a study on investment horizons of investors in india

8/12/2019 A Study on Investment Horizons of Investors in India

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A STUDY ON INVESTMENT HORIZONS OF INVESTORS IN INDIA

PROJECT REPORTON

A STUDY ON INVESTMENTS HORIZONS OF

INVESTORS IN INDIA

In partial fulfillment for the award of degree

of Master of Business Administration (MBA)

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THE E(ECUTIVE SUMMARY

PROJECT UNDERTAKEN BY ME

The project studied "# me in ,arv# Stock %roking! handigarh! was A STUDY ON

INVESTMENT AUDIT OF INVESTORS OF INDIA.

K'r)* S+oc, -ro,i / !imi+%0 is ndia2s leading capital markets compan# with 'll3 ndia

Presence and an e*tensive client "ase. ,arv# Stock %roking possesses state of the art trading

platform! "est "roking practices and is the pioneer in trading product innovations.

HO IT AS UNDERTAKEN

' surve# was conducted "# me among the investors. &an#3a3times! stock market

investors take their investment calls "ased on certain prejudiced views which are often erroneous

in nature. owever! such investors are reluctant to stop following the m#ths the# traditionall#

"elieve in! unless the#2re e*plained as to wh# their views are illogicall# supported. t is

important that investors keep a realistic view of the market terminologies.

'n appointment was fi*ed with the investors of the respected areas in which +1%ir )i%2

&oi + 2'3 3+u0i%04 c%r+'i 5u%3+io 3 2%r% '3,%0 r%/'r0i / +1% I )%3+m% + A)% u%3

A)'il'-l% '+ +1% S+oc, M'r,%+ ; 'c+i)i+i%3 'r% +o -% i clu0%0 -* +1% com&' * &ro0uc+3 i

r%/'r0 +o these benefits; 6 +o 21'+ %7+% + i+ %ff%c+3 +1% l%)%l of 3'+i3f'c+io and how far it is

"eneficial for the investors. There views helped me a lot to practicall# understand m# project.

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CHAPTER 8

INTRODUCTION

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8. INDIAN STOCK MARKET

8.8 I +ro0uc+io

ndian Stock &arkets is one of the oldest in 'sia. ts histor# dates "ack to nearl# )66 #earsago. The earliest records of securit# dealings in ndia are meager and o"scure. T1% E'3+ I 0i'

Com&' * was the dominant institution in those da#s and "usiness in its loan securities used to

"e transacted towards the close of the eighteenth centur#.

%# 17068s "usiness on corporate stocks and shares in %ank and otton presses took place in

%om"a#. Though the trading list was "roader in 1709! there were onl# half a do(en "rokers

recogni(ed "# "anks and merchants during 1746 and 1756. The 17568s witnessed a rapid

development of commercial enterprise and "rokerage "usiness attracted man# men into the

field and "# 17:6 the num"er of "rokers increased into :6. n 17:63:1 the 'merican ivil

/ar "roke out and cotton suppl# from United States to Europe was stopped; thus! the 9S1'r%

M' i'9 in ndia "egan. The num"er of "rokers increased to a"out )66 to )56.

't the end of the 'merican ivil /ar! the "rokers who thrived out of ivil /ar in 17alal Street? where the# would

convenientl# assem"le and transact "usiness. n 177

the :N'+i)% S1'r% ' 0 S+oc, Bro,%r39 A33oci'+io $4 which is alternativel# known as #T1%

S+oc, E7c1' /%: . n 1795! the Stock E*change ac@uired a premise in the same street and it

was inaugurated in 1799. Thus! the Stock E*change at %om"a# was consolidated.

The ndian stock market has "een assigned an important place in financing the ndian

corporate sector. The principal functions of the stock markets areA

ena"ling mo"ili(ing resources for investment directl# from the investors

providing li@uidit# for the investors and monitoring.

>isciplining compan# management.

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T1%r% 'r% +2o ,i 03 of &l'*%r3 i NSE.OVERVIE OF THE RE"U!ATORY FRAME ORK OF THE CAPITA!MARKET IN INDIA

ndia has a financial s#stem that is regulated "# independent regulators in the sectors of

"anking! insurance! capital markets and various service sectors. The ndian Binancial s#stem

is regulated "# two governing agencies under the &inistr# of Binance. The# are

1. R%3%r)% B' , of I 0i'

The R% was set up in 1905 and is the central "ank of ndia. t regulates the financial

and "anking s#stem. t formulates monetar# policies and prescri"es e*change control

norms.

). T1% S%curi+i%3 E7c1' /% Bo'r0 of I 0i'

The overnment of ndia constituted SE% on 'pril 1)! 1977! as a non3statutor# "od#

to promote orderl# and health# development of the securities market and to provide

investor protection.

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D%&'r+m% + Eco omic Aff'ir3

The capital markets division of the >epartment of Economic 'ffairs regulates capital markets

and securities transactions.

The capital markets division has "een entrusted with the responsi"ilit# of assisting the

overnment in framing suita"le policies for the orderl# growth and development of the

securities markets with the SE% ! R% and other agencies. t is also responsi"le for the

functioning of the Unit Trust of ndia =UT ? and Securities and E*change %oard of ndia

=SE% ?.

The principal aspects that are dealt with the capital market division areA

Polic# matters relating to the securities market

Polic# matters relating to the regulation and development and investor protection of the

securities market and the de"t market.

Organi(ational and operational matters relating to SE%

T1% C'&i+'l M'r,%+ i3 /o)%r %0 -*J>riving -icenseJ PassportJ %ank statementor pass "ook sealed and attestation "# "ank officialJ %S+- landline "ill.

' crossed he@ue favoring G,arv# Stock %rokingH. Of the re@uired amount. The amount

for >emat as well as trading will "e Rs. 966J3=free >emat K966 Trading 'ccount? the

minimum amount "eing Rs. 966 a che@ue can "e given for a larger amount.

op# of P'+ ard is mandator#.

Registration ,it

>S- >emat ,it%ank and address proof declaration.

P'+ name discrepanc# form.

These documents ma# not "e consumer friendl# "ut it is to avoid illegal transaction and to

prevent "lack mone# this ensures that mone# invested is accounted.

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.8 T%c1 i5u%3 ' 0 I 3+rum% +3 for Tr'0i /

The various techni@ues that are availa"le in the hands of a client areA3

1. >eliver#). ntrada#

0. Buture

4. Borwards

5. Options

:. swaps

B'3ic R%5uir%m% + for 0oi / Tr'0i /

Trading re@uires Opening a >emat account. >emat refers to a demateriali(ed account.

Lou need to open a >emat account if #ou want to "u# or sell stocks. So it is just like a "ank

account where actual mone# is replaced "# shares. /e need to approach the >epositor#

Participants =>P! the# are like "ank "ranches?! to open >emat account.

