Internship Document

8/8/2019 Internship Document

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GENERAL STUDY ABOUT INDIA INFOLINE PVT LTD

INTERNSHIP REPORT

Submitted by

SIVAPRAKASH NARAYANAN M

9utb31

In partial fulfillment of the requirements of

University of Toledo

For the award of the degree of

Master of Business Administration

DECEMBER 2010


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CERTIFICATE

This is to certify that the internship titled

GENEREAL STUDY ABOUT INDIA INFOLINE PVT LTD

is a bonafide work done by

SIVAPRAKASH NARAYANAN M

9utb31

for the award of degree of

Master of Business Administration

__________________ ________________

[Name of the Director) [Name of the Guide]

Head of the Institute Faculty Guide

Submitted for the Viva-Voce examination held on ________________________

________________________ ________________

(Signature of Examiner with date) (Signature of Examiner with

date)


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CHAPTER 1

INDUSTRY PROFILE

1.1 Theoretical background of the study

1.1.1 Stock Exchange

The stock exchange or secondary market is a highly organized market for the

purchase and sale of second hand quoted of listed securities. The securities contracts

(regulation) Act 1956 defines a stock exchange as an association, organization or not,

established for the purpose of assisting, regulating and controlling business in buying,

selling and dealing in securities.

In a primary market, the Stock Exchange will arise with investment banks and

businesses that are looking to raise capital by selling shares. This process involves the

business being 'listed' on the Stock Exchange or 'floating'. In this case, the business will

effectively get its capital through the initial sale of its shares.

All the modern service institutions, stock exchange plays a crucial agents and

facilitators of entrepreneurial progress. After the industrial resolution, as the size of the

business enterprises grew, it was no longer possible for individual person or even

partnership to raise such a huge amount for undertaking these ventures. Such huge

requirements of capital can be met only number of individuals.

These investors could be expected to participate actively only if investment is

liquid or they could sell a part of their stake whenever they wish to generate cash. This

liquidity can be achieved through shares and debentures representing smallest units of


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ownership and lending represented by the public. The institution where these securities

are traded is known as stock exchange. This stock exchange is one of the most

important institutions in the capital market.

IPO

An initial public offering, or IPO, is the first sale of stock by a company to the

public. A company can raise money by issuing either debt or equity. If the company has

never issued equity to the public, it's known as an IPO.

FPO

The public offering (FPO) is when an already listed company makes either a

fresh issue of securities to the public or an offer for sale to the public, through an

offer document. An offer for sale in such scenario is allowed only if it is made to

satisfy listing or continuous listing obligations.

1.1.2 BOMBAY STOCK EXCHANGE (BSE)

Bombay Stock Exchange Sensitive Index has the common name i.e. Sensex.

Bombay Stock Exchange comprises of the most actively traded and 30 largest stocks,

which are representatives of various stocks in BSE. The most popular and precise

barometer of the Indian stock markets is SENSEX. It is being considered as oldest

stock market index, which is currently in use.


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On April 1, 1979, the base value of the Sensex is 100.At irregular intervals, the

Bombay Stock Exchange (BSE) authorities review and modify its composition to make

sure it reflects current market conditions.

1.1.3 SENSEX

The SENSEX, short form of the BSE-Sensitive Index, is a Market Capitalization-

Weighted index of 30 stocks representing a sample of large, well-established and

financially sound companies. It is the oldest index in India and has acquired a unique

place in the collective consciousness of investors. The index is widely used to measure

the performance of the Indian stock markets. SENSEX is considered to be the pulse of

the Indian stock markets as it represents the underlying universe of listed stocks at The

Stock Exchange, Mumbai. Further, as the oldest index of the Indian Stock market, it

provides time series data over a fairly long period of time (since 1978-79).

1.1.4 LISTING OF SECURITIES IN BSE SENSEX

SENSEX is calculated using a "Market Capitalization-Weighted" methodology. As

per this methodology, the level of index at any point of time reflects the total market

value of 30 component stocks relative to a base period. (The market capitalization of a

company is determined by multiplying the price of its stock by the number of shares

issued by the company). An index of a set of combined variables (such as price and

number of shares) is commonly referred as a 'Composite Index' by statisticians. A single

indexed number is used to represent the results of this calculation in order to make the

value easier to work with and track over time. It is much easier to graph a chart based

on indexed values than one based on actual values. The base period of SENSEX is


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1978-79. The actual total market value of the stocks in the Index during the base period

has been set equal to an indexed value of 100. This is often indicated by the notation

1978-79=100. The formula used to calculate the Index is fairly straightforward.

