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CHAPTER - I
INTRODUCTION
Non Banking Financial Institutions play a crucial role in broadening
access to financial services, enhancing competition and diversification of the
financial sector. RBI report on trends in banking, 2005 Non Banking
Financial Companies (NBFCs) have come a long way from the era of
concentrated regional operations, lesser credibility and poor risk
management practices to highly sophisticated operations, pan-India presence
and most importantly an alternate choice of financial intermediation (not an
alternate choice of banking as NBFCs still operate with lots of limiting
factors, which make them non-comparable to banks).
It is true that the difference between commercial banks and NBFCs is
getting increasingly blurred as NBFCs are today present in almost all the
segments of financial sector save cheque issuance and clearing facility.
NBFCs are now recognized as complementary to the banking system
capable of absorbing shocks and spreading risks at times of financial
distress. The Reserve Bank of India (RBI) also recognizes them as an
integral part of the financial system and is trying to improve the credibility
of the entire sector.
Today, NBFCs are present in the competing fields of vehicle
financing, hire purchase, lease, personal loans, working capital loans,
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consumer loans, housing loans, loans against shares, investments,
distribution of financial products, etc. More often than not, NBFCs are
present where the risk is higher (and hence the returns), reach is required
(strong last-mile network), recovery has to be the focus area, loan-ticket size
is small, appraisal & disbursement has to be speedy and flexibility in terms
of loan size and tenor is required.
The key-differentiating factor working in favour of NBFCs is
‘service’. Today, a borrower is looking for more convenience, quick
appraisal & decision-making, higher amount of loan-to- value and longer
tenor.
Though banks are not behind on the service aspect, they are largely
limited to urban centres. When it comes to semi-urban and rural centres,
particularly where the banking culture still not fully developed, NBFCs
enjoy an edge over banks. However, even in the urban areas, NBFCs have
created niches for themselves, which are often neglected by banks e.g. non-
salaried individuals, traders, transporters, stock brokers, etc, and all these
categories are growing at a rapid pace.
2
COMPANY PROFILE
KOTAK MAHINDRA GROUP
Kotak Mahindra is one of India's leading financial institutions,
offering complete financial solutions that encompass every sphere of
life. From commercial banking, to stock broking, to mutual funds, to
life insurance, to investment banking, the group caters to the financial
needs of individuals and corporates.
The group has a net worth of around Rs.1,700 crore and employs
over 4,000 employees in its various businesses. With a presence in 74
cities in India and offices in New York, London, Dubai and Mauritius, it
serves to customer base of over 5,00,000.
Kotak Mahindra has international partnerships with Goldman
Sachs (one of the world's largest investment banks and brokerage
firms), Ford Credit (one of the world's largest dedicated automobile
financiers) and Old Mutual (a large insurance, banking and asset
management conglomerate).
KEY GROUP COMPANIES
Kotak Mahindra Bank: The Kotak Mahindra Group’s flagship
company, Kotak Mahindra Finance Ltd which was established in
1985, was converted into a bank – Kotak Mahindra Bank Ltd in
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March 2003 becoming the first Indian company to convert into a
Bank.
Kotak Mahindra Capital Company: Kotak Mahindra Capital
Company Limited (KMCC), is India's premier Investment Bank
and a Primary Dealer (PD) approved by the RBI, is a strategic
joint venture between Kotak Mahindra Bank Limited and the
Goldman Sachs Group, LLP.
Kotak Mahindra Primus: Kotak Mahindra Primus Limited (KMP) is
a joint venture between Kotak Mahindra Bank Ltd and Ford Credit
International Inc., (USA) formed to finance all non-Ford passenger
vehicles.
Kotak Mahindra Asset Management Company: Kotak Mahindra
Asset Management Company (KMAMC), a subsidiary of Kotak
Mahindra Bank, is the asset manager for Kotak Mahindra
Mutual Fund (KMMF).
Kotak Mahindra Old Mutual Life Insurance Limited: Kotak
Mahindra Old Mutual Life Insurance Limited, is a joint venture
between Kotak Mahindra Bank Ltd. and Old Mutual plc. Kotak
Life Insurance.
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KOTAK SECURITIES LIMITED
Kotak Securities Limited an affiliate of Kotak Mahindra Finance
Limited, is the stock broking and distribution arm of the Kotak Mahindra
Group.
Set up in 1994, with significant minority equity participation from
Goldman Sachs (25per cent), Kotak Securities is a corporate member of both
the Bombay Stock Exchange and the National Stock Exchange of India
Limited. Its operations include stock broking and distribution of various
financial products - including private and secondary placement of debt and
equity, mutual funds, fixed deposits. Currently, Kotak Securities is one of
the largest broking houses in India with a wide geographical reach spanning
eleven Indian cities as well as offices in the USA, UK and the Middle East
through its affiliates.
Kotak Securities' core strengths are its expertise in equity research
and a wide retail distribution network. It has a full-fledged research division
involved in macro-economic studies, industry and company-specific equity
research, with analysts specialising in particular economic sectors and large
cap stocks.
Kotak Securities has also set up a comprehensive retail distribution
system to deal with a variety of clients and products. This system includes
its own sales staff and a retail network spanning the country. Kotak
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Securities has been rated number one in terms of retail distribution of public
offerings for the years 1996 and 1997 by Prime Database, the authoritative
information resource on the Indian financial markets. In addition, Euro
money 1996 voted Kotak Securities as the 'Most Trusted Securities House'
in India.
KOTAK SECURITIES HAS FIVE MAIN AREAS OF BUSINESS:
Institutional Business: This division primarily covers secondary
market broking. It caters to the needs of foreign and Indian
institutional investors in Indian equities (both local shares and Global
Depository Receipts). The division also incorporates a comprehensive
research cell with sectoral analysts who cover all the major areas of
the Indian economy.
Private Client Services: Private Client Services (PCS) is a special
investment division for High Net-worth individuals, Non-Resident
Indian investors, trusts, corporates and banks. The investment product
range at PCS is among the widest in the country and covers debt and
equity, mutual funds and specialised structured investment products.
Client Money Management: This division provides professional
portfolio management services to high net-worth individuals and
corporates. Its expertise in research and stock broking gives the
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Company the right perspective from which to provide its clients with
investment advisory services.
Retail distribution of financial products: Kotak Securities has a
comprehensive retail distribution network, comprising approximately
7000 agents, 13 branches and over 20 franchisees across India. This
network is used for the distribution and placement of a range of
financial products that includes company fixed deposits, mutual
funds, Initial Public Offerings, secondary debt and equity and small
savings schemes.
Depository Services: Kotak Securities is a depository participant with
the National Securities Depository Limited and Central Depository
Services (India) Limited for trading and settlement of dematerialised
shares. Since it is also in the broking business, investors who use its
depository services get a dual benefit. They are able to use its
brokerage services to execute transactions and its depository services
to settle these.
Approved intermediary under the Securities Lending Scheme 1997:
Kotak Securities has been granted registration to act as an Approved
Intermediary under the Securities Lending Scheme, 1997.
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Competitors:
Reliance Money
ICICI Direct
Angel Broking Firm
Geogit Securities Ltd.