' 0%&o3i+or* is a place where the stocks of investors are held in electronic form. The

depositor# has agents who are called 0%&o3i+or* &'r+ici&' +3 =>Ps?.

Think of it like a "ank. The head office where all the technolog# rests and details of all

accounts held is like the depositor#. 'nd the >Ps are the "ranches that cater to individuals.

There are onl# two depositories in ndia M

The +ational Securities >epositor# -td =+S>-? and the

entral >epositor# Services -td = >S-?.

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model! capacit# to "ear the risk! the present re@uirements and lot more. 's an investor progresses

on hisJher life stage and as hisJher financial goals change! so does the uni@ue investor profile.

Economic development of a countr# depends upon its investment. The emerging economic

environment of competitive markets signif#ing customer2s sovereignt# has profound

implications for their savings and investment. nvestment means person2s commitments towards

his future.

.8 INVESTMENT

The word NinvestmentN can "e defined in man# wa#s according to different theories and

principles. t is a term that can "e used in a num"er of conte*ts. owever! the different meanings

of NinvestmentN are more alike than dissimilar.

enerall#! investment is the application of mone# for earning more mone#. nvestment also

means savings or savings made through dela#ed consumption.

'ccording to economics! investment is the utili(ation of resources in order to increase income or

production output in the future.

'n amount deposited into a "ank or machiner# that is purchased in anticipation of earning

income in the long run are "oth e*amples of investments. 'lthough there is a general "road

definition to the term investment! it carries slightl# different meanings to different industrialsectors.

'ccording to economists! investment refers to an# ph#sical or tangi"le asset! for e*ample! a

"uilding or machiner# and e@uipment.

On the other hand! finance professionals define an investment as mone# utili(ed for "u#ing

financial assets! for e*ample stocks! "onds! "ullion! real properties! and precious items.

'ccording to finance! the practice of investment refers to the "u#ing of a financial product or an#

valued item with an anticipation that positive returns will "e received in the future.

The most important feature of financial investments is that the# carr# high market li@uidit#. The

method used for evaluating the value of a financial investment is known as valuation.

'ccording to "usiness theories! investment is that activit# in which a manufacturer "u#s a

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ph#sical asset! for e*ample! stock or production e@uipment! in e*pectation that this will help the

"usiness to prosper in the long run.

.8.8 C1'r'c+%ri3+ic3 of ' i )%3+m% + 0%ci3io E33% +i'l3 of I )%3+m% +

Essentials of investment refer to wh# investment! or the need for investment! is [email protected] investment strateg# is a plan! which is created to guide an investor to choose the mostappropriate investment portfolio that will help him achieve his financial goals within a particular

period of time.

'n investment strateg# usuall# involves a set of methods! rules! and regulations! and is

designed according to the e*change or compromise of the investor8s risks and returns.

' num"er of investors like to increase their earnings through high3risk investments! whilst others

prefer investing in assets with minimum risk involved. owever! the majorit# of investors

choose an investment strateg# that lies in the middle.

nvestment strategies can "e "roadl# categori(ed into the following t#pesA 'ctive strategiesA One of the principal active strategies is market timing =an investor is

a"le to move into the market when it is on the low and sell the stocks when the market is

on the high?! which is applied for ma*imi(ing #ields.

Passive strategiesA Bre@uentl# implemented for reducing transaction costs.

One of the most popular strategies is the "u# and hold! which is "asicall# a long term

investment plan. The idea "ehind this is that stock markets #ield a commenda"le rate of return in

spite of stages of fluctuation or downfall. nde*ing is a strictl# passive varia"le of the "u# and

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hold strateg# and! in this case! an investor purchases a limited num"er of ever# share e*isting in

the stock market inde*! for e*ample the Standard and Poor 566 nde*! or more pro"a"l# in an

inde* fund! which is a form of a mutual fund.

'dditionall#! as the market timing strateg# is not applica"le for small3scale investors!

it is advisa"le to appl# the "u# and hold strateg#. n case of real estate investment the retail and

small3scale investors appl# the "u# and hold strateg#! "ecause the holding period is normall#

e@ual to the total span of the mortgage loan.

.> PRINCIP!ES OF INVESTMENT

Five b si! "#in!i"$es serve as the foundation for the investment approach. The# are as followsA

Focu3 o +1% lo / +%rm

There is su"stantive empirical evidence to suggest that e@uities provide the ma*imum risk

adjusted returns over the long term. n an attempt to take full advantage of this phenomenon!

investments would "e made with a long term perspective.

I )%3+m% +3 co f%r &ro&or+io '+% o2 %r31i&

The approach to valuing a compan# is similar to making an investment in a "usiness.

Therefore! there is a need to have a comprehensive understanding of how the "usiness

operates.

M'i +'i ' m'r/i of 3'f%+*

The "enchmark for determining relative attractiveness of stocks would "e the intrinsic value

of the "usiness. The nvestment &anager would endeavor to purchase stocks that represent a

discount to this value! in an effort to preserve capital and generate superior growth.

M'i +'i ' -'l' c%0 ou+loo, o +1% m'r,%+

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The investment portfolio would "e regularl# monitored to understand the impact of changes

in "usiness and economic trend as well as investor sentiment. /hile short3term market

volatilit# would affect valuations of the portfolio! this is not e*pected to influence the

decision to own fundamentall# strong companies.

Di3ci&li %0 '&&ro'c1 +o 3%lli /

The decision to sell a holding would "e "ased on either the anticipated price appreciation

"eing achieved or "eing no longer possi"le due to a change in fundamental factors affecting

the compan# or the market in which it competes! or due to the availa"ilit# of an alternative

that! in the view of the nvestment &anager! offers superior returns.

n order to implement the investment approach effectivel#! it would "e important to

periodicall# meet the management face to face. This would provide an understanding of their

"road vision and commitment to the long3term "usiness o"jectives. These meetings would

also "e useful in assessing ke# determinants of management @ualit# such as orientation to

minorit# shareholders! a"ilit# to cope with adversit# and approach to allocating surplus cash

flows.

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nvestors assume that these forms of investment would furnish them with some revenue "# wa#

of positive cash flow.

These assets can also affect the particular investor positivel# or negativel# depending on the

alterations in their respective values.

nvestments are often made through the intermediaries who use mone# taken from individuals to

invest. onse@uentl# the individuals are regarded as having claims on the particular

intermediar#.

t is common practice for the particular intermediaries to have separate legal procedures of their

own. Bollowing are some intermediariesA

%anks

&utual Bunds

Pension Bunds

nsurance ompanies

ollective nvestment Schemes

nvestment lu"s

nvestment in the domain of personal finance signifies funds emplo#ed in the purchasing of

shares! investing in collective investment plans or even purchasing an asset with an element of

capital risk. n the field of real estate! investments impl# "u#ing of propert# with the sole

purpose of generating income.

nvestment in residential real estate could "e made in the form of "u#ing housing propert#! while

investments in commercial real estate is made "# owning commercial propert# for corporate

purposes that are geared to generate some amount of revenue.

