india infoline project report
DESCRIPTION
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ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 1
A PROJECT REPORT ON
CCCOOOMMMPPPAAARRRAAATTTIIIVVVEEE AAANNNAAALLLYYYSSSIIISSS OOOFFF
IIINNNVVVEEESSSTTTMMMEEENNNTTT IIINNN EEEQQQUUUIIITTTYYY AAANNNDDD
MMMUUUTTTUUUAAALLL FFFUUUNNNDDD SSSCCCHHHEEEMMMEEESSS
With Reference to
SUBMITTED IN PARTIAL FULFILMENT OF
REQUIREMENT OF PGDM PROGRAME
(2009 ndash 2011)
SUBMITTED TO- SUBMITTED BY-
Mr Rakesh Sahu NAGENDRA KUMAR
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 2
DECLARATION
We hereby declare that the PGDM Project titled ldquoCOMPARATIVE
ANALYSIS OF INVESTMENT IN EQUITY AND MUTUAL FUND
SCHEMES WITH REFERENCE TO INDIAINFOLINErdquo plans is original
to the best of our knowledge and have not been published elsewhere This is for
the purpose of partial fulfillment of the requirement for the degree of Post
Graduate Diploma in Management (PGDM)
Place - Bangalore NAGENDRA KUMAR
Date -helliphelliphelliphelliphelliphelliphelliphelliphelliphellip Sign-helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 3
ACKNOWLEDGEMENT
Any purpose and its fulfillment require deep routed efforts for its completion
Many characters play a vital role This is more when a project undertaken is
directly to a cause
Our sincere thanks to Prof Dr KIRAN REDDY PRINCIPAL AND
CEO OF AIMS for giving this opportunity to me
We would like to thank ProfRAKESH SUD our Project guide not only
for giving us the opportunity to work on this project but also for providing us
with sound guidance and the necessary facilities to carry out the project He
constantly insisted and helped us in learning new things He provided us a lot of
learning opportunities
Finally I would like to thank all those who were directly and indirectly
concerned in making my project successful To put it in a nutshell a difficult
and arduous journey was made simple and quiet enjoyable due to their support
NAGENDRA KUMAR
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 4
PREFACE
PGDM program is one of the most reputed professional courses in the field of
Management Training is an integral part of PGDM (MBA) As a
complementary to that every trainee has to submit a report on the research work
conducted in that institute
This report is thus prepared for the project work done at Indiainfoline
Rajajinagar branch The topic of the project is ldquoComparative analysis of
investment in equity and mutual fund schemes with reference to IndiaInfolinerdquo
Investment means putting your money to work to earn more money If done
wisely it can help to meet ones financial goals like buying a new house paying
for a college education education enjoying a comfortable retirement or
whatever is important to an individual
One needs to make decisions about how much heshe wants to invest and where
to invest To choose he needs to know current good options available and their
relative risk exposures These help are given to a client in Indiainfoline as to in
which portfolio they can invest and what risks are related to it They manage all
the respected returns of their clients and timely inform them for the switching to
be done between funds in cases of expected downfall in returns of their Mutual
Funds in future
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 5
INDEX NO PARTICULAR
1 INDUSTRY PROFILE
FINANCIAL MARKETS
2 COMPANY PROFILE
INTRODUCTION TO INDIA INFOLINE
HISTORY OF INDAIINFOLINE
VISION
MISSION
COMPANYrsquoS PHILOSHOPY
COMMITTEE
COMPANY STRUCTURE
PRODUCT amp SERVICE
MILESTONES ACHIVED
MARKET SHARE OF COMPANY
CHALLENGE FACED BY INDIAINFOLINE
MARKETING STRATGY OF INDIAINFOLINE
HUMAN RESOURCES
3 RESEARCH METHODOLOGY
OBJECTIVE OF STUDY
DATA COLLECTION
FUNDAMENTAL RESEARCH SERVICE
TECHNICAL RESEARCH SERVICE
SWOT ANALYSIS
PORTERrsquoS FIVE FORCE MODEL
4 DATA ANALYSIS
FINANCIAL PERFORMANCE
P amp L ACCOUNT OF INDIAINFOLINE
BALANCE SHEET OF INDIAINFOLINE
COMPITITORS
COMPARATIVE ANALYSIS OF CHARGES amp
FACILITIES PROVIDED BY DIFFERENT COMPANY
PERFORMANCE HIGHLIGHT 2008-09
HIGHLIGHTS 2008-09 INDUSTRY OPTIMISM
5 FINDING
6 RECOMMENDATION
7 CONCLUSION
8 BIBLIOGRPHY
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 6
INDUSTRY PROFILE
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 7
INDUSTRY PROFILE
The Indian broking industry is one of the oldest trading industries that have
been around even before the establishment of the BSE in 1875 Despite
passing through number of changes in the post liberalization period the
industry has found its way onwards sustainable growth With the purpose of
gaining a deeper understanding about the role of the Indian stock broking
industry in the countryrsquos economy we present in this section some of the
industry insights gleaned from analysis of data received through primary
research
For the broking industry we started with an initial database of over
1800 broking firms that were contacted from which 464 responses were
received The list was further short listed based on the number of terminals
and the top 210 were selected for profiling 394 responses that provided
more than 85 of the information sought have been included for this analysis
presented here as insights All the data for the study was collected through
responses received directly from the broking firms The insights have been
arrived at through an analysis on various parameters pertinent to the equity
