PROJECT REPORT of Marketing Strategies of Ashlar Group Bhupendra Dixit Anand Engg. College

RESEARCH REPORT“

ON

“A Comparison between Investment & Savings Of ASHLAR GROUP”

In Partial Fulfillment of Award of Master of Business Administration

MBA

(2010-2012)

Under the Supervision ofMr. Atul Narang

Asst. ProfessorDepartment of MBA

By

Bhupendra Kumar Dixit(1000170009)

ANAND ENGINEERING COLLAGEAGRA

Affiliated - Mahamaya Technical University, Noida

DECLARATION

I, Bhupendra Kumar Dixit Student of MBA IVth sem Anand Engineering

College, Agra Batch 2010-12, hereby declare that the Research Project titled “A

Comparison between Investment & Savings Of ASHLAR GROUP”is the

outcome of my own work and the same has not been submitted to any other

University /institution for the award of any degree.

DATE: Bhupendra Kumar Dixit

PLACE: AGRA

ACKNOWLEDGEMENT

This is a great opportunity to acknowledge and to thanks all those persons without

whose support and help this research report would have been impossible. We

would like to add a few heartfelt words for the people who were part of this project

in numerous ways.

I am very grateful to Mr. Atul Narang (Project Guide) , for providing all the

facilities needed during the research.

Bhupendra Kumar Dixit

MBA IVth Sem

PREFACEPREFACE

A research project report is the very important part of any management

programme. It is a Launch Pad for introducing students to a real-life scenario,

which cannot be simulated in the classroom. It not only enables the student to

apply the theoretical knowledge in a practical scenario but also enables them to

learn things beyond books. This is a period where the students add value to them

self and learn management skills as well as the corporate culture.

Only academic knowledge is not enough for the students, it is also necessary for

them to have a slice of the practical corporate world wherein they can apply their

knowledge and put their skills to a test. This is a first step towards corporate world.

A research project report provides an opportunity for students, to satisfy their

inquisitiveness to know more details, exposes them to technical skills, and helps

them to acquire social skills by drawing them into communication with outside

professionals for continuous interaction.

TABLE OF CONTENTS

TOPICS PAGE NO.

INTRODUCTION TO THE TOPIC 6

OBJECTIVE OF THE PROJECT 8

METHODOLOGY 11

LIMITATIONS OF THE PROJECT 13

INTRODUCTION TO HUL 14

DISTRIBUTION NETWORK OF HUL 26

SUGGESTED GIFTING PACKS OF HUL PRODUCTS 57

FINDINGS OF PROJECT 63

SUGGESTIONS 68

CONCLUSION 71

BIBLIOGRAPHY 83

ANNEXURES

OBJECTIVES

To find out the various investment and saving scheme in

Ashlar Group.

To locate the investment and saving sources in Ashlar

Group

To determine the capital structure of company.

To understand the nature of interest, repayment method and

other participative rights associated with financing sources.

To incorporate the various sources through which a company

may meet its financial needs.

RESEARCH METHODOLOGY

COLLECTION OF DATA:-

Primary Data- The data which is collected for the first time and is the original

data.

Personal interaction

Questionnaire

Secondary Data- This is the data which is collected from any other source and is

the duplicate data.

Books

Journals

Internet

Company documents

RESEARCH DESIGN :-

Descriptive Design

Research Instrument :

Neither Structures nor disguised Questionnaire for

retailers.

But there are a specific Questionnaire for house hold customers

for finding their opinion.

SAMPLING PLAN:-

Sampling Method :

Non-Probability Sampling [Convenience & Quota

Sampling]

Sample Size :

100 Dealer

1000 House hold customers

Sample Unit:

Noida

Sample Area : Noida

LIMITATIONS OF THE STUDY

This survey although carried out with fullest possible efforts

and devotion, the limitation of the time, resources available and

limited area chose may lead to limited representation of the

universe. The major limitations from which the study suffers are

as follows.

Time Constraint:-

Time factor has been a very big limitation in the

research/survey like this. The respondents have limited time so

they sometimes refuse to answer the questionnaire, also me as a

surveyor has less time to conduct the survey. So the size of the

sample was restricted to Agra.

Biasness in Information:-

It was felt that respondent did not come up with true

responses, in several case the respondent answered the

questions with the help of other family members and it was

mostly in case of less educated person.

Financial Constraint:-

The financial aspect, which includes the traveling cost, cost of

administrating questionnaire and collection of data through other

resources was also costly.

Constraint Regarding the use of technique:-

The deeper statistical techniques such as analysis using

variance, multiple regressions etc., could not be adopted due to

the constraint of time and efforts. So simple statistical techniques

were used to analyze the data.

Company Profile

ASHLAR group has progressed as one of the foremost executing broker dealer

across India. Here we offer direct market access, refined trading applications and

radical expertise to institutional and individual clients. Our company is also

specialized in offering custom-made solutions that is appropriate to each individual

investor's needs. Our area of proficiency includes Commodity Trading,

Derivatives, innovative thought process and most of all focuses on equities.

We operate from the head office at A-38 Sector -67 Noida -201301. Our office is

set with a prominent spacious location with all the contemporary facilities and

utilities for our valued customers. Besides our branch offices are well-resourced

with NSE Trading terminals, skilled customer support personnel and other

infrastructures.

ASHLAR provides advices for Stocks- Cash and F&O traded in NSE & BSE,

commodities including bullions, metals and agro-commodities traded in MCX and

NCDEX. We offer prompt and efficient services, and a long record of success.

ASHLAR is absolutely a leader in the ground of servicing commodities traders.