I )%3+m% +

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The mone# #ou earn is partl# spent and the rest saved for meeting future e*penses. nstead of

keeping the savings idle #ou ma# like to use savings in order to get return on it in the future. This

is called nvestment.

1* 31oul0 o % i )%3+

One needs to invest toA

earn return on #our idle resources

generate a specified sum of mone# for a specific goal in life

make a provision for an uncertain future

.? VARIOUS OPTIONS AVAI!AB!E FOR INVESTMENT

O % m'* i )%3+ i

P1*3ic'l '33%+3 like real estate! goldJjewelr#! commodities etc. or

Fi ' ci'l '33%+3 such as fi*ed deposits with "anks! small saving instruments with post

offices! insuranceJ providentJ

P% 3io fu 0 %+c. or securities market related instruments like shares! "onds! de"entures

etc.

V'riou3 S1or+=+%rm fi ' ci'l o&+io 3 ')'il'-l% for i )%3+m% +.

%roadl# speaking! savings "ank account! mone# marketJli@uid funds and fi*ed deposits with

"anks ma# "e considered as short3term financial investment options.

S')i /3 B' , Accou + is often the first "anking product people use! which offers low interest

=4 35 p.a.?! making them onl# marginall# "etter than fi*ed deposits.

Fi7%0 D%&o3i+3 2i+1 B' ,3 are also referred to as term deposits and minimum investment period for "ank B>s is 06 da#s. Bi*ed >eposits with "anks are for investors with low risk

appetite! and ma# "e considered for :31) months investment period as normall# interest on less

than : months "ank B>s is likel# to "e lower than mone# market fund returns.

V'riou3 !o /=+%rm fi ' ci'l o&+io 3 ')'il'-l% for i )%3+m% +.

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Po3+ Offic% S')i /3< Post Office &onthl# ncome Scheme is a low risk saving instrument!

which can "e availed through an# post office. t provides an interest rate of 7 per annum!

which is paid monthl#.

&inimum amount! which can "e invested! is Rs. 1!666J3 and additional investment in multiples

of 1!666J3. &a*imum amount is Rs. 0! 66!666J3 =if Single? or Rs. :!66!666J3 =if held jointl#?

during a #ear. t has a maturit# period of : #ears.

' "onus of 16 is paid at the time of maturit#. Premature withdrawal is permitted if deposit is

more than one #ear old. ' deduction of 5 is levied from the principal amount if withdrawn

prematurel#; the 16 "onus is also denied.

Pu-lic Pro)i0% + Fu 0< ' long term savings instrument with a maturit# of 15 #ears and interest

pa#a"le at 7 per annum compounded annuall#. ' PPB account can "e opened through anationali(ed "ank at an#time during the #ear and is open all through the #ear for depositing

mone#. Ta* "enefits can "e availed for the amount invested and interest accrued is ta*3free. '

withdrawal is permissi"le ever# #ear from the seventh financial #ear of the date of opening of the

account and the amount of withdrawal will "e limited to 56 of the "alance at credit at the end

of the 4th #ear immediatel# preceding the #ear in which the amount is withdrawn or at the end of

the preceding #ear whichever is lower the amount of loan if an#.

Com&' * Fi7%0 D%&o3i+3< These are short3term =si* months? to medium3term =three to five

#ears? "orrowings "# companies at a fi*ed rate of interest which is pa#a"le monthl#! @uarterl#!

semi3annuall# or annuall#.

The# can also "e cumulative fi*ed deposits where the entire principal along with the interest is

paid at the end of the loan period. The rate of interest varies "etween :39 per annum for

compan# B>s. The interest received is after deduction of ta*es

Bo 03< t is a fi*ed income =de"t? instrument issued for a period of more than one #ear with the

purpose of raising capital.

The central or state government! corporations and similar institutions sell "onds. ' "ond is

generall# a promise to repa# the principal along with a fi*ed rate of interest on a specified date!

called the Maturity Date .

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Mu+u'l Fu 03< These are funds operated "# an investment compan# which raises mone# from

the pu"lic and invests in a group of assets =shares! de"entures etc.?! in accordance with a stated

set of o"jectives. t is a su"stitute for those who are una"le to invest directl# in e@uities or de"t

"ecause of resource! time or knowledge constraints. %enefits include professional mone#

management! "u#ing in small amounts and diversification. &utual fund units are issued and

redeemed "# the Fu 0 M' '/%m% + Com&' * "ased on the fund8s net asset value =+'I?!

which is determined at the end of each trading session. +'I is calculated as the value of all the

shares held "# the fund! minus e*penses! divided "# the num"er of units issued.

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holdings allow individual investors to diversif# their holdings and avoid potential loss.

Segregated funds! on the other hand! are used "# large private investors who wish to hold their

shares directl# rather than in a mutual fund.

The prime advantage in investing in a pooled fund is that it gives the individual access to

professional advice through the fund manager. The major disadvantages involved are that the

investors must pa# a fee to the fund managers and that the diversification of the fund ma# not "e

appropriate for all investors. n those cases! the investors ma# over3diversif# "# holding several

funds! thus reducing the risk.

Mu+u'l fu 03 are supposed to "e the "est mode of investment in the capital market since the#

are ver# cost "eneficial and simple! and do not re@uire an investor to figure out

which securities to invest into. ' mutual fund could simpl# "e descri"ed as a financial mediumused "# a group of investors to increase their mone# with a predetermined investment.

The responsi"ilit# for investing the pooled mone# into specific investment channels lies with the

fund manager of said mutual fund.

Therefore investment in a mutual fund means that the investor has "ought the shares of the

mutual fund and has "ecome a shareholder of that fund. >iversification of investment nvestors

are a"le to purchase securities with much lower trading costs "# pooling mone# together in a

mutual fund rather than tr# to do it on their own. owever the "iggest advantage that mutual

funds offer is diversification which allows the investor to spread out his mone# across a wide

spectrum of investments. Therefore when one investment is not doing well! another ma# "e

doing taking off! there"# "alancing the risk to profit ratio and considera"l# covering the overall

investment.

The "est form of diversification is to invest in multiple securities rather than in just one securit#.

&utual funds are set up with the precise o"jective of investing in multiple securities that can run

into hundreds. t could take weeks for an investor to investigate on this kind of scale! "ut with

investment in mutual funds all this could "e done in a matter of hours.