broking industry such as region terminal market branches sub brokers
products and growth areas
Some key characteristics of the sample 394 firms are
On the basis of geographical concentration the West region has the
maximum representation of 52 Around 24 firms are located in the
North 13 in the South and 10 in the East
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 8
3 firms started broking operations before 1950 65 between 1950-
1995 and 32 post 1995
On the basis of terminals 40 are located at Mumbai 12 in Delhi 8
in Ahmedabad 7 in Kolkata 4 in Chennai and 29 are from other
cities
From this study we find that almost 36 firms trade in cash and
derivatives and 27 are into cash markets alone Around 20 trade in
cash derivatives and commodities
In the cash market around 34 firms trade at NSE 14 at BSE and 52
trade at both exchanges In the derivative segment 48 trade at NSE
7 at BSE and 45 at both whereas in the debt market 31 trade at
NSE 26 at BSE and 43 at both exchanges
Majority of branches are located in the North ie around 40 West has
31 24 are located in South and 5 in East
In terms of sub-brokers around 55 are located in the South 29 in
West 11 in North and 4 in East
Trading IPOs and Mutual Funds are the top three products offered with
90 firms offering trading 67 IPOs and 53 firms offering mutual fund
transactions
In terms of various areas of growth 84 firms have expressed interest in
expanding their institutional clients 66 firms intend to increase FII
clients and 43 are interested in setting up JV in India and abroad
In terms of IT penetration 62 firms have provided their website and
around 94 firms have email facility
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 9
A BRIEF HISTORY
India Infoline was originally incorporated on October 18 1995 as
Probity Research and Services Private Limited at Mumbai under the Companies
Act 1956 with Registration No 11 93797 India Infoline commenced
operations as an independent provider of information analysis and research
covering Indian businesses financial markets and economy to institutional
customers India Infoline became a public limited company on April 28 2000
and the name of the Company was changed to Probity Research and Services
Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 India Infolinecom identified the potential of the Internet to
cater to a mass retail segment and transformed our business model from
providing information services to institutional customers to retail customers
Hence India Infoline launched Internet portal wwwindiainfolinecom in May
1999 and started providing news and market information independent
research interviews with business leaders and other specialized features
In May 2000 the name of India Infoline was changed to India
Infolinecom Limited to reflect the transformation of our business Over a
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 10
period of time India Infolinecom has emerged as one of the leading business
and financial information services provider in India
In the year 2000 India Infoline leveraged its position as a provider of
financial information and analysis by diversifying into transactional services
primarily for online trading in shares and securities and online as well as offline
distribution of personal financial products like mutual funds and RBI Bonds
These activities were carried on by our wholly owned subsidiaries
India Infoline broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July
2000 It combined competitive brokerage rates and research supported by
Internet technology besides investment advice from an experienced team of
research analysts India Infoline also offer real time stock quotes market news
and price charts with multiple tools for technical analysis
Facilities
India Infolinersquos main offices are located in approximately 4000 square
feet of office space located in Mumbai India India Infoline Branches
collectively occupy an additional 10000 square feet of office space located
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 11
throughout India As on March 31 2005 India Infoline has 73 branches across
36 locations in India
Terminals
Almost 52 of the terminals in the sample are based in the Western
region of India followed by 25 in the North 13 in the South and 10 in the
East Mumbai has got the maximum representation from the West Chennai
from the South New Delhi from the North and Kolkata from the East
Branches amp Sub-Brokers
The maximum concentration of branches is in the North with as many
as 40 of all branches located there followed by the Western region with
31 branches Around 24 branches are located in the South and East
constitutes for 5 of the total branches of the total sample
In case of sub-brokers almost 55 of them are based in the South West
and North follow with 30 and 11 sub-brokers respectively whereas East
has around 4 of total sub-brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 12
Financial Markets
The financial markets have been classified as cash market derivatives
market debt market and commodities market Cash market also known as
spot market is the most sought after amongst investors Majority of the
sample broking firms are dealing in the cash market followed by derivative
and commodities 27 firms are dealing only in the cash market whereas 35