Today we have emerged as one of the most valued Stock-Broking Companies in

India. With its exceptional retail-focused stock trading business replica, ASHLAR

is unswerving in providing ‘Real Value for Money’ to all its customers.

There will be a complete market research on permanent basis and we vitally

scrutinize each and every market information. Moreover we also have exposed to

fairly innovative sources of data that helps to keep ahead to identify the market

trends.

Nowadays the fast growing market demands inclusive front to back office

resolution in order to be competitive. ASHLAR identifies the challenges

institutions face, and endeavors to offer the latest revolutionary solutions to have

an impact where it counts, the bottom line.

We aim in offering perfect execution support to meet our various client needs on a

stage of professionalism and reliability.

Infrastructure Facilities ::

ASHLAR offers universal access to the customers and facilities infrastructure

that has VSATs and Leased Lines which is directly connected to NSE trading

hubs.

We have platform on the trading terminals of NSE and CTCL (Computer-

to-Computer Link Facility) that is operated by NCFM and comes with

well-qualified staff.

VPN (Virtual Private Network) facility helps in connecting its branches to

the Head office.

Offices are well-furnished with latest systems, servers and other hardware

and software. You can find the latest Share Broker Accounting package at

ASHLAR

There are manifold access solutions to suit your desires, linking directly

via backbone or through extensive reach with extranet partners.

Infrastructural facilities help in retail equity broking, online investment

portal and depository services.

The e-mail facility is offered in all the branch offices that work both on

local network as well as through internet for fast, smooth and effective

communication.

A team of skilled chartist is being consistently giving better & better

suggestions on shares and other commodities.

Working in partnership

The Ashlar Group has a wide range of skills and expertise specific to the building

and development market. Over the years the we have developed a number of

strategic residential and commercial projects in partnership with land owners.

With gross development values from £1m-£8m, we offer a close and open working

partnership that enables all parties to maximise returns and foster future

relationships. To date we have undertaken projects as diverse as classic heritage

restoration through to to modern new build. By drawing on the Group's

considerable in-house services, we are able to deliver a controlled program that

encompasses all aspects from planning consultancy through to final build.

Vision & Mission ::

To offer the best value for money to the investors through

ground-breaking products trading/investments policies, state of

the art know-how and tailored service.

To have inclusive synchronization between quality-in-process

and in the constant development to deliver outstanding service

that will delight our customers

Committed in providing top-notch products and services which

surpass

the expectations of our customers.

Our Strength ::

The Biggest Strength of our group are the ethical workings & finding

the most profitable solution for everyone .Whether it is day traders,

jobbers or short term & long term investors.

We strongly Believe that potentional of growth is actually unlimited .

Provided we have innovative ideas, conviction and a professional

approach to implement it.

ASHLAR COMMODITIES PVT LTD

ASHLAR SECURITIES PVT LTD

Registered Office:

A-38, Sector-67, Noida-201301

Phone No: 0120-2484747, 7503323232

Fax No: 07503121155

Email: [email protected]

Corporate Office:

411,Arunachal Bhawan, 19,Barakhamba Road, New Delhi-110001

Phone No: 011-47464746

Fax No: 011-43084662

Head Office:

A-38, Sector-67, Noida-201301

Phone No: 0120-2484747, 7503323232

Fax No: 07503121155

Email: [email protected]

URL: www.ashlarindia.com

Branches ::

Meerut:

IInd Floor, Abu Lane, Abu Plaza, Meerut Cantt.Meerut-250002

Phone: +91-01214056788E-mail: [email protected]

Bundelkhand:

Malakpura Mahoba UP-210427

Contact Person : Vineet Kumar TrivediPhone: +91-9415890801E-mail: [email protected]

Product & servicesCommodity Trading ::

With the world's progressive shift toward a market economy and globalisation,

the Commodity Futures market is playing an increasingly important role in

forming prices and hedging risk. Ashlar is a reputed name in the field of

commodity trading. Ashlar is a member of both the leading commodity

exchanges of India, MCX and NCDEX.

Ashlar gives certain benefits to their clients such as: fast and accurate order

execution, instant access to information regarding their account, personalised

attention for large and small investors, and the final decision on when and how to

invest is always the client's choice. Ashlar also equips you with reliable research,

based on technical and fundamental study of all major commodities.

The future for commodity market is bright. It is noteworthy that the Commodity

and Equity markets have been moving in tandem, bucking the global market

trend.

We are currently facilitates trading of following products :

NCDEX

• Agro Products : Barley, Cashew, Castor Seed, Chana, Chilli, Coffee-Arabica,

Coffee-Robusta Cherry AB, Cotton Seed Oilcake, Crude Palm Oil, Coriander,

Expeller Mustard Oil, Groundnut (in shell), Groundnut Expeller Oil, Guar Gum,

Guar Seeds, Gur, Indian Parboiled Rice, Indian Pusa Basmati Rice, Indian Raw

Rice, Indian Traditional Basmati Rice, Indian 28.5 mm Cotton, Indian 31 mm

Cotton, Jeera, Jute Sacking Bags, Masoor Grain Bold, Medium Staple Cotton,

Mentha Oil, Mulberry Green Cocoons, Mulberry Raw Silk, Rapeseed - Mustard

Seed, Pepper, Potato, Raw Jute, Rapeseed - Mustard Seed Oilcake, RBD

Palmolein, Refined Soy Oil, Rubber, Sesame Seeds, Shankar Kapas, Soy Bean,

Sugar, Tur, Turmeric, Urad Desi, V -797 Kapas, Wheat, Yellow Peas, Yellow

Red Maize, Yellow Soybean Meal

• Precious Metals : Gold, Gold (100 gms), Silver, Silver (5kg)