T*&%3 of Mu+u'l Fu 03 Mo0% of I )%3+m% +

&utual Bund T#pes nvestment Bunds

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'merican &utual Bunds

%&O &utual Bunds

anadian &utual Bunds

Bidelit# &utual Bunds

artford &utual Bunds

nvesting in &utual Bunds

Top &utual Bunds

>#namic &utual Bund

$anus &utual Bunds

Ianguard &utual Bunds

&utual Bunds Performance

.?. DEBENTURES< = n financial conte*t! >e"entures are >e"t nstruments issued for a

long term "# governments and "ig institutions for rising funds. The >e"enture has some

resem"lances to "onds "ut the securiti(ation terms and conditions are different for >e"entures

compared to a "ond.

' >e"enture is commonl# considered as insecure "ecause there is no pledge or lien on particular

assets. +evertheless! a >e"enture is secured "# all the assets which are otherwise not pledged.

f there is a "ankruptc#! >e"enture holders will "e counted as general creditors.

The "enefit that the issuer enjo#s from issuing a de"enture is that the# keep particular assets free

of encum"rances so the option is open to issue them for future financing.

Usuall#! >e"entures are freel# negotia"le de"t instruments. The >e"enture holder works as a

lender to the >e"enture issuer.

n return! the >e"enture issuer pa#s interest to the >e"enture holders as it is paid in case of a

loan. n practical application! the difference "etween a %ond and a >e"enture is not alwa#s kept.

n some instances! >e"entures are also referred to as %onds and vice3versa.

TYPES OF DEBENTURES

onverti"le >e"enture

+on3 onverti"le >e"enture Participative >e"enture

+on3 Participative >e"enture

Redeema"le >e"enture

rredeema"le >e"enture

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.?. BOND MARKET< = The -o 0 m'r,%+ is a financial market that acts as a platform

for the "u#ing and selling of de"t securities. The "ond market is a part of the capital market

serving platform to collect fund for the pu"lic sector companies! governments! and corporations.There are a num"er of "ond indices that reflect the performance of a "ond market.

The "ond market can also called the de"t market! credit market! or fi*ed income market. The si(e

of the current international "ond market is estimated to "e Q45 trillion. The major "ond market

participants areA governments! institutional investors! traders! and individual investors.

'ccording to the specifications given "# the %ond &arket 'ssociation! there are five t#pes of

"ond markets.

The# areA orporate %ond &arket

&unicipal %ond &arket

overnment and 'genc# %ond &arket

Bunding %ond &arket

&ortgage %acked and ollaterali(ed >e"t O"ligation %ond &arket

.?.? S1'r% M'r,%+ I )%3+m% +

Shares are purchased and sold on the primar# and secondar# share markets. To invest in theshare market! investors ac@uire a call option! which is the right to "u# a share! or a put option!

which is the right to sell a share. n general! investors "u# put options if the# e*pect prices to

rise! and call options if the# e*pect prices to fall.. The value of a derivative depends on the value

of the underl#ing asset. The various classifications of derivatives relevant to share market

investment areA

Swap

Butures ontract Borward ontract

Option ontract

' forward contract is agreements "etween two parties purchase or sell a product in the future! at

a price determined now. This mutual agreement satisfies the profit motive of "oth the "u#er and

):
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seller! and the uncertainties and risks of price fluctuations in the future are a"orted. ' future

contract is different from a forward contract in the sense that the former re@uires the presence of

a third part# and the commitment for trade is simpl# notional.

%efore a share is chosen for investment! a technical anal#sis of the share is performed. The price

and volume of a share over a period of time are tracked and then a "usiness plan is constructed.

' fundamental anal#sis involves a close stud# of the compan# associated with the share! and its

performance over time. The fundamental anal#sis is important for the share market investor.

The price levels of a traded share are as followsA Opening PriceA This is the price at which the market opens. n other words! it is the price

of the first transaction. losing PriceA This is the price at the time of closing of the market or the price of the last

trade. ntra3>a# ighA This denotes the ma*imum price at which the share was traded in the

da#. ntra3>a# -owA This is the minimum price at which the share traded in the da#.

.?.G D%-+ I )%3+m% +3 e"t securities =in the form of non3converti"le de"entures! "onds! secured premium notes! (ero

interest "onds! deep discount "onds! floating rate "ond J notes! securitised de"t! pass through

certificates! asset "acked securities! mortgage "acked securities and an# other domestic fi*ed

income securities including structured o"ligations etc.? include! "ut are not limited to A

o >e"t o"ligations of the overnment of ndia! State and local overnments!

overnment 'gencies and statutor# "odies =which ma# or ma# not carr# a state J

central government guarantee?!

o Securities that have "een guaranteed "# overnment of ndia and State

overnments!

o Securities issued "# orporate Entities =Pu"lic J Private sector undertakings?!

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o Securities issued "# Pu"lic J Private sector "anks and development financial

institutions.

Mo %* M'r,%+ I 3+rum% +3 I clu0%

o ommercial Papers

o ommercial "ills

o Treasur# "ills

o overnment securities having an une*pired maturit# upto one #ear

o all or notice mone#

o ertificate of deposit

o

Usance "illso Permitted securities under a repo J reverse repo agreement

o 'n# other like instruments as ma# "e permitted "# R% J SE% from time to time

nvestments will "e made through secondar# market purchases! initial pu"lic

offers! other pu"lic offers! placements and right offers =including renunciation?

and negotiated deals. The securities could "e listed! unlisted! privatel# placed!

secured J unsecured! rated J unrated of an# maturit#.

The '& retains the fle*i"ilit# to invest across all the securities J instruments in de"t and mone#

market.

nvestment in de"t securities will usuall# "e in instruments which have "een assessed as Nhigh

investment gradeN "# at least one credit rating agenc# authori(ed to carr# out such activit# under

the applica"le regulations. n case a de"t instrument is not rated! prior approval of the %oard of

>irectors of Trustee and '& will "e o"tained for such an investment. nvestment in de"t

instruments shall generall# have a low risk profile and those in mone# market instruments shall

have an even lower risk profile. The maturit# profile of de"t instruments will "e selected inaccordance with the '& 8s view regarding current market conditions! interest rate outlook.

Pursuant to the SE% Regulations! the Scheme shall not make an# investment inA an# unlisted securit# of an associate or group compan# of the Sponsor; or

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an# securit# issued "# wa# of private placement "# an associate or group compan# of the

Sponsor; or The listed securities of group companies of the Sponsor which is in e*cess of )5 of the

net assets.