Religre
Anand Rathi Securities
Motilal Oswal Securities
And Many More…
Products Offered:
Easy Equity
Easy IPO
Easy Derivatives
Easy Mutual Fund
Easy Insurance
Portfolio Management Services
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CHAPTER - II
REVIEW OF LITERATURE
SWOT analysis is a basic technique that is often used in strategic
planning, improving company success, organizational development and
identifying competitive advantage.
A tool for auditing an organization and its environment.
First stage of planning; helps to focus on key issues. Role of SWOT
is to take the information from the environmental scan and separate it into
internal and environmental scan and external issues.
Once this is completed, SWOT determines if the information
indicates something that will assist the information indicates in
accomplishing its objectives or if it organization in accomplishing its
objectives or if it indicates an obstacle that must be overcome or indicates an
obstacle that must be overcome or minimized to achieve desired results.
Swot stands Strengths, Weakness, Opportunities, and
Threats.
Strengths:
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Internal to the unit; are a units resources and capabilities that can be s
and capabilities that can be used as a basis for developing a competitive
advantage; strength used as a basis for developing a competitive advantage;
strengths should be s should be realistic and not modest. Realistic and not
modest.
What does the company do well? What makes it better than others?
What does the company have, or do, that sets it apart from its competition?
These are important questions, and should include aspects of the
company that made people to consider it for investment in the first place.
Look at branding, image, pricing power, size, market share, financial
position (balance sheet strength), etc.
Here are some strength to look for:
The size of the company relative to others in the industry
Balance Sheet strength
Cash flows
Perception of the company's products
Perception of the company's brand(s)
What advantages the company has over its competitors
In general, what does the company do well?
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Examples: good reputation among customers, resources, assets, people,
experience, knowledge, data, capabilities
Think in terms of: capabilities; competitive advantages; resources,
assets, people (experience, knowledge); marketing; quality; location;
accreditations, qualifications, certifications; processes/systems.
Weaknesses:
Now that we have determined how wonderful the company is, it's
time to look for the weaknesses. Internal force that could serve as a barrier to
maintain or achi internal force that could serve as a barrier to maintain or
achieve eve a competitive advantage; a limitation, fault or defect of the un a
competitive advantage; a limitation, fault or defect of the unit; weaknesses
it; weaknesses should be truthful so that they may be overcome as quickly as
possible should be truthful so that they may be overcome as quickly as
possible.
The same questions should be asked when looking for weaknesses.
What does the company do poorly, or not so well? What are other
companies doing better? What is keeping the company from greater success.
It's important that customers don't gloss over this section. SWOT
analysis is a brainstorming effort, so don't discount anything that comes to
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mind. If customers perceive a weakness, list it. The weakness customers fail
to list today could be why customersr investment turns out poorly next year.
12
Some weaknesses to look for:
Deteriorating balance sheet
Poor perception of company's brand(s) and/or products
Advantages other company's have?
Lack of management or other employee talent
In general, what does the company do poorly?
Examples: gaps in capabilities, financial, deadlines, morale : gaps in
capabilities, financial, deadlines, morale
Think in terms of: disadvantages; gaps in capabilities; lack of
competitive strength; reputation; financial; timescales/deadlines;
morale/leadership; accreditations; process/systems
Opportunities:
Any favorable situation present now or in the any favorable situation
present now or in the future in the external environment.
Then opportunities is to identify areas of business we think the
company is looking to enter, or should be looking to enter. The opportunities
are to gain market share from competitors, or grow the company's market to
new customers.
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But there are more than just external opportunities. There are
opportunities within a company that should be considered. Can the company
combine product lines to increase sales? Maybe the company has duplicate
costs that can be streamlined. Companies can always find ways to do things
better.
Some opportunities to look for:
New markets for products
Financial or legal trouble for competitors
New technologies the company could adopt
Changes in regulatory / tax burdens
Strategic investments
Internal efficiencies
Examples: unfulfilled customer need, arrival of new technologies, loosening
of regulations, global influences, economic boom, demographic shift
economic boom, demographic shift.
Where are the good opportunities facing you? Where are the good
opportunities facing What are the interesting trends you are aware of? What
are the interesting trends you are
Think in terms of: market developments; competitor vulnerabilities;
industry/lifestyle trends;; geographical; partnerships
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Threats:
External force that could inhibit the maintenance or attainment of a
competitive advantage; any unfavorable situation in the external
environment that is potentially damaging now or in the future.
Finally, we need to consider threats to the company. Again, threats
can be internal as well as external. In fact, I've found that internal threats
usually come first, which opens the door to external threats. Therefore, it's
important to do a good threat analysis.
Internal threats aren't usually classified as such, which I think is a
mistake. Any internal problem is a threat to the company's well-being and
should be evaluated alongside the external threats. For example, a company
that relies on developing innovative products, such as Microsoft or Intel,
faces the threat of losing engineering talent every day. This is an internal
threat that could easily pave the way for external threats.
Some possible threats are:
Internal obstacles the company is facing.
Financial constraints on the company.
Cash flow problems.
The relative position of the company's largest competitors.
Technological advances in the industry (if the company isn't keeping pace).
New technologies that threaten to displace the company's products.
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Examples: shifts in consumer tastes, new regulations, political or legislative
effects, environmental effects, new technology, loss of key staff, economic
downturn, demographic shifts, competitor intent; market demands;
sustaining internal capability; insurmountable weaknesses; financial backing
internal capability; insurmountable weaknesses; financial backing
Benefits of SWOT Analysis:
Scaleable
Simplicity
Low Cost
Flexibility
Collaborative
Quickness
Integrateable
Who should be involved in the SWOT?
1. Conduct Focus Group Sessions;
2. Planning meetings Internal and external constituents to
develop list of strengths, weaknesses, opportunities, threats
3. Planning committee to develop/select/ incorporate strategies
into strategic plan
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Steps to conduct a SWOT Analysis:
1. Driving Forces (Environmental Scan data is presented)
2. Generate list of Strengths, Weaknesses, Opportunities, Threats
3. Clarification of SWOTs
4. Categorization into themes
5. Prioritization
6. Desired State & Implications to unit
7. Strategy Development
8. Strategy Selection
9. Incorporation of strategies into Strategic Plan
10. Documentation
Prioritization:
Reduce generated list to top 5 ideas per category?
How to prioritize?
Strengths that are distinctive competencies
Weaknesses that are debilitating
Reducing threats and maximizing opportunities
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Identification Strategies:
External \ Internal Strengths Weakness
Opportunities Explore Exploit
Threats Avoid Confront
Criteria for formulating and adopting Criteria for formulating and
adopting strategies and plans:
Acceptability of decision makers, stakeholders, consumers
User impact
Relevance
Consistency with vision, mission, and values
Integration/coordination with other strategies, programs, and activities
Technical feasibility
Cost feasibility
The BCG Growth-Share Matrix is a portfolio-planning model
developed by Bruce Henderson of the Boston Consulting Group in the early
1970's. It is based on the observation that a company's business units can be
classified into four categories based on combinations of market growth and
market share relative to the largest competitor, hence the name "growth-
share". Market growth serves as a proxy for industry attractiveness, and
relative market share serves as a proxy for competitive advantage. The
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growth-share matrix thus maps the business unit positions within these two
important determinants of profitability.