However, the calculation of the adjustments to the Index (commonly called Index

maintenance) is more complex.

Companies interested in listing their shares on the Exchange are required to

comply with the following conditions, subject to Article (39) of the Exchange's Internal

Regulations:

y The company must comply with the Commercial Companies Law No. 21 of 2001.

y The company should have been in existence for at least two years, and be able

to supply published, audited financial statements for the two consecutive years

prior to the submission date of the application.

y The paid-up capital of the company must not be less than BD 500,000, or the

equivalent in any other currency, and the issued shares must not be less than

500,000 shares. At least 50% of the value of the issued shares must be paid-up.

y The number of registered shareholders in the company should not be less than

100.

y The rights and obligations of each class within each listed issue should be equal.

y The net worth (assets) of the company should exceed its paid-up capital by at

least 20%.


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y The total annual sales (turnover) should not be less than BD 500,000.

India, after United States hosts the largest number of listed companies. Global

investors now ardently seek India as their preferred location for investment. Once

viewed with skepticism, stock market now appeals to middle class Indians also. Many

Indians working in foreign countries now divert their savings to stocks. This recent

phenomenon is the result of opening up of online trading and diminished interest rates

from banks. The stockbrokers based in India are opening offices in different countries

mainly to cater the needs of Non Resident Indians. The time factor also works for the

NRIs. They can buy or sell stock online after returning from their work places.

1.1.5 MARKET CAPITALIZATION

Worth of the company in terms of its shares is called market capitalization.

Current value of share price needs to be multiplied by number of shares issued by the

company for the calculation of market capitalization. The company can be either mid-

capitalization, large-capitalization and small- capitalization based on the value of

market capitalization.


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COMPANY PROFILE

INDIA INFOLINE

1.2 History of the organization

India Infoline was founded in 1995 by Mr. Nirmal Jain (Chairman and

Managing Director) as an independent business research and information provider.

They gradually evolved into a one-stop financial services solutions provider. Their

strong management team comprises competent and dedicated professionals

They are a pan-India financial services organization across 1,361 business

locations and a presence in 428 cities. The global footprint extends across geographies

with offices in New York, Singapore and Dubai. The company is listed on the Bombay

Stock Exchange (BSE) and the National Stock Exchange (NSE).

They 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.

The company is registered with the BSE and the NSE for securities trading,

MCX, NCDEX and DGCX for commodities trading, CDSL and NSDL as depository

participants. They are registered as a Category I merchant banker and are a SEBI

registered portfolio manager. They also received the FII license in IIFL Inc. IIFL

Securities Pvt Ltd received approval from the Monetary Authority of Singapore to carry

out corporate advisory and dealing in securities operations. Two subsidiaries India

Infoline Investment Services and Money line Credit Limited are registered with RBI as


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non-deposit taking non-banking financial services companies. India Infoline Housing

Finance Ltd, the housing finance arm, is registered with the National Housing Bank.

In India Infoline the share broking commission as From 0.03% to 0.05%.Indias Top Ten

broking house as,

1.ICICI direct.com

2. India Infoline

3. Kotak Securities Ltd.

4. Share Khan

5. India bulls

6. Motilal Oswal

7. Bajaj Capital

8. SMC

9. Angel Broking

10. Reliance Money.

1.2.1 Management

Mr. Nirmal Jain Chairman & Managing director of India Infoline Ltd. Nirmal Jain,

MBA (IIM, Ahmedabad) and a Chartered and Cost Accountant, founded Indias leading

financial services company India Infoline Ltd. in 1995, providing globally acclaimed

financial services in equities and commodities broking, life insurance and mutual funds

distribution, among others. Mr. Jain began his career in 1989 with Hindustan Levers

commodity export business, contributing tremendously to its growth. He was also

associated with Inquire-Indian Equity Research, which he co-founded in 1994 to set


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new standards in equity research in India.