The Scheme ma# invest in other schemes managed "# the '& or in the schemes of an# other

mutual funds! provided it is in conformit# with the investment o"jectives of the Scheme and in

terms of the prevailing SE% Regulations. 's per the SE% Regulations! no investment

management fees will "e charged for such investments and the aggregate inter Scheme

investment made "# all the schemes of >B &utual Bund or in the schemes of other mutual

funds shall not e*ceed 5 of the net asset value of the >B &utual Bund.

'PTER )

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REI E/ OB

- TER'TURE

INTRODUCTION

Iarious studies on nvestment pattern C nvestment "ehavior of investors had "een conducted in

foreign countries. owever! in ndian conte*t! the num"er is @uite few. >epending on the various

issues of investment! the review has "een discussed in "rief as followsA

C1'rl%3 8 has anal#(ed that the astonishing growth in 'mericans8 stock portfolios in the

1996s has "een a major force "ehind the growth of consumer spending. This article reviews the

relationship "etween stock market movements and consumption. Using various econometric

techni@ues and specifications! the authors find that the propensit# to consume out of aggregate

household wealth has e*hi"ited insta"ilit# over the postwar period. The# also show that the

06


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d#namic response of consumption growth to an une*pected change in wealth is e*tremel# short3

lived! impl#ing that forecasts of consumption growth one or more @uarters ahead are not

t#picall# improved "# accounting for changes in e*isting wealth.

B1'r02'; >@@ has stated the literature on glo"ali(ation; e found the pervasiveness of the

west2s perception of the world affect on ndian investors that affects the trends in investor2s

choice. The# are hugel# affected "# the west2s views and so changes in ndian trends occur.

R' /' '+1' >@@ 4 has stated the investor "ehavior from the marketing world and financial

economics has "rought together to the surface an e*citing area for stud# and researchA "ehavioral

finance. The reali(ation that this is a serious su"ject is! however! "arel# dawning. 'nal#sts seem

to treat financial markets as an aggregate of statistical o"servations! technical and fundamentalanal#sis. ' rich view of research waits this sophisticated understanding of how financial markets

are also affected "# the financial "ehavior2 of investors. /ith the reforms of industrial polic#!

pu"lic sector! financial sector and the man# developments in the ndian mone# market and

capital market! mutual funds that has "ecome an important portal for the small investors! is also

influenced "# their financial "ehavior. ence! this stud# has made an attempt to e*amine the

related aspects of the fund selection "ehavior of individual investors towards &utual funds! in

the cit# of &um"ai. Brom the researchers and academicians point of view! such a stud# will help

in developing and e*panding knowledge in this field.

S1ro+ri*' >@@ conducted a surve# on investor preferences in which he depicted the linkage of

investment with the factor so considered while making investment. e sa#s GThere are various

factors and their linkage also. These factors help us how to ensure safet#! li@uidit#! capital

appreciation and ta* "enefits along with returns.H

Di;, >@@ has conducted )5 #ears of research on the si(e effect in international e@uit# returns.

Since %an(8s =1971? original stud#! numerous papers have appeared on the empirical regularit#

that small firms have higher risk3adjusted stock returns than large firms. ' @uarter of a centur#

after its discover#! the outlook for the si(e effect seems "leak. Let! empirical asset pricing

models that incorporate a factor portfolio mimicking underl#ing economic risks pro*ied "# firm

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si(e are increasingl# used "# "oth academics and practitioners. 'pplications range from event

studies and mutual fund performance measurement to computing the cost of e@uit# capital. The

aim of this paper is to review the literature on the si(e effect and s#nthesi(e the e*tensive de"ate

on the validit# and persistence of the si(e effect as an empirical phenomenon as well as the

theoretical e*planations for the effect. /e discuss the implications for academic research and

corporate finance and suggest a num"er of avenues for further research.

V'3u0%) >@@ anal#(ed the developments in the capital markets and corporate governance in

ndia since the earl# 1996s when the government of ndia adopted the economic li"erali(ation

programme. The legislative changes significantl# altered the theme of ndian ompanies 'ct

195:! which is "ased on the ompanies 'ct 1947 =U,?. The amendments! such as the

permission for nonvoting shares and "u#"acks! carried the statute awa# from the earlierG"usiness modelH and towards the 8financial model8 of the >elaware variet#. Simultaneousl#! the

government esta"lished the Securities E*change %oard of ndia =SE% ?! patterned on the

Securities and E*change ommission of US. Through a num"er of other polic# measures! the

government steered greater investments in the stock market and promoted the stock market as a

central institution in the societ#. The article points out that the reform effort was inspired! at least

in part! "# the government2s reliance on foreign portfolio inflows into the ndian stock market to

fund the countr#2s trade and current account deficits.

Jo1 3o >@@ has stated that Product @ualit# is pro"a"l# under3valued "# firms "ecause there

is little consensus a"out appropriate measures and methods to research @ualit#. The authors

suggest that pu"lished ratings of a product8s @ualit# are a valid source of @ualit# information with

important strategic and financial impact. The authors test this thesis "# an event anal#sis of

a"normal returns to stock prices of firms whose new products are evaluated in the /all Street

$ournal. ualit# has a strong immediate effect on a"normal returns! which is su"stantiall# higher

than that for other marketing events assessed in prior studies. n dollar terms! these returns

translate into an average gain of Q566 million for firms that got good reviews and an average loss

of Q)66 million for firms that got "ad reviews. &oreover! there are some important as#mmetries.

Rewards to small firms with good reviews of @ualit# are greater than those to large firms with

good reviews. On the other hand! large firms are penali(ed more "# poor reviews of @ualit# than

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the# are rewarded for good reviews. The authors discuss the research! managerial! investing! and

polic# implications.

P'+ 'i, ' 0 31'1 >@@ ? has anal#(ed on the preferences of foreign and domestic institutional

investors in ndian stock markets. Boreign and domestic institutional investors "oth prefer larger!

widel# dispersed firms and do not chase returns. owever! we and evidence of strong differences

in the "ehavior of foreign and domestic institutional investors.

B1'+ '/'r >@@ has anal#(ed of orporate overnance and e*ternal finance in transition

economies like ndia. The pro"lem in the ndian corporate sector is that of disciplining the

dominant shareholder and protecting the minorit# shareholders. learl#! the pro"lem of

corporate governance a"uses "# the dominant shareholder can "e solved onl# "# forces outsidethe compan# itself particularl# that of multilateral financial institutions in the economic

development. ndia has relied heavil# on e*ternal finance as their domestic saving rates have

"een much lower than their investment rates. The less promising prospects for the glo"al suppl#

of e*ternal finance the need for an increase in the multilateral financial institutions. ndia "eing a

transition econom# is changing from a centrall# planned econom# to a free market. t is

undergoing economic li"erali(ation! macroeconomic sta"ili(ation where immediate high

inflation is "rought under control! and restructuring and privati(ation in order to create a

financial sector and move from pu"lic to private ownership of resources. These changes often

ma# lead to increased ine@ualit# of incomes and wealth! dramatic inflation and a fall of >P.