BCG Matrix
This framework assumes that an increase in relative market share will
result in an increase in the generation of cash. This assumption often is true
because of the experience curve; increased relative market share implies that
the firm is moving forward on the experience curve relative to its
competitors, thus developing a cost advantage. A second assumption is that
a growing market requires investment in assets to increase capacity and
therefore results in the consumption of cash. Thus the position of a business
on the growth-share matrix provides an indication of its cash generation and
its cash consumption.
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Henderson reasoned that the cash required by rapidly growing
business units could be obtained from the firm's other business units that
were at a more mature stage and generating significant cash. By investing to
become the market share leader in a rapidly growing market, the business
unit could move along the experience curve and develop a cost advantage.
From this reasoning, the BCG Growth-Share Matrix was born.
The four categories are:
Dogs - Dogs have low market share and a low growth rate and thus
neither generate nor consume a large amount of cash. However, dogs
are cash traps because of the money tied up in a business that has
little potential. Such businesses are candidates for divestiture.
Question marks - Question marks are growing rapidly and thus
consume large amounts of cash, but because they have low market
shares they do not generate much cash. The result is a large net cash
comsumption. A question mark (also known as a "problem child")
has the potential to gain market share and become a star, and
eventually a cash cow when the market growth slows. If the question
mark does not succeed in becoming the market leader, then after
perhaps years of cash consumption it will degenerate into a dog when
the market growth declines. Question marks must be analyzed
carefully in order to determine whether they are worth the investment
required to grow market share.
20
Stars - Stars generate large amounts of cash because of their strong
relative market share, but also consume large amounts of cash
because of their high growth rate; therefore the cash in each direction
approximately nets out. If a star can maintain its large market share, it
will become a cash cow when the market growth rate declines. The
portfolio of a diversified company always should have stars that will
become the next cash cows and ensure future cash generation.
Cash cows - As leaders in a mature market, cash cows exhibit a
return on assets that is greater than the market growth rate, and thus
generate more cash than they consume. Such business units should be
"milked", extracting the profits and investing as little cash as
possible. Cash cows provide the cash required to turn question marks
into market leaders, to cover the administrative costs of the company,
to fund research and development, to service the corporate debt, and
to pay dividends to shareholders. Because the cash cow generates a
relatively stable cash flow, its value can be determined with
reasonable accuracy by calculating the present value of its cash
stream using a discounted cash flow analysis.
Under the growth-share matrix model, as an industry matures and its
growth rate declines, a business unit will become either a cash cow or a dog,
determined soley by whether it had become the market leader during the
period of high growth.
21
While originally developed as a model for resource allocation among
the various business units in a corporation, the growth-share matrix also can
be used for resource allocation among products within a single business unit.
Its simplicity is its strength - the relative positions of the firm's entire
business portfolio can be displayed in a single diagram.
22
CHAPTER -III
RESEARCH METHODOLOGY:
Research Design:
Descriptive Research:
This study is a Descriptive type of study. This is because the problem
is to be identified and to perform SWOT Analysis.
Sampling Unit
Employees who has more knowledge about Kotak Securities.
Sample Size:
The sample size adopted for the study is 50.
Sampling Method:
Convenience sampling method is being adopted for collection of data
from the respondents.
Sampling Area:
Chennai City.
Data Collection Tool:
A structured questionnaire is designed and it will be used to collect the
data from the respondents. The questionnaire is formed with, opened ended
questions.
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OBJECTIVES OF THE STUDY
Primary objective:
To identify the Strengths, Weaknesses, Opportunities and Threats for
Kotak Securities.
Secondary Objectives:
1. To know the market penetration of Kotak Securities.
2. To Support sales activities by understanding customers' businesses
better - Qualify prospective partners and suppliers
3. To Keep fully up to date on competitors' business structure, strategy
and prospects
4. To Obtain the most up to date company information available
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NEED FOR THE STUDY
NBFCs' growth had been constrained due to lack of adequate capital.
Going forward, capital infusion and leverage thereupon would catapult
NBFCs into a different zone altogether. The sector has a lot more potential
to grow BIG over the next 2 years. Potential upside could be much larger
than our estimates, if the expanded capital base is adequately leveraged.
So this study is mainly based on finding out the Strengths;
Weaknesses, Opportunities and threats for Kotak Securities.
25
SCOPE OF THE STUDY
1. This study is conducted for academic purpose
2. Provides all the crucial company information required for business
and competitor intelligence needs
3. Contains a study of the major internal and external factors affecting
the company in the form of a SWOT analysis as well as £. breakdown
and examination of leading product revenue streams
4. Data is supplemented with details on the company's history, key
executives, business description, locations and subsidiaries as well as
a list of products and services and the latest available company
statement
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LIMITATIONS OF THE STUDY
1. The growth-share matrix once was used widely, but has since faded
from popularity as more comprehensive models have been developed.
Some of its weaknesses are:
2. Market growth rate is only one factor in industry attractiveness, and
relative market share is only one factor in competitive advantage. The
growth-share matrix overlooks many other factors iv these two
important determinants of profitability.
3. The framework assumes that each business unit is independent of the
others. In some cases, a business unit that is a "dog" may be helping
other business units gain a competitive advantage.
4. The matrix depends heavily upon the breadth of the definition of the
market. A business unit may dominate its small niche, but have very
low market share in the overall industry. In such a case, the definition
of the market can make the difference between a dog and a cash cow.
5. While its importance has diminished, the BCG matrix still can serve
as a simple tool for viewing a corporation's business portfolio at a
glance, and may serve as a starting point for discussing resource
allocation among strategic business units.
27
CHAPTER - IV
ANALYSIS AND INTERPRETATION
Table: 1
BCG Matrix for Kotak Securities:
Market Share
Cash GenerationHigh Low
High
Low
StarPortfolio Management ServicesEasy Mutual FundEasy DerivativesEasy Equity
Question MarkEasy IPO
Cash Cow DogEasy Insurance
Star:
Portfolio Management Services:
The Portfolio Management Services combines competent fund
management, dedicated research and technology to ensure a rewarding
experience for its clients. So customers are very much interested in investing
portfolio management services. This can be soon moved into cash cows.
Easy Mutual Fund:
Everyone wants to diversify the risk. So they prefer investing in
mutual funds.
Easy Derivatives:
Since most of the people are not ready to take risk they are going for
easy derivatives.
28
The derivatives seminars taken by educate new entrants in the
derivatives market to be more equipped with knowledge and techniques.
Once they have the knowledge of investing in derivative instruments their
daily derivative reports will provide customers with strategies that may yield
good returns for them.
Easy Equity:
Investing in equities was never so easy. As the Best broker in India*
Kotak Securities products and services are focused at making investments in
equities as simple as writing a cheque.
Kotak Securities in house research team is among the best in the
industry and they have years of experience in the financial markets. They
scan through the plethora of stocks and find the scripts that have a high
potential of providing customer good returns.
Question Mark:
Easy IPO:
It is difficult for the people to analyze performance of a IPO. So
depending on the company the investments will be made. This can be moved
to star if Kotak Securities perform well.