Mr. R. Venkataraman Executive Director of India Infoline Ltd. co-promoter and

Executive Director of India Infoline Ltd, is a B. Tech (Electronics and Electrical

Communications Engineering, IIT Kharagpur) and an MBA (IIM Bangalore). He joined

the India Infoline board in July 1999. He previously held senior managerial positions in

ICICI Limited, including ICICI Securities Limited, their investment banking joint venture

with J P Morgan of USA and with BZW and Taib Capital Corporation Limited. He was

also Assistant Vice President with G E Capital Services India Limited in their private

equity division, possessing a varied experience of more than 16 years in the financial

services sector.

1.2.2 Board of directors:

India Infoline boards of directors are Mr. Nilesh Vikamsey, Mr. Sat Pal Khattar,

Mr. Kranti Sinha, and Mr. Arun K. Purvar.

Mr. Nilesh Vikamsey Independent Director in India Infoline Ltd. Mr. Vikamsey,

Board member since February 2005 - a practising Chartered Accountant and partner

(Khimji Kunverji & Co., Chartered Accountants), a member firm of HLB International,

headed the audit department till 1990 and thereafter also handles financial services,

consultancy, investigations, mergers and acquisitions, valuations etc; an ICAI study

group member for Proposed Accounting Standard 30 on Financial Instruments

Recognition and Management, Finance Committee of The Chamber of Tax Consultants

(CTC), Law Review, Reforms and Rationalization Committee and Infotainment and

Media Committee of Indian Merchants Chamber (IMC) and Insurance Committee and


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Legal Affairs Committee of Bombay Chamber of Commerce and Industry (BCCI).

Mr. Sat Pal Khattar Non Executive Director of India Infoline Ltd. Mr. Sat Pal

Khattar, - Board member since April 2001 - Presidential Council of Minority Rights

member, Chairman of the Board of Trustee of Singapore Business Federation, is also a

life trustee of SINDA, a nonprofit body, helping the under-privileged Indians in

Singapore. He joined the India Infoline board in April 2001. Mr. Khattar is a Director of

public and private companies in Singapore, India and Hong Kong; Chairman of

Guocoland Limited listed in Singapore and its parent Guoco Group Ltd listed in Hong

Kong, a leading property company of Singapore, China and Malaysia. A Board member

of India Infoline Ltd, Gateway Distriparks Ltd both listed and a number of other

companies he is also the Chairman of the Khattar Holding Group of Companies with

investments in Singapore, India, UK and across the world.

Mr. Kranti Sinha Independent Director in India Infoline Ltd. Board member

since January 2005 completed his masters from the Agra University and started his

career as a Class I officer with Life Insurance Corporation of India. He served as the

Director and Chief Executive of LIC Housing Finance Limited from August 1998 to

December 2002 and concurrently as the Managing Director of LICHFL Care Homes (a

wholly owned subsidiary of LIC Housing Finance Limited). He retired from the

permanent cadre of the Executive Director of LIC; served as the Deputy President of the

Governing Council of Insurance Institute of India and as a member of the Governing

Council of National Insurance Academy, Pune apart from various other such bodies. Mr.

Sinha is also on the Board of Directors of Hindustan Motors Limited, Larsen & Toubro


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Limited, LICHFL Care Homes Limited, Gremach Infrastructure Equipments and Projects

Limited and Cinemax (India) Limited.

Mr. Arun K. Purvar Independent Director in India Infoline Ltd. Board member

since March 2008 completed his Masters degree in commerce from Allahabad

University in 1966 and a diploma in Business Administration in 1967. Mr. Purwar joined

the State Bank of India as a probationary officer in 1968, where he held several

important and critical positions in retail, corporate and international banking, covering

almost the entire range of commercial banking operations in his illustrious career. He

also played a key role in co-coordinating the work for the Bank's entry into the field of

insurance. After retiring from the Bank at end May 2006, Mr. Purwar is now working as

Member of Board of Governors of IIM-Lucknow, joined IIMIndore as a visiting

professor, joined as a Hon.-Professor in NMIMS and he is also a member of Advisory

Board for Institute of Indian Economic Studies (IIES), Waseda University, Tokyo, Japan.

He has now taken over as Chairman of India Venture Advisors Pvt. Ltd., as well as IL &

FS Renewable Energy Limited. He is also working as Independent Director in leading

companies in Telecom, Steel, Textiles, Auto parts, Engineering and Consultancy.