M'*' , >@@ has anal#(ed the role of two important forces 3 the regulator and the capital

market as determinant of e*ternal finance in transition economies anal#ses the changing pattern

and future prospectus of e*ternal finance to ndia and reviews the role of e*ternal finance. Under

this framework! the stud# evaluates current ndian corporate governance practices in light of

e*ternal finance .

R';%312'ri ' 0 Moor+1* === has conducted the stud# and anal#(ed that &utual Bund is a

retail product designed to target small investors! salaried people and others who are intimidated

"# the m#steries of stock market "ut! nevertheless! like to reap the "enefits of stock market

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investing. 't the retail level! investors are uni@ue and are a highl# heterogeneous group. ence!

their fundJscheme selection also widel# differs. nvestors demand inter3temporal wealth shifting

as he or she progresses through the life c#cle. This necessitates the 'sset &anagement

ompanies ='& s? to understand the fundJscheme

selectionJswitching "ehavior of the investors to design suita"le products to meet the changing

financial needs of the investors. /ith this "ackground a surve# was conducted among 056

&utual Bund nvestors in 16 Ur"an and Semi Ur"an centers to stud# the factors influencing the

fundJscheme selection "ehavior of Retail nvestors. This paper discusses the surve# findings. t is

hoped that it will have some useful managerial implication for the '& s in their product

designing and marketing.

Brom the a"ove reviews it can "e concluded that man# researches had "een conducted "eforerelating to the investment patterns and the few researchers studied the literature onl# on the "asis

of returns. 'nal#sts treated financial markets as an aggregate of statistical o"servations! technical

and fundamental anal#sis "ut no researches had "een conducted on mpact of glo"al factors on

ndian Econom#. This gap had "een identified so that in this respect present stud# had "een

conduct

CHAPTER 04


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COMPANY

PROFI!E

05


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B'c,/rou 0

,arv# onsultants -imited was esta"lished in 197) at #dera"ad. t was esta"lished "# a group

of #dera"ad3"ased practicing hartered 'ccountants. 't initial stage it was ver# small in si(e.t was started with a capital of Rs. 1!56!666.

n starting it was onl# offering auditing and ta*ation services. -ater! it acts into the Registrar and

Share transfer activities and su"se@uentl# into financial services and other services like Binancial

Product >istri"ution! nvestment 'dvisor# Services! >emat Services! orporate Binance!

nsurance etc.

'll along! ,arv#2s strong work ethics and professional "ackground leveraged with nformation

Technolog# ena"led it to deliver @ualit# to the individual. ' decade of commitment! professionalintegrit# and vision helped ,arv# achieving a leadership position in its field when it handled

largest num"er of corporate and retail that proved to "e a sound "usiness s#nerg#.

Toda#! ,arv# has access to millions of ndian shareholders! "esides companies! "anks! financial

institutions and regulator# agencies. Over the past one and half decades! ,arv# has evolved as a

verita"le link "etween industr#! finance and people.

n $anuar# 1997! ,arv# "ecame first >epositor# Participant in 'ndhra Pradesh. 'n SO 966)

ompan#! ,arv#2s commitment to @ualit# and retail reach has made it an ntegrated Binancial

Services ompan#.

Toda#! compan# has )06 "ranch offices in 1:4 cities all over the ndia. The compan# adds 5 new

offices ever# month to the compan#2s ever growing national network in ever# nook and corner

of the countr#. The compan# service over 1: million individual investors! 176 corporate and

handle corporate dis"ursements that e*ceed Rs.)566 rores.

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HERE KARVY STAND IN THE MARKET

,'RIL is a legendar# name in financial services! ,arv#2s credit is defined "# its mission to

succeed! passion for professionalism! e*cellent work ethics and customer centric values.

Toda# ,'RIL is well known as a premier financial services enterprise! offering a "roadspectrum of customi(ed services to its clients! "oth corporate and retail. Services that ,'RIL

constantl# upgrade and improve are "ecause of compan#2s skill in leveraging technolog#. %eing

one of the most techno3savv# organi(ations around helps compan# to deliver even more cost

effective financial solutions in the shortest possi"le time.

/hat "ears ample testimon# to ,arv#2s success is the faith reposed in compan# "# valued

investors and customers! all across the countr#. ndeed! with ,arv#2s wide network touching

ever# corner of the countr#! even the most remote investor can easil# access ,arv#2s servicesand "enefit from compan#2s e*pert advice.

KARVY "ROUP

,arv# onsultants -imited

,arv# Securities -imited

,arv# nvestor Services -imited

,arv# Stock "roking -imited

,arv# omputer Shares Pvt. -td.

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Bo'r0 of Dir%c+or3

K'r)* Co 3ul+' +3 !imi+%0

Parthasarath# Lugandhar &

Ramakrishna & S

Prasad I Potluri

Ro"ert i"son

Sanja# ,umar >hir

R Sh#amsunder

Ta"le1A %O>s of ,arv# onsultants -imited

K'r)* I )%3+or S%r)ic%3 !imi+%0

Parthasarath#

Lugandhar &

Ramakrishna & S

Ta"le)A %O>s of ,arv# nvestor Services -imited

K'r)* S%curi+i%3 !imi+%0

07


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Parthasarath#

Lugandhar &

Ramakrishna & S

'ja# ,umar ,

/illiam Samuel

+icholas Tull#

Ta"le0A %O>s of ,arv# Securities -imited

K'r)* S+oc, Bro,i / !imi+%0

Parthasarath#

Lugandhar &

Ramakrishna & S

'ja# ,umar ,

,utum"a Rao I

/illiam Samuel

+icholas Tull#

Ta"le4A %O>s of ,arv# Stock %roking -imited

Mi33io S+'+%m% + of K'r)*L

'n organi(ation e*ists to accomplish something or achieve something. The mission statementindicates what an organi(ation wants to achieve. The mission statement ma# "e changed

periodicall# to take advantage of new opportunities or respond to new market conditions.

,arv#2s mission statement is #To Bri / I 0u3+r*4 Fi ' c% ' 0 P%o&l% +o/%+1%r.$

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,arv# is work as intermediar# "etween industr# and people. ,arv# work as investment advisor

and helps people to invest their mone# same wa# ,arv# helps industr# in achieving finance from

people "# issuing shares! de"entures! "onds! mutual funds! fi*ed deposits etc.

ompan#2s mission statement is clear and thoughtful which guide geographicall# dispersedemplo#ees to work independentl# #et collectivel# towards achieving the organi(ation2s goals.