29
Cash Cow:
There is no product in cash cow now, because all are in the
development stage. There is a possibility that Easy Equity and Portfolio
Management Services can be moved into cash cows from star.
Dog:
Easy Insurance:
Since there are lots of options available for insurance in the market,
customers are not ready to trade or invest in that. Moreover there is not
much awareness about insurance. So immediate attention should be taken on
insurance.
4.2 Porters Five Forces Analysis:
Five Forces Analysis helps the marketer to contrast a competitive
environment. It has similarities with other tools for environmental audit,
such as PEST analysis, but tends to focus on the single, stand alone, business
or SBU (Strategic Business Unit) rather than a single product or range of
products. For example, Dell would analyze the market for Business
Computers i.e. one of its SBUs.
Five forces analysis looks at five key areas namely the threat of entry, the
power of buyers, the power of suppliers, the threat of substitutes, and
competitive rivalry.
30
The threat of entry.
Economies of scale e.g. the benefits associated with bulk purchasing.
The high or low cost of entry e.g. how much will it cost for the latest
technology?
Ease of access to distribution channels e.g. Do our competitors have
the distribution channels sewn up?
Cost advantages not related to the size of the company e.g. personal
contacts or knowledge that larger companies do not own or learning
curve effects.
Will competitors retaliate?
Government action e.g. will new laws be introduced that will weaken
our competitive position?
How important is differentiation? e.g. The Champagne brand cannot
be copied. This desensitizes the influence of the environment.
The power of buyers.
This is high where there a few, large players in a market e.g. the large
grocery chains.
If there are a large number of undifferentiated, small suppliers e.g.
small farming businesses supplying the large grocery chains.
31
The cost of switching between suppliers is low e.g. from one fleet
supplier of trucks to another.
The power of suppliers.
The power of suppliers tends to be a reversal of the power of buyers.
Where the switching costs are high e.g. Switching from one software
supplier to another.
Power is high where the brand is powerful e.g. Cadillac, Pizza Hut,
Microsoft.
There is a possibility of the supplier integrating forward e.g. Brewers
buying bars.
Customers are fragmented (not in clusters) so that they have little
bargaining power e.g. Gas/Petrol stations in remote places.
The threat of substitutes
Where there is product-for-product substitution e.g. email for fax
Where there is substitution of need e.g. better toothpaste reduces the
need for dentists.
Where there is generic substitution (competing for the currency in
your pocket) e.g. Video suppliers compete with travel companies.
We could always do without e.g. cigarettes.
32
Competitive Rivalry
This is most likely to be high where entry is likely; there is the threat
of substitute products, and suppliers and buyers in the market attempt
to control. This is why it is always seen in the center of the diagram.
Porters Five forces Analysis.
Kotak Securities:
Buyer Power:
Lack of Expertise Curtails Bargaining Power
Retail investors often lack the knowledge and expertise in the
financial sector that calls them to approach the broking houses.
33
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies is
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 corporates on broking houses with
the rising number of IPO’s coming to the market.
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 consumer’s
growing preference for internet as compared to approaching the brokers.
34
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 industry.
Threat of Substitutes
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.
4.3 SWOT Analysis:
In keeping with Kotak Securities' commitment to provide optimal
online security for its customer to increase the safety of online trading, the
Security Key solution uses the concept of a dual password system. The
security key generates a dynamic and unique six-digit password every time
it is switched on. The customer has to login with his ID, password and this
dynamic code to be able to transact online. It is a user-friendly product
enabling risk-based authentication that allows Kotak Securities to apply an
appropriate level of security and reduces the chances of fraudulent practices.
35
According to Mr. D. Kannan, Executive Director, Kotak Securities Ltd., "At
Kotak Securities, we understand the importance of safeguarding the
investments of our customers; and that is precisely what a trusted security
expert, such as Entrust will do, to boost the confidence of our customers and
instill trust in our brand."
"Risk-based authentication - even via a Security Key - shouldn't be
cost prohibitive," said Entrust Chairman, President and Chief Executive
Officer, Bill Conner. "Enabling secure transactions through the online
channel creates greater safety for both the organization and the customer. By
offering strong authentication to its customers, Kotak proactively protects its
customers and its brand online, and we applaud them for that."
Mr. Ramesh Lakshminarayanan, Group Head of IT & Infrastructure,
Kotak Mahindra Group, speaking about the implementation, said, "Kotak
always has been attracted to the strong level of security that hardware
Security Keys provide, and now that they are available at a cost efficient
price from Entrust we can employ one of the strongest methods of
authentication available."
Separately, In 2007, the Chilean government issued a mandate - the
first in the world to have a strong enforcement clause - that all financial
institutions implement strong two-factor authentication to help secure
electronic transfers.
36
As many banks scrambled to comply, 10 of the top 16 banks in the
country opted for an easy-to-use, easy-to-integrate solution from Entrust,
Inc. (Nasdaq: ENTU), the Entrust IdentityGuard versatile authentication
platform. The successive customer wins not only created strong momentum
for the platform in Chile, but also across South America.
"As banks in Chile were required to comply with the government-
issued mandate, we found the versatility, ease of use and efficiency of
Entrust's strong authentication solution to be the right choice as we
integrated two-factor authentication," said Sebastian Covarrubias, Manager
of Marketing and Products at Banco Security. "The platform's versatility and
interoperability allows us to address both current and future needs as we
evaluate the risks of the transactions our customers choose to execute with
us online."
During the first quarter of 2007, the Chilean government issued
legislation that required banks to comply with three new rules to help protect
online transactions. The first, which is already in place, mandated that the
financial institutions implement two-factor authentication for all electronic
transfers by January 2008. Many organizations have yet to comply and are
forced to pay fines. The two remaining rules have yet to be finalized and
approved.
37
Trusted partner NeoSecure was instrumental in the procurement and
deployment of the Entrust IdentityGuard versatile authentication platform.
The value-added reseller - a MSSP and security solutions provider that
services Latin America - provided many of the banks with a turn-key
solution that involved production of the grid cards and other professional
services to help facilitate a seamless integration into the banks' secure
environments.
"We've enjoyed a strong, successful relationship with Entrust for
many years," said Eduardo Diaz, Chief Executive Officer at NeoSecure.
"The versatile authentication platform's mass-scale adoption in Chile marks
exciting growth for Entrust, NeoSecure and the security market in South
America."
At the core of their Entrust IdentityGuard deployment, Banco
Security leveraged the versatile authentication platform's grid card solution
to help verify the identities of over 17,600 customers. Banco Security has
nine offices in Santiago, Chile, four regional branches, but predominantly
provides its services through electronic channels, which made the need for
strong multifactor authentication a priority.
"Two of our biggest competitors already were entrenched in the
Chilean market for enterprise authentication when this regulation was
published, but the financial institutions needed a solution that could be
38
deployed quickly and be intuitively used by their customers, as well as be
cost effective for deployment on a mass scale," said Entrust Chairman,
President and Chief Executive Officer Bill Conner. "We applaud these elite
banks, as well as our partner NeoSecure, for proactively implementing a
solution that can scale to meet the growing threats to their customers. The
door now is open to put even greater security measures in place, such as
digital signatures and zero-touch fraud detection."