are into cash and derivatives Almost 20 firms trade in cash derivatives and
commodities market Firms that are into cash derivatives and debt are 7 On
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13
the other hand firms into cash and commodities are 3 cash amp debt market
and commodities alone are 2 4 firms trade in all the markets
In the cash market around 34 firms trade at NSE 14 at BSE and 52
trade at both exchanges In the equity derivative market 48 of the sampled
broking houses are members of NSE and 7 trade at BSE while 45 of the
sample operate in both stock exchanges Around 43 of the broking houses
operating in the debt market trade at both exchanges with 31 and 26
firms uniquely at NSE and BSE respectively
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14
Products
The survey also revealed that in the past couple of years apart from
trading the firms have started offering various investment related value
added services The sustained growth of the economy in the past couple of
years has resulted in broking firms offering many diversified services related
to IPOs mutual funds company research etc However the core trading
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15
activity is still the predominant form of business forming 90 of the firms in
the sample 67 firms are engaged in offering IPO related services The
broking industry seems to have capitalized on the growth of the mutual fund
industry which was pegged at 40 in 2006 More than 50 of the sample
broking houses deal in mutual fund investment services The average growth
in assets under management in the last two years is almost 48 Company
research is another lucrative area where the broking firms offer their services
more than 33 of the firms are engaged in providing company research
services Additionally a host of other value added services such as
fundamental and technical analysis investment banking arbitrage etc are
offered by the firms at different levels
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16
Of the total sample of broking houses providing trading services 52 are
based in the West followed by 25 from North 13 from South and 10
from the East Around 50 of the firms offering IPO related services are based
in the West as compared to 27 in North 13 in South and 10 in East In
providing mutual funds services the Western region was dominant amounting
to 49 followed by 27 from North The South and the East are almost at par
with 13 and 11 respectively
Future Plans
68 of the firms from the sample have envisaged strategies for future
growth With the middle class Indian investor as well as foreign investor
willing to invest in the stock market majority of the firms preferred expansion
of institutional and the Foreign Institutional Investor clients in their areas of
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17
growth Around 84 have shown interest in expanding their institutional
client base Nearly 51 of such firms are located in the West 25 in North
15 are from South and 9 from East Since the past couple of years India
along with Korea and Taiwan has been one of the preferred destinations for
the FIIs With corporate restructuring rising market capitalization and sectoral
friendly policies helping the FIIs more than two thirds of the firms are
interested in increasing their FII client base Amongst these firms west again
has maximum representation of 53 followed by North with 22 South has
15 firms and East makes up for 9
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19
INTRODUCTION TO INDIAINFOLINE
IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an
independent business research and information provider We gradually evolved into a one-
stop financial services solutions provider Our strong management team comprises competent
and dedicated professionals
We are a pan-India financial services organization across 1361 business locations and a
presence in 428 cities Our global footprint extends across geographies with offices in New
York Singapore and Dubai We are listed on the Bombay Stock Exchange (BSE) and the
National Stock Exchange (NSE)
We offer a wide range of services and products comprising broking (retail and institutional
equities and commodities) wealth management credit and finance insurance asset
management and investment banking
We are registered with the BSE and the NSE for securities trading MCX NCDEX and
DGCX for commodities trading CDSL and NSDL as depository participants We are
registered as a Category I merchant banker and are a SEBI registered portfolio manager We
also received the FII license in IIFL Inc IIFL Securities Pte Ltd received approval from the
Monetary Authority of Singapore to carry out corporate advisory and dealing in securities
operations Two subsidiaries ndash India Infoline Investment Services and Moneyline Credit
Limited ndash are registered with RBI as non-deposit taking non-banking financial services
companies India infoline Housing Finance Ltd the housing finance arm is registered with
the National Housing Bank
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20
HISTROY OF INDIAINFOLINE
The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity
Research and Services Private Limited at Mumbai under the Companies Act 1956 with
Registration No 11 93797 The IndiaInfoline Group commenced its operations as an
