book source-

Financial management

- Khan amp Jain

Principal of financial management

-Prassana Chandra

Business Environment

- Francis Cherunilam

Annual report of indiainfoline