• Base Metals : Electrolytic Copper Cathode, Aluminium Ingot, Nickel Cathode,

Zinc Ingot

• Ferrous Metals : Mild Steel Ingots, Sponge Iron

• Energy Products : Brent Crude Oil, Furnace Oil, Light Sweet Crude Oil,

Thermal Coal

• Polymers : Linear Low Density Polyethylene, Polypropylene, Polyvinyl

Chloride

• Carbon Credits

MCX

Bullion : Gold, Gold Guinea, Gold HNI, Gold M, i-gold, Silver, Silver HNI,

Silver M, Platinum

Oil & Oil Seeds : Castor Oil, Castor Seeds, Coconut Cake, Coconut Oil, Cotton

Seed, Crude Palm Oil, Groundnut Oil, Kapasia Khalli, Mustard Oil, Mustard

Seed (Jaipur), Mustard Seed (Sirsa), RBD Palmolein, Refined Soy Oil, Refined

Sunflower Oil, Rice Bran DOC,

Rice Bran Refined Oil, Sesame Seed, Soymeal, Soy Bean, Soy Seeds

Spices : Cardamom, Coriander, Jeera, Pepper, Red Chilli, Turmeric

Metal : Aluminium, Copper, Lead, Nickel, Sponge Iron, Steel Long

(Bhavnagar), Steel Long (Govindgarh), Steel Flat, Tin, Zinc

Fiber : Cotton L Staple, Cotton M Staple, Cotton S Staple, Cotton Yarn, Kapas,

Raw Jute

Pulses : Chana, Masur, Yellow Peas

Cereals : Maize

Energy : ATF, Brent Crude Oil, Crude Oil, Furnace Oil, Natural Gas, M. E.

Sour Crude Oil

Plantations : Arecanut Jahaji, Cashew Kernel, Coffee (Robusta), Red Arecanut

Raashi, Rubber

Petrochemicals : HDPE, Polypropylene(PP), PVC

Weather : Carbon Credit, Carbon Credits – CER

Others : Guargum, Guar Seed, Gurchaku, Mentha Oil, Potato (Agra), Potato

(Tarkeshwar), Sugar M-30, Sugar S-30

Equity & derivatives ::

Ashlar is the member of NSE and BSE in Capital Market & Derivative Segment

providing their clients first class service. Our success in this business is driven by

our keen understanding of the business and ability to provide clients with

solutions appropriate to fit their needs. We Ashlar are the most competitive

company in the field of Stock Equities and Derivatives.

We are a full service brokers that are committed in providing outstanding service

while offering, the investor an array of investment products to meet their needs.

Our advisors team comprises of expert, skilful, determined, energetic and

passionate people who have extensive experience in the field of Capital Market.

Our stockbrokers provide the clients the advice and support they need to manage

their investments.

Ashlar help the future investors to trade a broad market by making one trading

decision rather than making many decisions involved with investing in numerous

individual stocks . The overwhelming response of our clients has encouraged us

to set new benchmarks in the industry by providing better quality services.

Ashlar have an on-going relationship with institutional and other clients which

includes identifying clients investment requirements, identifying suitable

relevant investment opportunities, keeping clients informed of company and

market developments, maintaining a constant flow of information to our clients;

and transacting buy and sell orders effectively and professionally.

Mutual Funds and IPO's ::

Mutual Funds and IPO’s can be an excellent option if you’re looking for a

diversified investment portfolio which offers liquidity and transparency. Mutual

Funds & IPO’S are one of the most suitable investments for the common man as

they offers an opportunity to invest in a diversified, professionally managed

basket of securities at a relatively low cost. Recent trends in mutual fund flows

suggest that the Indian investor is regaining his appetite for equities. Use Mutual

Funds & IPO’S to plan your financial future.

Currently the investor have been risk-averse and therefore park most of their

saving in Fixed Deposits and other saving Accounts, though the yield from such

investment avenues is very low. However, the recent trend has been such that

more people have been attracted towards investment in the Mutual Funds &

IPO’s. Ashlar provides complete transaction support to our associates and their

clients for investments in primary markets through Mutual funds & IPO’s.

Ashlar offers personalized services for investments (including mutual funds of

all types: Equity funds, Growth and Value Funds, Large- Cap and Small-Cap

Funds, Bond Fund , Foreign Stocks Funds, Money Market Funds, Sector

Funds,& Asset Allocation Funds) & IPO’s.

Research ::

Mutual Fund

DP Forms

Research Intraday

Research Weekly

News Letter

Equity Research

o Company Report

o Sector Report

Other

Research: News Letter

72 Title Date Download

EQUITY NEWS LETTER 2011-07-25































http://www.ashlarindia.com/admin/upload_docs/1311565557_EQUITY%20NEWS%20LETTER.pdf

































NEWS LETTER 2011-05-26








COMMODITY NEWS LETTER 2011-05-16






COMMODITY NEWS LETTER 2011-05-09



























http://www.ashlarindia.com/admin/upload_docs/1305524690_COMMODITY%20NEWS%20LETTER.pdf






http://www.ashlarindia.com/admin/upload_docs/1304918191_COMMODITY%20NEWS%20LETTER.pdf












http://www.ashlarindia.com/admin/upload_docs/1303356734_NEWS%20LETTER.pdf



http://www.ashlarindia.com/admin/upload_docs/1303185501_NEWS%20LEETR%2018%20APRIL.pdf










Internet Trading ::

Trade on BSE NSE, F&O

Direct Execution of Orders

Alerts on Mails Through SMS

Regular Accounts Update

Personalized Services through relationship manager.