Vi3io of K'r)*

ompan#2s vision is cr#stal clear and mind frame ver# directed. #To -% &io %%ri / fi ' ci'l

3%r)ic%3 com&' *. A 0 co +i u% +o /ro2 '+ ' 1%'l+1* &'c%4 *%'r 'f+%r *%'r4 0%c'0% 'f+%r

0%c'0%.$ ompan#2s fora# into T3ena"led services and internet "usiness has provided an

opportunit# to e*plore new frontiers and "usiness solutions. To "uild a corporate that sets

"enchmarks for others to follow.

B%1i 0 +1% Pic+ur%< 1'+ Cu3+om%r3 m'++%r for KARVY

The underl#ing picture forming answer for a"ove @uestion is given "elow.

Big.1 ompetitive 'dvantage of ,arv#

Ever# #ear with this picture keeping in mind ,arv# accelerate with Recover#! Revival and

Reappearance.2

,arv# has started )664 on a strong note with the reali(ation to signal some of the challenges it

faced previous #ear. n a competitive market and a "randed "usiness! ,arv# need to carefull#

manage itself to avoid down trading or "rand shifts "# consumers.

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Bor ,arv#! $amnagar "ranch )660 was trul# e*hilarating "ecause ofA

Successful implementation of a carefull# crafted strateg#.

E*cellence in e*ecution.

mmense learning ena"ling to set up a launch pad for revitali(ing itself.

Some competitive advantages are long lasting. These are intangi"le! difficult to replicate and

thus more sustaina"le. ,arv# has focused on some of these to gain competitive advantages.

There areA

/inning culture and a desire to e*cel in ever#thing ,arv# do.

Strong meaningful relationships with ustomers along with Strategic

Partners in which ,arv# operate and a"ove all! its own staff.

,arv# value and carefull# nurture relationships with customers. ,arv# trul# "elieve that more

than technological prowess and "usiness process innovations! it is the focus on relationships2

which has "een the corner stone of satisf#ing and successful presence in ndia over man# #ears.

This has "een possi"le with deep insight of consumer "ehavior as well as market demand drivers!

understanding of the arena where to operate and @ualit# e*ecution M all thanks to a greater team2

that makes this happen.

,arv#2s customers consider themselves part of ,arv# famil# and share their e*periences and

dreams with other customers and thus ,arv# "ecomes successful not onl# in relating customers

"ut also gains new customers from satisfied prevailing customers.

,arv# want to create a strong emotional "ond with new customers promoted "# prevailing

customers.

K'r)* V'lu%3emat services

0. nvestment product distri"ution

4. nvestment advisor# services

5. orporate finance C &erchant "anking

:. nsurance


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e*change of which the# are mem"ers. The# "u# and sell on their own "ehalf as well as on "ehalf

of their clients.

Stock"rokers e*pand their "usiness "# engaging su"3"roker. Su"3"rokers mean Gan# person not "eing a mem"er of a stock e*change who acts on "ehalf of a stock "roker as an agent or

otherwise for assisting the investors in "u#ing! selling or dealing in securities through such

stock3"rokers.H

>.D%m'+ S%r)ic%3epositor# -imited =+S>-? for

trading and settlement of demateriali(ed shares.

>epositor# Participants =>Ps? are descri"ed as an agent of the depositor#. The# are

intermediaries "etween the depositor# and the investors. The relationship "etween the >Ps and

the depositor# is governed "# an agreement made "etween the two under >epositories 'ct.

' >P can offer depositor#3related services onl# after o"taining a certificate of registration from

SE% .

Since ,arv# is also in the "roking "usiness! investors who use ,arv#2s depositor# services get a

dual "enefit. The# can use ,arv#2s "rokerage services to e*ecute transactions and ,arv#2sdepositor# services to settle them.

0. I )%3+m% + Pro0uc+3 Di3+ri-u+io % Suvidha

7 +icco Uco 'lliance redit -td.

Ta"le:A B> of +on %anking Binance ompanies with which ,arv# deals

HOUSIN" FINANCE COMPANIES

Sl. No. Com&' * N'm%

1 an Bin omes -td.

) >ewan ousing Binance orporation -td.

0 ruh Binance -td.

4 >B -td.

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5 P+% ousing Binance -td.

: Sundaram ome Binance -td.

Ta"le of ousing Binance ompanies with which ,arv# deals

MANUFACTURIN" COMPANIES

Sl. No. Com&' * N'm%

1 ' P Paper &ills -td.

) 'mtek ndia -td.

0 'tul -td.

4 %allarpur ndustries -td.

5 ham"al Bertili(ers C hemicals -td.

: Escort -td.

< reaves -td.

7 ujarat 'lkalies C hemicals -td.

9 ndian E*press

16 nd3Swift -td.

11 $, ndustries -td.

1) $indal Steel C Power -td.

10 Sound raft ndustries -td.14 Supreme ndustries -td.

15 Vuari ndustries -td.

Ta"le7A B> of &anufacturing ompanies with which ,arv# deals

- . Bo 03istri"ution of P'+ ard.

". >istri"ution of T'+ ard.

c. Services related to e3T>S.

49

1 'lliance &utual Bund) %irla &utual Bund0 %ank of %aroda &utual Bund4 an %ank &utual Bund5 hola &utual Bund: >eutsche &utual Bund< >SP &errill -#nch &utual Bund7 Branklin Templeton nvestments9 &utual Bund16 >B &utual Bund11 S% &utual Bund1) - C BS &utual Bund10 $& &utual Bund14 ,otak &utual Bund15 - &utual Bund1: Punja" +ational %ank &utual Bund1< Prudential &utual Bund17 Principal &utual Bund19 Reliance &utual Bund)6 State %ank of ndia &utual Bund)1 Standard hartered &utual Bund)) Sundaram &utual Bund)0 SU+ BC &utual Bund

)4 Tata &utual Bund
http://www.mutualfundsindia.com/amc_snapshot2.asp?scheme=AM009http://www.mutualfundsindia.com/amc_snapshot2.asp?scheme=AM031http://www.mutualfundsindia.com/amc_snapshot2.asp?scheme=AM009http://www.mutualfundsindia.com/amc_snapshot2.asp?scheme=AM031


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,arv# work as an intermediar# "etween +S>- and T pa#ers. ,arv# provides various form for

different T ena"led services and guide people to fill that forms. t also solves @ueries of the ta*

pa#ers. t also distri"utes P'+ and T'+ card to the ta* pa#ers.

TIN O)%r)i%2

+ational Securities >epositor# -td. =+S>-? has esta"lished a nationwide Ta* nformation

+etwork =T +? on "ehalf of the ncome Ta* >epartment = T>?. This is designed to make the ta*

administration more effective! furnishing of returns convenient! reduce compliance cost and

"ring greater transparenc#.