In 2006, Chilean-based Banco Santander was the first to deploy
Entrust Identity Guard through NeoSecure, even before the Chilean
government mandates were in place. The world's 12th-largest bank, Banco
Santander increased their Entrust Identity Guard grid authentication plans to
include more than 680,000 customers. Part of the Santander Group, one of
the largest financial groups in the world, Banco Santander originally
considered expensive competitive third- party one-time-passcode (OTP)
hardware tokens, but concluded that this option would have been far too
expensive for their customers.
The mandate, outlined in the document titled "Chapter1-7, Electronic
Transfers of Information and Funds," was enacted by the Superintendencia
de Bancos e Instituciones Financieras Chile, which regulates banks and
financial institutions in Chile. From an enforcement perspective, it is one of
the strongest regulations in the world to help financial institutions better
secure their customers.
39
"While other governments and regulatory bodies around the world
have mandated some kind of stronger authentication for financial
institutions, the Chilean regulation definitely has the most effective 'teeth'
for motivating compliance and the use of something stronger than a
homegrown solution," added Conner. "It's one of the most progressive
mandates we've seen in the authentication space.
Strengths:
Kotak Securities' core strengths are its expertise in equity research
and a wide retail distribution network. It has a full-fledged research division
involved in macro-economic studies, industry and company-specific equity
research, with analysts specialising in particular economic sectors and large
cap stocks.
9 Reasons for investing through Kotak Securities:
Flat Brokerage @ Rs. 9/-
Kotak securities latest offering, Kotak Flat has introduced the
international trend of charging brokerages on a per trade basis for the first
time in India. As per the latest survey conducted by Starcomm more than
50% of the surveyed audience felt that the fixed percentage system of
charging brokerages is not fair and it is this Philosophy that reflects in the
Kotak Flat simple pricing.
40
Rewards and Recognitions
Kotak Securities Ltd. is India’s No. 1 stock broking house. We have won Awards
at various occasions which showcases the Trust that people have in us.
Prime Ranking Award(2003-04)- Largest Distributor of IPO's
Finance Asia Award (2004)- India's best Equity House
Finance Asia Award (2005)-Best Broker In India
Euromoney Award (2005)-Best Equities House In India
Finance Asia Award (2006)- Best Broker In India
Euromoney Award (2006) - Best Provider of Portfolio Management : Equities
In Depth Market Analysis and Research
Our special research cell has some of India's 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. Depending on
what kind of investor you are, we bring you fundamental or basic research
and technical research.
Flexibility of products
nce you invest with Kotak Securities, you can enjoy access to a wide
range of products and services to help you make the most of your
investments. Open an investing account with us and begin right away.
41
Whether you are a beginner or an expert trader, we have different accounts
to suit your needs.
Mutual fund &IPO facility online
Get access to 16 Fund Houses, you can buy, redeem swap, make
systematic investment / withdrawal plans; all online without any paper work,
cheques and delays. You can see the status of the orders in the order book.
Also we have a mutual fund Portfolio Manager where you can see the details
of gains and the yield.
Portfolio Management Services
As you drive towards your objective of creating wealth, you need to
employ the right investment vehicles, at the right time. We give your
portfolio the edge by skillfully sifting through available investment
opportunities to help you reduce risk and maximize your returns; even as
you are left with ample time to focus on more pressing matters.
High Quality of software (KEAT):
K.E.A.T is a special software that Koataksecurities.com provides its
customers using which they can view live market rates of scrip’s on both the
NSE and BSE, create a watchlist and simultaneously place orders, view
order reports, research companies etc. It is a complete online trading
terminal.
42
Mobile trading:
Kotak Securitied understand the importance of customers time and
they appreciate the fact that technology can help customers to make
optimum utilization of your time. It is these very reasons that customers at
kotaksecurities.com bring customers the first of-it's-kind dynamic
investment facility - Mobile Share Trading. The facility is exclusively
designed to give customers instant access to the stock market through
customers mobile phone.
Phone Trading – Call and Trade:
Call & Trade is a service offered by Kotak Securities for its
customers, which provides customers with a facility to trade over the phone.
Kotak Securities provides customers a toll free number that customers can
call from anywhere in India and place an order
Market Size:
Kotak Securities Limited is a subsidiary of Kotak Mahindra Bank
Limited and is the stock broking arm of the Kotak Mahindra Group. With a
market share close to 7.3%* of daily volumes, it is one of the India’s leading
stock broking house. Kotak Securities processes over 300,000 secondary
market trades everyday and manages a huge equity asset pool with over Rs.
3300 crore under management. Awarded the Number One “Prime Ranking”
43
in 2004, it is one of the leading distributors of Initial Public Offers (IPO).
Kotak Securities has been a distributor for some of the most successful
issues in the country. It has also been the winner of many prestigious awards
such as – ‘Best Performing Equity Broker in India’ by CNBC – TV 18 –
Optimix Financial Advisory Awards 2008. It offers a wide range of financial
products for its investors, including Stocks and Shares, IPOs, Mutual Funds
and Derivatives. Kotak Securities, today, has 877 outlets in 321 cities,
servicing over 4.30,000 customers.
New Products Offered by Kotak Securities:
Kotak Securities have been the first in providing many products and
services which have now become industry standards. Some of them are:
Facility of Margin Finance to the customers Investing in IPOs and
Mutual Funds on the phone SMS alerts before execution of depository
transactions Mobile application to track portfolios AutoInvest - A
systematic investing plan in Equities and Mutual funds Provision of margin
against securities automatically against shares in your Demat account.
Kotak Securities have a full-fledged research division involved in
Macro Economic studies, Sectoral research and Company Specific Equity
Research combined with a strong and well networked sales force which
helps deliver current and up to date market information and news.
44
Kotak Securities also a depository participant with National
Securities Depository Limited (NSDL) and Central Depository Services
Limited (CDSL), providing dual benefit services wherein the investors can
avail our brokerage services for executing the transactions and the
depository services for settling them. We process more than 400000 trades a
day which is much higher even than some of the renowned international
brokers.
Weaknesses:
Customer feedback towards Kotak Securities:
K-sec is acutely unable to carry out routine tasks like opening
accounts, meeting up with customers/clients and responding to telephone
calls. Despite opening a privilege circle account (besides having a kotak
bank account and kotak life policies), i am compelled to say that k-sec is a
bunch of cavalier customers who border on the juvenile when attempting to
solve problems that they create in the first place.
The dealer appointed to cater to customers investments (not trades)
was inexperienced and incompetent. customer care is ’non-existent’.K-sec is
definitely not what Uday Kotak envisioned and the number of youngsters
who walk in and out of the jobs in K-sec is a warning sign for any intending
customer/client.
45
Kotak securities offered me a Portfolio Management Service as an
extension of my account with Kotak Bank. I agreed since they gave me an
innovation of transferring all my shares from various DP accounts held by
me. Made sense to have all holdings in one place, esp since I was planning
on adding mutual funds to my banking account too.