independent provider of information analysis and research covering Indian businesses
financial markets and economy to institutional customers We became a public limited
company on April 28 2000 and the name of the Company was changed to Probity Research
and Services Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a
mass retail segment and transformed our business model from providing information services
to institutional customers to retail customers Hence we launched our Internet portal
wwwindiainfolinecom in May 1999 and started providing news and market information
independent research interviews with business leaders and other specialized features
In May 2000 the name of our Company was changed to India Infolinecom Limited
to reflect the transformation of our business Over a period of time we have emerged as one
of the leading business and financial information services provider in India
In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of
financial information and analysis by diversifying into transactional services primarily for
online trading in shares and securities and online as well as offline distribution of personal
financial products like mutual funds and RBI Bonds These activities were carried on by our
wholly owned subsidiaries
The India Infoline Grouprsquos broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July 2000 It
combined competitive brokerage rates and research supported by Internet technology
Besides investment advice from an experienced team of research analysts we also offer real
time stock quotes market news and price charts with multiple tools for technical analysis
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21
Acquisition of Agri Marketing Services Limited (Agri)
In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri
Marketing Services Limited from their owners in exchange for the issuance of 508482 of
our equity shares Agri was a direct selling agent of personal financial products including
mutual funds fixed deposits corporate bonds and post-office instruments At the time of our
acquisition Agri operated 32 branches in South and West India serving more than 30000
customers with a staff of approximately 180 employees After the acquisition we changed
the company name to India Infolinecom Distribution Company Limited
The India Infoline group comprising the holding company India Infoline Ltd (NSE
INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian
financial services space India Infoline offers the entire gamut of financial services covering
investment products ranging from Equities and derivatives Commodities Portfolio
Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment
Banking GoI bonds and other small savings instruments It owns and manages the website
wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal
finance stock markets economy and business
A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none
other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo
IndiaInfolinersquos research is available not just over the internet but also on international wire
services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is
amongst the most read Indian brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22
A network of 753 business locations spread over 346 cities across India facilitates the
smooth acquisition and servicing of a large customer base All these offices are connected
with the corporate office in Mumbai with cutting edge networking technology
The group caters to a customer base of over 500000 over a variety of mediums viz online
over the phone and at our branches The Group is strengthening its institutional broking and
investment banking services and has built a team of experienced research analysts sales and
trading professionals
IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will
give a more meaningful picture of the Company to the investors Reference to the company
or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise
specified
VISION
Our vision is to be the most respected company in the financial services space
MISSION
ldquoTo become a full-fledged financial services company known for its quality of advice
personalized services and cutting edge technologyrdquo
COMPANY PHILISOPHY
The IndiaInfoline Group is committed to placing the Investor First by continuously striving
to increase the efficiency of the operations as well as the systems and processes for use of
corporate resources in such a way so as to maximize the value to the stakeholders The Group
aims at achieving not only the highest possible standards of legal and regulatory compliances
but also of effective management
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23
COMMITTEE
Audit Committee
Terms of reference amp Composition Name of members and Chairman The Audit committee
comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv
Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and
Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as
under - To investigate into any matter that may be prescribed under the provisions of Section
292A of The Companies Act 1956 - Recommendation and removal of External Auditor and
fixation of the Audit Fees - Reviewing with the management the financial statements before
submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and
disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function