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1.2.3 Organization Structure

Trainee

Sales

Executive 4

Sales

Executive 2

Sales

Executive 3

Sales

Executive 1

Sales Executives

Branch Head

Regional Head

Country Head

Cluster Head

CEO

City Sales Manager

Dealers


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1.2.4 Product Profile and Market Potential

y Portfolio Management services.

y Structured Products.

y Mutual funds Advisory.

y Insurance Advisory.

y Bullion Trading.

y IPO Funding.

y Loan against Securities (Margin funding)

y Commodities.

Market Potential

y India Infoline Media and Research Services Limited.

y India Infoline Commodities Limited.

y India Infoline Marketing & Services.

y India Infoline Investment Services Limited.

y IIFL (Asia) Pvt Limited.

1.2.5 Competitive Strength of the company

The main competitors of India Infoline is

HDFC security Ltd.

Motilal oswal security Ltd.

Share Khan.

India bulls.

Kotak securities.


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India Infoline is a one-stop financial services shop, most respected for quality of

its advice, personalized service and cutting-edge technology.

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 made it possible for clients to view transaction

costs and ledger updates in real time.

The portfolio Management service is a product where in equity investment

portfolio is created to suit the investment objectives of a client who cannot afford to give

time or dont have the expertise for day-to-day management of their equity portfolio. In

India Infoline there is a separate research department, which analyzes the fluctuation of

share values of different companies and inform to their investors.

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).

India Infoline has made investing in Mutual Funds and Primary market so

effortless. All you have to do is register with India Infoline and thats all. No paperwork

no queues and no Registration charges.


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TABLE: Comparison of India Infoline with their competitors

Particulars India Infoline ICICI- Direct Share KhanReliance-Money

(In Rs.)

INITIAL Charges555 975 750 750

INITIAL Margin 2000 5000 5000500

(a/c access fee)

AMC NIL500

(after1 year)

300

(after1 year)

500

(after1 year)

BROKERAGE .05%

.50%

.075%

.75%

.10%

.50%

.10%

.50%

F&O

SEGMENT.05/LOT N.A N.A N.A

N.A- Not Applicable Source: 5 paisa.com


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CHAPTER.2

METHODOLOGY

2.1. Objective of the study:

To know and get some practical exposure towards share trading.

To know about the research and analysis undertaken by brokerage firms in

guiding the investors.

To analyze the functioning of share trading firm

To know about the factors influencing various sectors in the market.

To know about all the cumbersome procedures involved in buying and selling of

shares.

2.2. Time Period of the study:

The time period of the study was 40 days from October 20 to November 30.

2.3. Source of Data:

The data collected was primary data as I gathered all information by my own.


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Chapter 3

Description of the Functions of the Department

MARKETING

In the marketing department, the main role is to identify the new clients and to

promote the products and features of the organization and make them to invest in

different sectors.

FINANCE

In India Infoline, there are more than 1500 customers in the branch in finance

department their main role is to update and maintain the transactions of the customers

and miscellaneous expenditure of the organization.

HUMAN RESOURCE

A human resource department plays a vital role in the organization, to recruit the

employees and train them to identify the new client, and satisfying the need of the

existing customer, and motivate the employees in the organization to achieve the goals.

BACK OFFICE

Clients can log-in, using User Id and Password, to view a summary of their;

Ledger balances,

Deposits in the form of cash maintained

Deposits in the form of securities maintained


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Future Plans

Private equity

They assist companies looking to raise money through the private equity or pre-IPO

route enabling them to achieve their growth targets and significant size in the market.

They continue to build on our strengths in Private Equity with every transaction.

Debt placement

The company offer services to mid-cap companies in syndication of high-yield debt.

High-Yield debts are quasi-debt structures that a lot of Corporate prefer ahead of

straight equity to reduce their dilution. These are unsecured, subordinated debt or

preferred stock that is senior only to a companys shareholder.

Merchant banking

The Merchant Banking team leverages on the strong Institutional and Retail strength of

our brokerage house to successfully mobilize funds through the IPO route. The strong

grip of the capital markets combined with our understanding of the exciting business

trends help us build an expertise that is required to develop a unique positioning for the

company in an initial public issue.

Merger and Acquisition

The M&A team believe in creating right synergy for corporate merger and

acquisitions with proper structuring and execution. In the past we have advised various

multinational companies looking for companies with niche skills as well as medium

sized companies looking for the right partner to grow globally.

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Internship Document