/hile +S>- will "e the primar# agenc# responsi"le for the design! implementation and

maintenance of T + as per the re@uirements of T>! other agencies will also pla# ke# roles in theT + s#stem.

,arv# has esta"lished infrastructure re@uired to provide T ena"led services so! ,arv# provides

T + facilitation centers all over ndia on "ehalf of +S>-. %esides ,arv# following companies

can also work as intermediar# "etween +S>- and customers.

. R%/i3+r'r3 Tr' 3f%r '/% +3ispatch

ualit# &anagement and Technological Up gradation.

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' SE% ategor# 1 Registrar! So far! ,arv# has handled over :


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MARKETIN" STRATE"Y OF KARVY

M'r,%+ Po3i+io i /iv for their emplo#ees of Rajkot! $amnagar! $unagadh and

%havnagar "ranch which was totall# free of cost. This also helps in maintaining co3operation

"etween emplo#ees.

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u'li+* Polic* Of K'r)*'T'%'SE

Birst SO 3 966) ertified Registrar in ndia

' ategor#3 &erchant "anker

' ategor#3 Registrar to Pu"lic ssues

Ranked as NThe &ost 'dmired RegistrarH "# &'R

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andled the largest3 ever Pu"lic ssue 3 >%

Strategic tie3up with $ardine Bleming ndia Securities -td

andled over 566 Pu"lic issues as Registrars

andling the Reliance 'ccount which accounts for nearl# 16 millionaccount holders

Birst >epositor# Participant from 'ndhra Pradesh

S OT ANA!YSIS OF KARVY

S+r% /+13 T*&% of i )%3+m% + o&+io +1% &%r3o i3 '2'r% of

T*&%3 of I )%3+m% +I 3+rum% +3

No. of R%3&o 0% +3 P%rc% +'/% of R%3&o 0% +3

Shares 15 06&utual Bunds )0 4:>e"entures 5 16%onds 5 16>erivatives ) 4Total 56 166

Fi/ur% No.G.> T*&% of i )%3+m% + o&+io +1% &%r3o i3 '2'r% of

A 'l*3i3 I +%r&r%+'+io '"ove pie3chart shows that 45 investors were aware of the mutual

fund! )5 investors were aware of shares! 15 investors were aware of de"entures! 16

investors were "onds. t means majorit# of persons aware a"out mutual fund whereas shares and

de"entures were of second importance.

::


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S+'+%m% + .To , o2 +1% +*&% of i )%3+m% + o&+io +1% &%r3o 1'3 -%% i )%3+i /

T'-l% No.G. T*&% of i )%3+m% + o&+io +1% &%r3o 1'3 -%% i )%3+i /

I )%3+m% + 'l+%r '+i)% No. of R%3&o 0% +3 P%rc% +'/% of R%3&o 0% +3

Shares 15 06&utual Bunds 15 06>e"entures 16 )6%onds 5 16>erivatives 5 16Total 56 166

Fi/ur% No.G. T*&% of i )%3+m% + o&+io +1% &%r3o 1'3 -%% i )%3+i /

A 'l*3i3 I +%r&r%+'+io e"entures. Thus! it can "e stated that ma*imum people invest in &utual

Bunds whereas shares are having ) nd importance.

:


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S+'+%m% + .To , o2 +1% r'+%3 '+ 21ic1 +1% i )%3+m% + /ro2

T'-l% No.G. T1% r'+%3 '+ 21ic1 +1% i )%3+m% + /ro2

I )%3+m% + "ro2+1 R'+% No. of R%3&o 0% +3 P%rc% +'/% of R%3&o 0% +3

Steadil# 6 6't an average rate 5 16't fast rate 45 96Total 56 166

A 'l*3i3 I +%r&r%+'+io erivatives 06 16 )6 06 16 )76


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T'-l% No. G.8> Im&or+' + F'c+or3 T1'+ '3 Co 3i0%r%0 1il% I )%3+i /

P'r+icul'r3 Hi/1l*

Di33'+i3fi%0

Di33'+i3fi%0 N%u+r'l S'+i3fi%0 Hi/1l*

S'+i3fi%0

Summ'+%0S

cor%8 > ?

Return on

investment

6 6 4 06 :: 4:)

Ta* "enefits 6 6 17 47 04 41:apital

appreciation

6 6 )6 46 46 4)6

&aturit#

period

5 5 46 06 )6 055

Risk 5 16 )6 05 06 0issatisfied?

A 'l*3i3 I +%r&r%+'+io e"entures

7


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d? %ondse? >erivatives

0./here have #ou "een investingY

a? Shares

"? &utual Bundsc? >e"enturesd? %ondse? >erivatives

4.'t which rates do #ou want #our investment to growY

a? Steadil#

"? 't an average rate

c? 't fast rate

5. ow fre@uentl# do #ou investY a? >ail#

"? /eekl#c? &onthl#d? Learl#

:. /hat percentage of #our annual income do #ou invest in share marketY a? Up to 16

"? 16315

c? 153)6d? &ore than )6


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f? Ta* "enefitsg? -i@uidit#

9. n #our opinion! what would "e the optimum strateg# if stock market drops immediatel#after #ou invest in itY

a? ut #our losses and transfer funds into secure investments "? /ait to see if investment improvesc? nvest more funds to lower #our losses e*pecting future growth

d? /ithdraw #our funds and stop investing

16. >o #ou have an# other investment polic#Y

a? Les "? +o

11. Rate the satisfaction with the return generated "# #our investment optionYighl# Satisfied +eutral >issatisfied ighl#

Satisfied >issatisfied =5? =4? =0? =)? =1?

a? Shares ZZZZZZ ZZZZZZ ZZZZZZ ZZZZZZZ ZZZZZZZZZ "? &utual funds ZZZZZZ ZZZZZZ ZZZZZZ ZZZZZZZ ZZZZZZZZZ c? %onds ZZZZZZ ZZZZZZ ZZZZZZ ZZZZZZZ ZZZZZZZZZ d? >e"entures ZZZZZZ ZZZZZZ ZZZZZZ ZZZZZZZ ZZZZZZZZZ e? >erivatives ZZZZZZ ZZZZZZ ZZZZZZ ZZZZZZZ ZZZZZZZZZ

1). Rate the satisfaction with the factors that was considered while investingY

ighl# Satisfied +eutral >issatisfied ighl#Satisfied >issatisfied

=5? =4? =0? =)? =1?a? Return on

nvestment ZZZZZZ ZZZZZZ ZZZZZZ ZZZZZZZ ZZZZZZZZZ "? Ta* %enefits ZZZZZZ ZZZZZZ ZZZZZZ ZZZZZZZ ZZZZZZZZZ c? apital

a study on investment horizons of investors in india

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