It has been over a month since they opened my account, yet the
account is not active. I ring up the concerned managers regularly but they
are young and I don’t thing they understand much of what goes on in the
operational side. The fact is that the other DPs have still not transferred all
my share---the RM says they are reluctant to do so----is it not the job of
Kotak to chase them? More-over I was not informed at the outset that there
will be a delay in transfers.
I had a nice Image of Kotak Securities and Bank before I dealt with
them , It all went Down and I realised Good can Lure the Customers but that
does not necessarily mean Good Service
1st I had given a margin money so that I would get Low brokerage,
but I got the Same Brokerage as a regular joy would get after paying 750
Rs /-, after complaining what they say is Sorry it was the fault of sales
person, who the hell cares about sorry and the sales person was from kotak.
2nd the User Interface is below average. I know it because I use both
ICICI and Share khan. It is not very User friendly and why there should be a
concept of maintaining a Minimum balance of 1000 Rs /-.
46
3rd Customer Care is again below average . ICIC is expensive but the
only reason I like it because customers would get somebody to listen to
customersr Grevience at the end of the Day . . ..
And the Biggest reason I find it incompetent , I belive a month back
there was a Big fall in the Market and the kotaksecurities website was not
working on calling i got the information that the website was down and they
could not take order on phone too the Website came back after 2-3 Hours .
This is Horrible . . . . my experience says that one should Distance himself
from these kind of service provider as soo as possible and thats what I doing
by closing my account . . . .
Most unprofessional, inefficient and incompetent organisation. I
applied for trading account on 16th March. Welcome (or unwelcome) kit
was wrongly sent to Lucknow then it came to Noida. They have screwed up
the application badly and their people stationed in Noida branch are a bunch
of jokers. I think password for activating the account is still in not received.
Frankly speaking it is a bullshit company with all nincompoops working in
it. I would advise people not to get trapped in this organization for anything
viz. trading account, banking account etc. etc. I do not know how Indian
system allows such hopeless companies to exist. If customers visit tier
website customers will find amnu accolades listed their but Alas! it is not
like so. It is a shame on the part of the person who is heading this junk
organization, which should be dumped into Arabian sea. Their people have
47
taken cheques of Rs. 50700/- for opening account and Rs. 2500/- for
opening bank account in Kotak Mahindra and not even a single account is
activated. Sebi/RBI should ban such type of trading organizations/banks for
putting their clients to such type of harrowing experience.
Opportunities:
Non Banking Financial Companies (NBFCs) have come a long way
from the era of concentrated regional operations, lesser credibility and poor
risk management practices to highly sophisticated operations, pan-India
presence and most importantly an alternate choice of financial
intermediation (not an alternate choice of banking as NBFCs still operate
with lots of limiting factors, which make them non-comparable to banks). It
is true that the difference between commercial banks and NBFCs is getting
increasingly blurred as NBFCs are today present in almost all the segments
of financial sector save cheque issuance and clearing facility. NBFCs are
now recognized as complementary to the banking system capable of
absorbing shocks and spreading risks at times of financial distress. The
Reserve Bank of India (RBI) also recognises them as an integral part of the
financial system and is trying to improve the credibility of the entire sector.
Today, NBFCs are present in the competing fields of vehicle
financing, hire purchase, lease, personal loans, working capital loans,
consumer loans, housing loans, loans against shares, investments,
distribution of financial products, etc. More often than not, NBFCs are
48
present where the risk is higher (and hence the returns), reach is required
(strong last-mile network), recovery has to be the focus area, loan-ticket size
is small, appraisal & disbursement has to be speedy and flexibility in terms
of loan size and tenor is required.
The key-differentiating factor working in favour of NBFCs is
‘service’. Today, a borrower is looking for more convenience, quick
appraisal & decision-making, higher amount of loan-to- value and longer
tenor. Though banks are not behind on the service aspect, they are largely
limited to urban centres. When it comes to semi-urban and rural centres,
particularly where the banking culture still not fully developed, NBFCs
enjoy an edge over banks. However, even in the urban areas, NBFCs have
created niches for themselves, which are often neglected by banks e.g. non-
salaried individuals, traders, transporters, stock brokers, etc, and all these
categories are growing at a rapid pace. New opportunities like home equity,
credit cards, personal finance, etc, are expected to take NBFCs to a new
level. Growth in all these segments is sustainable at a higher rate than before
given the low penetration and changing demography in the country.
Secondly, 100% cover for public deposits would ensure higher credibility to
the sector. Thirdly, capital had always been a limiting factor for the sector.
In a booming economy and the capital market, it has been expected that
these companies are now in a better position to raise capital at competitive
rates to fuel their future growth plans. Fourthly, better risk management and
49
regulatory practices, NBFCs enjoy a higher credibility today. Last but not
the least, due to an established reach and network, NBFCs could be the
favorites of the foreign financial giants to make an inroad in the country.
The RBI has proposed to open the domestic market for foreign banks
after FY2009 and some of the foreign banks would not hesitate to shake
hands with NBFCs to hit the ground running. Kotak Securities believe that
the sector is today at an inflection point and is likely to take a big leap in
terms of growth and profitability going forward.
NBFCs have typically grown in the southern part of the country.
Most of the NBFCs have started their journey as chit-funds and then largely
catering to the growing needs of individuals, forayed into much-better
organized non-banking operations. Though there are no concrete reasons
why NBFCs are more deep-rooted in south India, Kotak Securities
understand that it is largely because of demographic patterns.
Though the number of NBFCs in north India is also high, average
deposit is far lower compared to south India. Other parts of the country do
not have significant presence of NBFCs and are also on declining trend.
Threats:
The only uncertainty appears to be on how far the Fed will take its
benchmark rates before it calls a halt to its tightening policy. (On balance of
50
factors), it does appear that a tighter monetary regime is here to stay and this
will likely prompt a re-adjustment of portfolio flows in the short-to-medium
term," says K N Sivasubramanian, senior portfolio manager, Franklin
Templeton.
Back home, market men are expecting a hike in the reverse repo rate -
the equivalent of Fed rate -currently hovering at 5.75 per cent, in the near
term. The threat of rising interest rates in the domestic economy seems
larger than in the past two years with the narrowing interest rate differential
between the US and India.
Besides, while inflationary concerns persist, the domestic economy is
bubbling and a big chunk of the capital expenditure planned by corporates is
expected to happen over the next couple of years.
"Real demand for money is yet to pick up with corporate expansion
plans yet to move into a higher gear," says Prashant Jain, chief investment
officer, HDFC Mutual Fund.
On the supply side, banks are running out of capital to lend and
deposits are not growing at a brisk rate either. And if equity markets do not
look up, plans to raise capital may go awry making money even more
scarce. More demand for money, and short supply would only mean the
price of money or interest rates must go up further.
51
TABLE: 2
FREQUENCY ANALYSIS ON GENDER
Gender No of respondents Percentage
Male 73 73.0
Female 27 27.0
Total 100 100.0
INFERENCE:
From the above table and graph we could find that Most of the
respondents in this study are male, that is 73%. Only 27% of the
respondent’s are female. From this we could infer that it is the male who
mostly works for Kotak Securities.