Regular Research Expert Advice

Intraday Tick By Tick Chart

Top Gainer & Losser List

New High Low's Report


http://www.ashlarindia.com/admin/upload_docs/1302586408_news%20letter.pdf





http://www.ashlarindia.com/admin/upload_docs/1301889884_News%20letter.pdf


Other Useful Information

Regular News Flow

Expert opinion & technique

Paperless Working

Savings form an important part of the economy of any nation.

With savings are invested in many forms of investment options

available, the money acts as the driver for growth of the

country. Indian financial scene too presents a plethora of

INTRODUCTION

SWOT analysis of insurance industry:

Premium rates are

increasing and so are

commissions

The variety of

products are

increasing

Customers expects

more services from

their brokers

Companies are slow

respond to changing

needs

Increasing trend of

financial weakness among

the companies

More competitors for

agencies to compete with

banks & internet players

STREN WEAKN

Ability to cross sell

financial services

barely being tapped

Technology is

improving to that

point that paperless

transactions are

available

Client’s increasing

need for insurance

consultant can open

new ways to service

the client and

generate income

Increasing cost and need

for insurance might hit a

point where a backlash

will occur

Increasing expenses and

lower profit margins can

hit smaller agencies and

insurance companies

OPPORTUN THREA

INVESTMENT OPTIONS

INVESTMENT OPTIONS

STOCK MARKET

MUTUAL FUNDS

INSURANCE

FIXED DEPOSITS

There are many investment options available for the people in the

market, but there are mainly five investment options, which are

considered to be as most popular and most effective investment

options available in the current market scenario. In general,

almost 95-98% people do invest in these, since the Expected Rate

of Return is much higher than any other investment options,

irrespective of the amount of risk is very high in some of the

cases. These investment options are:

This investment option is most popular and safest option available

in the market. With almost every working people invest in fixed

deposits; this investment option leads the chart of four

investment options because of its safety and popularity. Though

the amount of return is much lesser than the other three options,

this option heads the table as it has almost no risk of losing the

invested amount. Also, it is the oldest among the other three, so

the trust factor of people is very high.

There are mainly three types of fixed deposits available in the

market, namely, viz.

1. Fixed deposits offered by Banks

FIXED DEPOSITS:

2. Fixed deposits offered by Post Offices

3. Company fixed deposits

Now, we’ll see these three fixed deposit schemes in details.

1. Fixed deposits offered by Company:

Considered as the safest of all options, banks have been the

roots of the financial systems in India. Promoted as the means

of social development, banks in India have indeed played an

important role in not only urban areas, but also in rural

upliftment. For an ordinary person though, banks have acted as

the safest avenue wherein a person deposits money and earns

interest on it. The two main modes of investment in banks,

savings accounts and fixed deposits have been effectively used

by one and all.

However, today the interest rate structure in the country is

headed southwards, keeping in line with global trends. With the

banks offering just above in their fixed deposits for one year,

the yields have come down substantially in recent times. Add

to this, inflammatory pressure in the economy and we have a

position where the savings are not earning. The inflation is

creeping up almost 8% at times, this means the value of

money saved goes down instead of going up. This effectively

mars any chance of gaining investments from the banks.

Company fixed deposits:

Another oft-used route to invest has been the fixed deposit

schemes floated by companies. Companies have used fixed

deposit schemes as a means of mobilizing funds for their options

and have paid interest on them. The safer a company is rated, the

lesser the return offered has been the thumb rule.

However, there are several potential roadblocks are there.

Firstly, of all the danger of financial positions of the company

not being understood by the investor lurks. The investors rely on

intermediaries who more often than not, don’t reveal the entire

truth.

Secondly, liquidity is a major problem with the amount being

received months after the due dates. Premature redemption is

generally not entertained without cuts in the returns offered and

though they present a reasonable option to counter interest rate

risk (especially when the economy is headed for a low interest

regime), the safety of amount has been found lacking. Many

cases like the Ashlar Group and DCM Group fiascoes have

resulted in low confidence in this option.

Now let us look at the Indian Stock Market in details.

STOCK MARKET:

The Indian Stock Market is also the other name for Indian Equity

Market or Indian Share Market. The forces of the market depend

on the monsoons, global funding flowing into equities in the

market and the performance of various companies. The market of

equities is transacted on the basis of two major stock indices,

National Stock Exchange of India Ltd. (NSE) and The Bombay

Stock Exchange (BSE), the trading being carried on in a

dematerialized form. The physical stocks are in liquid form and

cannot be sold by the investors in any market.

The equity indexes are correlated beyond the boundaries of

different countries with their exposure to common calamities like

monsoon which would affect both India and Bangladesh or trade

integration policies and close connection with the foreign

investors. From 1995 onwards, both in terms of trade integration

and FIIs India has made an advance.

Indian Equity Market at present is a lucrative field for the

investors and investing in Indian stocks are profitable for not only

the long and medium-term investors, but also the position

traders, short-term swing traders and also very short term intra-

day traders. In terms of market capitalization, there are over 2500

companies in the BSE chart list with the Reliance Industries

Limited at the top. The SENSEX today has rose from 1000 levels

to 8000 levels providing a profitable business to all those who had

been investing in the Indian Equity Market. There are about 22

stock exchanges in India which regulates the market trends of

different stocks. Generally the bigger companies are listed with

the NSE and the BSE, but there is the OTCEI or the Over the

Counter Exchange of India, which lists the medium and small

sized companies.

In the Indian market scenario, the large FMCG companies reached

the top line with a double-digit growth, with their shares being

attractive for investing in the Indian stock market. Such

companies like the Tata Tea, Britannia, to name a few, have been

providing a bustling business for the Indian share market. Other

leading houses offering equally beneficial stocks for investing in

Indian Equity Market, of the SENSEX chart are the two-wheeler

and three-wheeler maker Bajaj Auto and second largest software

exporter Infosys Technologies.

Thus, the growing financial capital markets of India being

encouraged by domestic and foreign investments is becoming a

profitable business more with each day. If all the economic

parameters are unchanged Indian Equity Market will be conducive

for the growth of private equities and this will lead to an overall

improvement in the Indian economy.

Now apart from all these, the first question that comes in our

mind is,

Why do so many people invest in shares?

Simply put, you want to invest in order to create wealth. While

investing is relatively painless, its rewards are plentiful. To

understand why you need to invest, you need to realize that you

lose when you just save and do not invest. That is because the

value of the rupee decreases every year due to inflation.

Historically shares have outperformed all the other investment

instruments and given the maximum returns in the long run. In

the twenty-five year period of 1980-2005 while the other

instruments have barely managed to generate returns at a rate

higher than the inflation rate (7.10%), on an average shares have

given returns of about 17% in a year and that does not even take

into account the dividend income from them. Were we to factor in

the dividend income as well, the shares would have given even

higher returns during the same period.

Inflation: general rise in prices and wages caused by an increase

in the money supply and demand for goods, and resulting in a fall

in the value of money. Inflation occurs when most prices rise by

some degree across the economy.

Investment options Returns per annum

Stock market 17%

Bank fixed deposits 9%

Gold 5.7%

Stock Market Bank Fixed Deposits Gold0%

2%

4%

6%

8%

10%

12%

14%

16%

18%17%

9%

6%

Returns per annum

Advantages of investing in shares:

There are lots of advantages of investment in share market. Some

of these are:

Dividend income: investments in shares are attractive as much

for the appreciation in the share prices as for the dividends their

companies pay out.

Tax advantages: shares appear as the best investment option if

you also consider the unbeatable tax benefits that they offer.

First, the dividend income is tax-free in the hands of investors.

Second, you are required to pay only a 10% short term capital

gains tax on the profits made from investments in shares, if you

book your profits within a year of making the purchase. Third, you

don't need to pay any long-term capital gains tax on the profits if

you sell the shares after holding them for a period of one year.

The capital gains tax rate is much higher for other investment

instruments: a 30% short-term capital gains tax (assuming that

you fall in the 30% tax bracket) and a 10% long-term capital gains

tax.

Easy liquidity: shares can also be made liquid anytime from

anywhere (on sharekhan.com you can sell a share at the click of a

mouse from anywhere in the world) and the gains can be realized

in just two working days. Considering the high returns, the tax

advantages and the highly liquid nature, shares are the best

investment option to create wealth.

How people earn from the investment in shares?

Shares can give us returns in two forms.

A. Appreciation in share prices: You buy shares with the belief

that their price will increase and that when this happens you will

be able to sell off your shares and earn profit. For example, if you

bought a share for Rs100 three years ago and it is Rs500 today,

then you have earned Rs400 in three years.

B. Dividend: when a company makes profits, it can choose to

share part of its profits with its shareholders by paying out

dividend. This dividend is paid as a percentage of the face value

of the share. For example, a company may declare a dividend of

25%. Then if the face value of its share is Rs10 you will get

Rs2.50 for every share you own of that company, irrespective of

the market price. In itself this might not be much, but over a

longer period of time or if you have a lot of shares, you could earn

quite a bit from the dividend itself. The best thing about dividends

is that they are tax-free in the hands of investors. Dividend yield

stocks are known to give returns higher than fixed deposits

[dividend yield = (dividend per share / market price of the share)

x 100].

What are the expenses during transaction?

Every share transaction attracts some tax or the other. Some of

the main expenses are as follows.

A. Capital gains tax: If you purchase a share and sell it at a

price higher than the purchase price and if this sale is within a

year of the purchase, then a 10% capital gains tax is levied on the

profit that you make. For example, if you bought a share for

Rs100 on January 1, 2005 and sold it for Rs150 on July 1, 2005,

then you have to pay a tax of 10% on the Rs50 profit that you

make. If you sell after a year of purchase, there is no tax on the

long-term gains.

B. Securities transaction tax: Securities transaction tax (STT)

is levied by the government on every transaction you do on a

stock exchange. You don’t have to pay this separately; it’s

collected by your broker. As per the Union Budget 2005 the STT

will be 0.10% on delivery-based transactions and 0.02% on intra-

day transactions.

C. Brokerage: Brokers get a commission on every trade that

they do for you. This commission varies from broker to broker; at

sharekhan.com the brokerage is 0.5% for delivery-based

transactions and 0.10% for intraday transactions. On the

brokerage amount you are required to pay a service tax to the

government (to be collected by the broker). The brokerage varies

depending on the service that the broker provides you. Some

brokers, such as Sharekhan, offer its clients regular updates on

companies, multiple means to transact and customer service

support.

D. Depository fees: Since most of the shares exist in a

dematerialized form, every time you buy or sell shares the

transactions are being noted by your DP. The DPs normally levy a

charge which is an annual charge or a charge on each

transaction.

Risks ---the only disadvantage in investing in shares:

There are two types of risk associated with this kind of

investment: company specific risk and market risk.

Set of risks that deals with a company and its sector are referred

to as company specific risk.