CHART: 1
FREQUENCY ANALYSIS ON GENDER
73
27
Male Female
52
TABLE: 3FREQUENCY analysis on age
AGE No of respondents PercentageBelow 25 21 21.0
25 - 50 67 67.0Above 50 12 12.0
Total 100 100.0INFERENCE:
From the above table and graph we can infer that major portion of
respondents that is 67% of the respondents falls in the age group of 25-50,
another 21% of the respondents falls in the age group of below25 and 12%
of the respondents are belong to the age group of above 50. From this
information we can conclude that major employees who responded are of
age between 25 years to 50 years old.
CHART: 2
FREQUENCY ANALYSIS ON AGE
21
67
12
0
10
20
30
40
50
60
70
No.
of R
espo
nden
ts
Below 25 25 - 50 Above 50
Age
Below 25 25 - 50 Above 50
53
TABLE: 4
FREQUENCY ANALYSIS ON INVESTMENT LEVEL
Investment level No of respondents Percentage
Below 5 lakhs 54 54.0
5 lakhs - 10 lakhs 19 19.0
10 lakhs - 15 lakhs 19 19.0
Above 15 lakhs 8 8.0
Total 100 100.0
INFERENCE:
From the table and graph we can infer that 54% of respondents are
trading with their investment less than 5 lakhs, 19% of people’s investment
level fall under 5 lakhs to 10 lakhs, 19% of peoples investment fall under the
category 10 lakhs to 15 lakhs, and remaining 8% of people have invested
above 15 lakhs.
CHART: 3
FREQUENCY ANALYSIS ON INVESTMENT LEVEL
54
19 19
8
0
10
20
30
40
50
60
No. o
f Res
pond
ents
Below 5 lakhs 5 lakhs - 10lakhs
10 lakhs - 15lakhs
Above 15 lakhs
Investment level
Below 5 lakhs 5 lakhs - 10 lakhs 10 lakhs - 15 lakhs Above 15 lakhs
54
TABLE :5
FREQUENCY ANALYSIS ON INCOME LEVEL
Income No of respondents PercentageBelow 15000 14 14.015000 - 30000 31 31.030000 - 45000 34 34.0Above 45000 21 21.0Total 100 100.0
INFERENCE:
From the table and graph we can infer that 14% of the respondents
falls in the category of income below 15000 per month, another 31% in the
category between 15000 - 30000 per month, another 34% in the category of
income between 30000 – 45000, the remaining 21% fall in the category of
the income level of above 45000. This shows that major part of respondents
belongs to the high-income group category.
CHART :4
FREQUENCY ANALYSIS ON INCOME LEVEL
14%
31%
34%
21%
Below 15000
15000 - 30000
30000 - 45000
Above 45000
55
TABLE: 6
FREQUENCY analysis on education level
Education Level No of respondents PercentageNon graduate 13 13.0Graduate 49 49.0Post graduate 29 29.0Others 9 9.0
Total 100 100.0INFERENCE:
From the table and graph we can infer that major part of respondents
are graduates, they consists of about 49% of respondents. Other 13%
belongs to non graduate, 29% consists of post graduates and remaining 9%
consists of other studies. This shows that major portion of the respondents in
Salem have average and above average level of education level.
CHART: 5
FREQUENCY ANALYSIS ON EDUCATION LEVEL
13
49
29
9
0
5
10
15
20
25
30
35
40
45
50
No. o
f Res
pond
ents
Non graduate Graduate Post graduate Others
Education level
Non graduate Graduate Post graduate Others
56
TABLE: 7
FREQUENCY ANALYSIS FOR STRENGTH
Strengths No of respondents Percentage
High on service aspect 20 20
Strong last-mile approach 20 20
Focus on recovery 10 10
Easy and fast appraisal & disbursements 20 20
Able to generate higher yield on assets 25 25
Attained critical mass in terms of size 5 5
Total 100 100.0
Inference:
Out of the total Strengths, 25% of the weightage goes to Able to
generate high yield on assets and 20% of the weightage goes to Strong last
mile approach, 10% of the weightage goes to Focus on recovery, 20% to
Easy and fast appraisal and disbursements, 20% of the weightage goes to
High on service aspect, 5% of the weightage goes to Attained critical mass
in terms of size.
57
TABLE: 6
FREQUENCY ANALYSIS FOR STRENGTH
58
TABLE: 8
FREQUENCY ANALYSIS FOR WEAKNESS
Strengths No of respondents Percentage
High on service aspect 20 20
Strong last-mile approach 20 20
Focus on recovery 10 10
Easy and fast appraisal & disbursements 20 20
Able to generate higher yield on assets 25 25
Attained critical mass in terms of size 5 5
Total 100 100.0
Inference:
Out of the total Weaknesses, 31% of the weightage goes to Weak in
rural market and 14% of the weightage goes to Weak credit history, 25% of
the weightage goes to Largely restricted to south India market, 12% to
Weaker risk management and technology systems, 11% to Too much of
diversification from core business, 7% to Higher regulatory restrictions.
59
CHART: 7
FREQUENCY ANALYSIS FOR WEAKNESS
60
TABLE: 9
FREQUENCY ANALYSIS FOR OPPORTUNITIES
Strengths No of respondents Percentage
High on service aspect 20 20
Strong last-mile approach 20 20
Focus on recovery 10 10
Easy and fast appraisal & disbursements 20 20
Able to generate higher yield on assets 25 25
Attained critical mass in terms of size 5 5
Total 100 100.0
Inference:
Out of the total Opportunities, 36% of the weightage goes to Large
untapped market, both rural & urban and also geographically and 14% of the
weightage goes to Demographic changes and under-penetration, 24% of the
weightage goes to New opportunities in credit card, personal finance, home
equity, etc, 17% Augmentation of capital and leveraging for growth, 12% to
Tie-up with global financial sector giants, 6% of the weightage goes to Tie-
up with global financial sector giants, Blurring gap with banks in terms of
cost of funds and Securitisation, to liberate funds to fuel asset growth
61
CHART: 8
FREQUENCY ANALYSIS FOR OPPORTUNITIES
62
TABLE: 10
FREQUENCY ANALYSIS FOR THREATS
Strengths No of respondents Percentage
High on service aspect 20 20
Strong last-mile approach 20 20
Focus on recovery 10 10
Easy and fast appraisal & disbursements 20 20
Able to generate higher yield on assets 25 25
Attained critical mass in terms of size 5 5
Total 100 100.0
Inference:
Out of the total Threats, 38% of the weightage goes to Entry of
foreign players in post-2009 scenario and 23% of the weightage goes to
High cost of funds, 21% of the weightage goes to Asset quality deterioration
may not only wipe out profits but also networth, 12% to Growing retail
thrust within banks, 6% to the Weak financial health.
63
CHART: 9
FREQUENCY ANALYSIS FOR THREATS
64
CHAPTER –V
FINDINGS
SWOT ANALYSIS OF KOTAK SECURITIES:
Strengths:
High on service aspect
Strong last-mile approach
Focus on recovery
Easy and fast appraisal & disbursements
Able to generate higher yield on assets
Attained critical mass in terms of size
Out of the total Strengths, 25% of the weightage goes to Able to generate
high yield on assets and 20% of the weightage goes to Strong last mile
approach, 10% of the weightage goes to Focus on recovery, 20% to Easy
and fast appraisal and disbursements, 20% of the weightage goes to High on
service aspect, 5% of the weightage goes to Attained critical mass in terms
of size.