Examples of company specific risk: bad management, bad

marketing strategies, sector disturbances that have an impact on

industry etc.

External factors (economic, global factors) that affect the market

as a whole are referred to as market risk.

Examples of market risk: political instability, high inflation, rupee

depreciation, rising interest rates, global incidents like wars and

disasters that throttle the nation's economy etc.

How company specific risk can be identified?

With careful scrutiny and proper homework, it might be easy to

identify and be forewarned of the risks a company may be

carrying. Specifically check out for the mergers and acquisitions

that do not have a real synergy or are a nightmare after

reconciliation (A O L - Time Warner, Hewlett Packard-Compaq).

Also is suspicious of diversifications that do not really add value to

a company's core offering. A third kind of risk would be with the

companies that have bet their stakes on a single product offering

and are high on debt. Likewise companies that depend on

research could be prone to higher risk, if the research doesn't

come to fruition.

How to identify sector driven risk?

If steel prices rise, auto companies get affected. If low cost

Chinese products invade the country's market, then local fast

moving consumer goods companies might find no takers for their

products. The changing nature of the industry itself may lead to

dipping stock prices; a print publication may see revenue loss if

everyone moves to reading on the Internet.

How to predict market risk?

It is difficult to predict market risks. The only thing we can say

here is that start noticing all the small signs early. If the election

results are feared to lead to a fall in the stock market, notice the

signals beforehand. Read Sebi's bulletins and track companies

whose shares prices are very volatile.

How people can minimize their risk and maximize their

return?

Buy when stocks are falling, sell when these are rising. This works

well when you are a long-term investor and there is an extended

bear or Bull Run. Don't try to second guess or predict that the

market will fall today and rise tomorrow. Even seasoned investors

cannot do that!

2. Don't try to guess the market's favorites

Your instincts might tell you that pharma or technology stocks are

hot due to certain policies or events, but remember millions of

investors have already guessed that and bought these stocks. The

prices of these stocks would therefore be at a higher level when

you buy them. Instead focus on the long term and don't get

swayed by short-term events.

3. Aim for the long haul

Short-term investing is prone to higher risks. When investing in

stocks, aim to get good returns after a period of three to five

years at the minimum. Also churn your portfolio periodically and

based on the progress that a company makes in a quarter or in

six months, decide whether to hold the stock or get out of it.

4. Avoid hot tips

You may have overheard some news about a stock or your friend

may advise that a particular stock is all geared to move up. Avoid

such tips like the plague and your investments will remain safe.

5. Blue-chips are safe bets

Blue-chip companies are there because they have done well in

the past and have a high market capitalization. It is a likely guess

that they will maintain their track record and give you higher

returns even in future. Therefore invest in companies that have a

good track record.

6. Slow and steady stream of investments

Set aside a certain portion of your earnings every month and

invest that sum in shares irrespective of the market conditions.

This way, over a period of time you can amass a substantial

number of shares of the stocks in your portfolio.

7. Think portfolio

Don't put all your earnings in a single stock. Try to have a diverse

portfolio of stocks. This way even if one stock doesn't do well, you

are still well protected. Also invest across sectors, since any

problem in one sector would affect all stocks in the sector. As a

thumb rule, if you have investments of up to Rs50, 000 invest in

two to three stocks. For about Rs150, 000 invest in three to five

stocks, for around Rs500, 000 have five to seven stocks and

around ten stocks for higher amounts.

8. Don’t invest all your savings

Always maintain a core set of reserves. You should never touch

these reserves for investing, so that even in the worst case you

still have some money. Typically these reserves should be your

salary of about six months.

9. Be level-headed

Invest wisely, don't get swayed by rumors and allow Sharekhan to

be your guide at all times. Investment success won't happen

overnight, so avoid overreacting to short term market swings.

Mutual Funds are essentially investment vehicles where people

with similar investment objective come together to pool their

money and then invest accordingly. Each unit of any scheme

represents the proportion of pool owned by the unit holder

(investor).

Mutual Funds in India are financial instruments. These funds are

collective investments which gather money from different

investors to invest in stocks, short-term money market financial

instruments, bonds and other securities and distribute the

proceeds as dividends. The Mutual Funds in India are handled by

Fund Managers, also referred as the portfolio managers. The

Securities Exchange Board of India regulates the Mutual Funds In

India. The share value of the Mutual Funds in India is known as

net asset value per share (NAV). The NAV is calculated on the

total amount of the Mutual Funds in India, by dividing it with the

number of shares issued and outstanding shares on daily basis.

MUTUAL FUNDS IN INDIA – ADVANTAGES:

The Mutual Funds in India offer flexibility by means of

dividend reinvestment, systematic investment plans and

systematic withdrawal plans.

Mutual funds:

These funds are available in small units, so they are

affordable to the small investors.

The fees charged for to the custodial, brokerage and others

services are very low in case of Mutual Funds in India.

These funds have the option of redeeming or withdrawing

money at any point of time.

The Mutual Funds in India have low risk as it is managed

professionally.

Like most developed and developing countries the mutual fund

cult has been catching on in India. The important reasons for this

interesting occurrence are:

Mutual funds make it easy and less costly for investors to

satisfy their need for capital growth, income and/or income

preservation.

Mutual fund brings the benefits of diversification and money

management to the individual investor, providing an

opportunity for financial success that was once available only

to a select few.

Understanding Mutual funds is easy as it's such a straightforward

concept. A mutual fund is a company that pools the money of

many investors, its shareholders to invest in a variety of different

securities.

Investments may be in stocks, bonds, money market securities or

some combination of these.

For the individual investor, mutual funds propose the benefit of

having someone else manage your investments and diversify

your money over many different securities that may not be

available or affordable to you otherwise. A mutual fund, by its

very nature, is diversified -- its assets are invested in many

different securities. Beyond that, there are many different types

of mutual funds with different objectives and levels of growth

potential, furthering your odds to diversify.

Benefits of

mutual funds:

Investing in mutual has various benefits, which makes it an ideal

investment avenue.

Professional investment management :

One of the primary benefits of mutual funds is that an investor

has access to professional management. A good investment

manager is certainly worth the fees you will pay. Good mutual

fund managers with an excellent research team can do a better

job of monitoring the companies they have chosen to invest in

than you can, unless you have time to spend on researching the

companies you select for your portfolio. That is because Mutual

funds hire full-time, high-level investment professionals. Funds

can afford to do so as they manage large pools of money. The

managers have real-time access to crucial market information

and are able to execute trades on the largest and most cost-

effective scale. When you buy a mutual fund, the primary asset

you are buying is the manager, who will be controlling which

assets are chosen to meet the funds' stated investment

objectives.

Diversification :

A crucial element in investing is asset allocation. It plays a very

big part in the success of any portfolio. However, small investors

do not have enough money to properly allocate their assets. By

pooling your funds with others, you can quickly benefit from

greater diversification. Mutual funds invest in a broad range of

securities. This limits investment risk by reducing the effect of a

possible decline in the value of any one security. Mutual fund unit-

holders can benefit from diversification techniques usually

available only to investors wealthy enough to buy significant

positions in a wide variety of securities.

Low Cost :

A mutual fund let's you participate in a diversified portfolio for as

little as Rs.5, 000, and sometimes less.

Convenience and Flexibility :

Investing in mutual funds has its own convenience. While you

own just one security rather than many, you still enjoy the

benefits of a diversified portfolio and a wide range of services.

Fund managers decide what securities to trade collect the interest

payments and see that your dividends on portfolio securities are

received and your rights exercised. It also uses the services of a

high quality custodian and registrar. Another big advantage is

that you can move your funds easily from one fund to another

within a mutual fund family.

Liquidity :

In open-ended schemes, you can get your money back promptly

at net asset value related prices.

Transparency :

Regulations for mutual funds have made the industry very

transparent. You can track the investments that have been made

on your behalf and the specific investments made by the mutual

fund scheme to see where your money is going. In addition to

this, you get regular information on the value of your investment.

Variety :

There is no shortage of variety when investing in mutual funds.

You can find a mutual fund that matches just about any investing

strategy you select. There are funds that focus on blue-chip

stocks, technology stocks, bonds or a mix of stocks and bonds.

The greatest challenge can be sorting through the variety and

picking the best for you.

Mutual fund risks:

Having understood the basics of mutual funds the next step is to

build a successful investment portfolio. Before you can begin to

build a portfolio, one should understand some other elements of

mutual fund investing and how they can affect the potential value

of your investments over the years. The first thing that has to be

kept in mind is that when you invest in mutual funds, there is no

guarantee that you will end up with more money when you

withdraw your investment than what you started out with.

That is the potential of loss is always there. Even so, the

opportunity for investment growth that is possible through

investments in mutual funds far exceeds that concern for most

investors. Here's why.

At the cornerstone of investing is the basic principal that the

greater the risk you take, the greater the potential reward. Risk

then, refers to the volatility -- the up and down activity in the

markets and individual issues that occurs constantly over time.

This volatility can be caused by a number of factors -- interest

rate changes, inflation or general economic conditions. It is this

variability, uncertainty and potential for loss, that causes

investors to worry. We all fear the possibility that a stock we

invest in will fall substantially. Different types of mutual funds

have different levels of volatility or potential price change, and

those with the greater chance of losing value are also the funds

that can produce the greater returns for you over time. You might

find it helpful to remember that all financial investments will

fluctuate. There are very few perfectly safe havens and those

simply don't pay enough to beat inflation over the long run.

Number of available options:

Diversification

Professional Management

Potential of returns

Liquidity

Besides these important features, mutual funds also offer several

other key traits.

Important among them are:

Well Regulated

Transparency

Flexible, Affordable and a Low Cost affair

Structure of the Indian mutual fund industry:

The Indian mutual fund industry is dominated by the Unit Trust of

India, which has a total corpus of Rs. 700bn collected from more

than 20 million investors. The UTI has many schemes in all

categories i.e. equity, balanced, income etc with something open

ended and some being closed ended. The unit scheme 1964

commonly referred to as US 64, which is a balanced fund, is the

biggest scheme with a corpus of about Rs. 200bn. UTI was floated

by financial institution and is govern by a special act of

parliament. Most of its investors believe that the UTI is

government owned and controlled, which, while legally

uncorrected, is true for all practical purposes.

Recent trends in mutual fund industry:

The most important trend in the mutual fund industry is the

aggressive expansion of the foreign owned mutual fund

companies and the decline of the companies floated by

nationalized banks and smaller private sector players. Many

nationalized banks got into the mutual fund business in the early

nineties and got off to a good start due to the stock market boom

prevailing them. These banks did not really understand the

mutual fund business and they just viewed it as another kind of

banking activity. Few hired specialized staff and generally chose

to transfer staff from the parent organizations. The performance

of most of the schemes floated by these funds was not good.

Some schemes had offered guaranteed returns and their parent

organizations had to bail out these AMCs by paying large amounts

of money as the difference between the guaranteed and actual

returns. The service levels were also very bad. Most of these

AMCs have not been to retain staff, float new schemes etc, and it

is doubtful whether, barring a few exceptions, they have serious

plans of continuing the activity in a major way.