So the critical strengths are Able to generate high yield on assets.
65
Weakness:
Weak in rural market
Weak credit history.
Largely restricted to the south India market
Weaker risk-management & technology systems
Too much of diversification from core business
Higher regulatory restrictions
Out of the total Weaknesses, 31% of the weightage goes to Weak in rural
market and 14% of the weightage goes to Weak credit history, 25% of the
weightage goes to Largely restricted to south India market, 12% to Weaker
risk management and technology systems, 11% to Too much of
diversification from core business, 7% to Higher regulatory restrictions.
So the critical weakness is “Weak in rural market”.
Opportunities:
Augmentation of capital and leveraging for growth
Large untapped market, both rural & urban and also geographically
Demographic changes and under-penetration
66
New opportunities in credit card, personal finance, home equity, etc
Tie-up with global financial sector giants
Blurring gap with banks in terms of cost of funds
Securitisation, to liberate funds to fuel asset growth
Out of the total Opportunities, 36% of the weightage goes to Large
untapped market, both rural & urban and also geographically and 14% of the
weightage goes to Demographic changes and under-penetration, 24% of the
weightage goes to New opportunities in credit card, personal finance, home
equity, etc, 17% Augmentation of capital and leveraging for growth, 12% to
Tie-up with global financial sector giants, 6% of the weightage goes to Tie-
up with global financial sector giants, Blurring gap with banks in terms of
cost of funds and Securitisation, to liberate funds to fuel asset growth
So the critical opportunity is Large untapped market, both rural & urban
and also geographically.
Threats:
Weak financial health
High cost of funds
Asset quality deterioration may not only wipe out profits but also
networth
67
Entry of foreign players in post-2009 scenario
Growing retail thrust within banks
Out of the total Threats, 38% of the weightage goes to Entry of foreign
players in post-2009 scenario and 23% of the weightage goes to High cost of
funds, 21% of the weightage goes to Asset quality deterioration may not
only wipe out profits but also networth, 12% to Growing retail thrust within
banks, 6% to the Weak financial health.
So the critical threat is Entry of foreign players in post-2009 scenario
BCG Matrix:
Star:
Portfolio Management Services:
The Portfolio Management Services combines competent fund
management, dedicated research and technology to ensure a rewarding
experience for its clients. So customers are very much interested in investing
portfolio management services. This can be soon moved into cash cows.
Easy Mutual Fund:
Everyone wants to diversify the risk. So they prefer investing in
mutual funds.
68
Easy Derivatives:
Since most of the people are not ready to take risk they are going for
easy derivatives.
The derivatives seminars taken by educate new entrants in the
derivatives market to be more equipped with knowledge and techniques.
Once they have the knowledge of investing in derivative instruments their
daily derivative reports will provide customers with strategies that may yield
good returns for them.
Easy Equity:
Investing in equities was never so easy. As the Best broker in India*
Kotak Securities products and services are focused at making investments in
equities as simple as writing a cheque.
Kotak Securities in house research team is among the best in the
industry and they have years of experience in the financial markets. They
scan through the plethora of stocks and find the scripts that have a high
potential of providing customer good returns.
Cash Cow:
There is no product in cash cow now, because all are in the
development stage. There is a possibility that Easy Equity and Portfolio
Management Services can be moved into cash cows from star.
69
Dog:
Easy Insurance:
Since there are lots of options available for insurance in the market,
customers are not ready to trade or invest in that. Moreover there is not
much awareness about insurance. So immediate attention should be taken on
insurance.
70
CHAPTER -VI
SUGGESTIONS
They need to target in rural areas where there is a vast market. At
present this a weakness for them. This can be converted to a
opportunity.
Kotak Securities can achieve returns through investments in stocks of
small, medium and large capitalized companies. The portfolio
manager may invest in private placements or pre Follow on Public
Offering (FPO) placement of listed securities.
Carefully top strengths,weakness, opportunities threats should be
improved
Strengths-Able to generate high yield on assets
Weakness-Weak in rural market
Opportunities-Large untapped market, both rural & urban
Threats-Large untapped market, both rural & urban
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CHAPTER -VII
CONCLUSION
By sorting the SWOT issues into the 6 planning categories one can
obtain a system which presents a practical way of assimilating the internal
and external information about the business unit, delineating short and long
term priorities, and allowing an easy way to build the management team
which can achieve the objectives of profit growth.
This approach captures the collective agreement and commitment of
those who will ultimately have to do the work of meeting or exceeding the
objectives finally set. It permits the team leader to define and develop co-
ordinated, goal-directed actions, which underpin the overall agreed
objectives between levels of the business hierarchy.
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BIBLIOGRAPHY
BOOKS AUTHORS
Marketing Management Philip Kotler
Principles of Marketing Philip Kotler
Marketing Research Tull & Donald
Consumer Behaviour Leon G.Schiffinan
Leslie Lazer Kanuk
S.P.Gupta
Fundamental of StatisticsJOURNALS
Business Today
Business World
Economic Times
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QUESTIONNAIRE
l)Name
2) Gender
□ Male □ Female
3) Age□ Below 25 □ 25-50 □ Above 50
4) Level of investment
□ Below 5 lakhs □ 5 -10 lakhs □ 10 -15 lakhs □Above 15 lakhs
5) Income (Per month)
□ Below Rs 15,000 □ Rs 15,000 to Rs 30,000
□ Rs 30,000 to Rs 45,000 □ Above Rs 45,000
6) Education
□ Non Graduate □ Graduate □ Post Graduate □Others
Internal Analysis: To
identify Strengths:
1. What is the market size of your company when compared to other
investments companies in the industry?
2. What is your perception on the products offered by Kotak Securities?
3. What advantages the company has over its competitors?
4. In general, what does the company do well?
5. What do other people see as your strengths?
6. What would you want to boast about to someone who knows nothing
about this about this organization and its work?
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To identify Weakness:
1. What can be improved in Kotak Securities?
2. What is done poorly in Kotak Securities?
3. What should be avoided in Kotak Securities?
4. What is this organization NOT doing that you feel it should be doing?
5. If you could change 1 thing that would help Kotak Securities to function more effectively, what would you change?
External Analysis:
To identify Opportunities:
1. What are the New markets for the investment products?
2. What can be the possible Financial or legal trouble for competitors?
3. What are the new technologies the company can adopt?
4. What are the possible changes tat can be done in regulatory / tax burdens?
5. What are the strategic investments can be made?
6. What are the internal efficiencies in Kotak Securities?
7. In general what are opportunities to develop Kotak Securities?
To identify Threats:
1. What are the financial constraints on the company?
2. Do you have any cash flow problems? If yes sate it?
3. What is the relative position of the company's largest competitors?
4. What are the technological advances in the industry?
1. What are the new technologies that threaten to displace the company's products?
5. What are the obstacles the organization face?
6. Could any of your weaknesses seriously threaten your unit?
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