The foreign owned companies have deep pockets and have come

in here with the expectation of a long haul. They can be credited

with introducing many new practices such as new product

innovation, sharp Improvement in service standards and

disclosure, usage of technology, broker education and support

etc. In fact, they have forced the industry to upgrade itself and

service levels of organizations like UTI have improved

dramatically in the last few years in response to the competition

provided by these.

Schemes of a Mutual Fund:

• The asset management company shall launch no scheme unless

the trustees approve such scheme and a copy of the offer

document has been filed with the Board.

• Every mutual fund shall along with the offer document of each

scheme pay filing fees.

• The offer document shall contain disclosures which are

adequate in order to enable the investors to make informed

investment decision including the disclosure on maximum

investments proposed to be made by the scheme in the listed

securities of the group companies of the sponsor A close-ended

scheme shall be fully redeemed at the end of the maturity period.

“Unless a majority of the unit holders otherwise decide for its

rollover by passing a resolution”.

Rules Regarding Advertisements:

• The offer document and advertisement materials shall not be

misleading or contain any statement or opinion, which are

incorrect or false.

Investment Objectives and Valuation Policies:

• The price at which the units may be subscribed or sold and the

price at which such units may at any time be repurchased by the

mutual fund shall be made an available to the investors.

Restrictions on Investments:

• A mutual fund scheme shall not invest more than 15% of its

NAV in debt instrument issued by a single issuer, which are rated

not below investment grade by a credit rating agency authorized

to carry out such activity under the Act. Such investment limit

may be extended to 20% of the NAV of the scheme with the prior

approval of the Board of Trustees and the Board of Asset

Management Company.

• A mutual fund scheme shall not invest more than 10% of its

NAV in unrated debt instruments issued by a single issuer and the

total investment in such instruments shall not exceed 25% of the

NAV of the scheme. All such investments shall be made with the

prior approval of the Board of Trustees and the Board of Asset

Management Company.

• No mutual fund under all its schemes should own more than ten

percent of any company’s paid up capital carrying voting rights.

• Such transfers are done at the prevailing market price for

quoted instruments on spot basis. The securities so transferred

shall be in conformity with the investment objective of the

scheme to which such transfer has been made.

So, if we draw a graph of table-2, then we get,

Analysis

fixed deposit stock market mutual funds insurance0

5

10

15

20

25

30

35

40

most prefered investment option

investment options

num

ber o

f peo

ple

Therefore, we can easily see from the chart that majority of

people like to invest in the stock market, even though market

situation is not so good and there is so much risk available.

Now, if we see what % of people like to invest in which

investment option in the following pie chat, then,

fixed deposit25%

stock market36%

mutual funds21%

insurance18%

% of people's preference

So, we can see from the above pie chart that 36% people like to

invest in the stock market, irrespective of the volatility of the

market. Then comes fixed deposit with 25% people likes to play

safe, as it is the safest option available in the market.

Now, let us see which age group is more prone to play safe, which

is, like to invest in fixed deposits.

18-24 24-30 30-40 40 above0

1

2

3

4

5

6

7

investment in fixed deposit

age group

num

ber o

f peo

ple

Therefore, we can see from the above chart that people of age

group 24-30 and above 40 years don’t like to take much risk may

be because these are the settlement periods of their life.

Now, let us see which age group likes to take the highest possible

risk in the following chart.

18-24 24-30 30-40 40 above0

1

2

3

4

5

6

investment in stock mrket

age group

num

ber o

f peo

ple

So, we can see from the above chart that people of age group 30-

40 likes to take more risk, as they became more financially stable

by that age and have fewer responsibilities.

Now, we will see that which age group likes to take moderate risk

in the following chart.

18-24

24-30

30-40

40 above

0 1 2 3 4 5 6

investment in mutual funds

number of people

age

grou

p

So, we can see that people of age group 18-24 like to invest in

mutual fund, as it has moderate risk.

Lastly, in the following chart, we will see that which age group

likes to take very less risk and wants higher return in the long

term.

18-24 24-30 30-40 40 above0

1

2

3

4

5

6

7

investment in insurance

age group

num

ber o

f peo

ple

So, we can see from the above chart that people of age group 30-

40 more likely to invest in insurance, as by that time they think

about the future and long term return.

Conclusions & Recommendations:

Therefore from the survey, whatever I got, here is the gist of all of

them:

People are more inclined to invest in the stock market,

irrespective of the market scenario and the level of risk.

Majority of the people wants higher return in short period of

time that is why they prefer to invest in stock markets and

mutual funds rather than any other form of investments.

People between ages 30-40 think about long term returns as

well as higher return in short period of time that is why they

invest in stock market for short period of time and in

insurance for long term return.

People between ages 18-24 don’t have much money to

invest and they can’t take higher risk, so they invest in

mutual funds which are of moderate risk.

People between ages 24-30 wants to be financially stable

that is why they don’t like to take risk at all. So, they invest

in the bank’s fixed deposit scheme which has almost no risk

and lower return.

Bibliography

www.ashlarindia.com

www.moneycontrol.com

www.investsmartindia.com

www.insurancejournal.com

www.irdaindia.org

IRDA book

Various bank’s websites

http://www.irdaindia.org/

http://www.insurancejournal.com/

http://www.investsmartindia.com/

http://www.moneycontrol.com/

Documents

PROJECT REPORT of Marketing Strategies of Ashlar Group Bhupendra Dixit Anand Engg. College