Compensation Remuneration Committee
Terms of reference amp Composition Name of members and Chairman The Compensation
Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr
Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of
reference of this committee are as under - To fix suitable remuneration package of all the
Executive Directors and Non Executive Directors Senior Employees and officers ie Salary
perquisites bonuses stock options pensions etc - Determination of the fixed component and
performance linked incentives alongwith the performance criteria to all employees of the
company - Service Contracts Notice Period Severance Fees of Directors and employees -
Stock Option details whether to be issued at discount as well as the period over which to be
accrued and over which exercisable - To conduct discussions with the HR department and
form suitable remuneration policies
Share Transfer and Investor Grievance Committee
Details of the Members Compliance Officer No of Complaints received and pending and
pending transfers as on close of the financial year The committee functions under the
Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24
Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R
Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance
Officer of the Company
COMPANY STRUCTURE
IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock
Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory
Services and Portfolio Management Services It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with
NSDL as well as CDSL as a depository participant providing a one-stop solution for clients
trading in the equities market It has recently launched its Investment banking and
Institutional Broking business
A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients
These services are offered to clients as different schemes which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 2
DECLARATION
We hereby declare that the PGDM Project titled ldquoCOMPARATIVE
ANALYSIS OF INVESTMENT IN EQUITY AND MUTUAL FUND
SCHEMES WITH REFERENCE TO INDIAINFOLINErdquo plans is original
to the best of our knowledge and have not been published elsewhere This is for
the purpose of partial fulfillment of the requirement for the degree of Post
Graduate Diploma in Management (PGDM)
Place - Bangalore NAGENDRA KUMAR
Date -helliphelliphelliphelliphelliphelliphelliphelliphelliphellip Sign-helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 3
ACKNOWLEDGEMENT
Any purpose and its fulfillment require deep routed efforts for its completion
Many characters play a vital role This is more when a project undertaken is
directly to a cause
Our sincere thanks to Prof Dr KIRAN REDDY PRINCIPAL AND
CEO OF AIMS for giving this opportunity to me
We would like to thank ProfRAKESH SUD our Project guide not only
for giving us the opportunity to work on this project but also for providing us
with sound guidance and the necessary facilities to carry out the project He
constantly insisted and helped us in learning new things He provided us a lot of
learning opportunities
Finally I would like to thank all those who were directly and indirectly
concerned in making my project successful To put it in a nutshell a difficult
and arduous journey was made simple and quiet enjoyable due to their support
NAGENDRA KUMAR
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 4
PREFACE
PGDM program is one of the most reputed professional courses in the field of
Management Training is an integral part of PGDM (MBA) As a
complementary to that every trainee has to submit a report on the research work
conducted in that institute
This report is thus prepared for the project work done at Indiainfoline
Rajajinagar branch The topic of the project is ldquoComparative analysis of
investment in equity and mutual fund schemes with reference to IndiaInfolinerdquo
Investment means putting your money to work to earn more money If done
wisely it can help to meet ones financial goals like buying a new house paying
for a college education education enjoying a comfortable retirement or
whatever is important to an individual
One needs to make decisions about how much heshe wants to invest and where
to invest To choose he needs to know current good options available and their
relative risk exposures These help are given to a client in Indiainfoline as to in
which portfolio they can invest and what risks are related to it They manage all
the respected returns of their clients and timely inform them for the switching to
be done between funds in cases of expected downfall in returns of their Mutual
Funds in future
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 5
INDEX NO PARTICULAR
1 INDUSTRY PROFILE
FINANCIAL MARKETS
2 COMPANY PROFILE
INTRODUCTION TO INDIA INFOLINE
HISTORY OF INDAIINFOLINE
VISION
MISSION
COMPANYrsquoS PHILOSHOPY
COMMITTEE
COMPANY STRUCTURE
PRODUCT amp SERVICE
MILESTONES ACHIVED
MARKET SHARE OF COMPANY
CHALLENGE FACED BY INDIAINFOLINE
MARKETING STRATGY OF INDIAINFOLINE
HUMAN RESOURCES
3 RESEARCH METHODOLOGY
OBJECTIVE OF STUDY
DATA COLLECTION
FUNDAMENTAL RESEARCH SERVICE
TECHNICAL RESEARCH SERVICE
SWOT ANALYSIS
PORTERrsquoS FIVE FORCE MODEL
4 DATA ANALYSIS
FINANCIAL PERFORMANCE
P amp L ACCOUNT OF INDIAINFOLINE
BALANCE SHEET OF INDIAINFOLINE
COMPITITORS
COMPARATIVE ANALYSIS OF CHARGES amp
FACILITIES PROVIDED BY DIFFERENT COMPANY
PERFORMANCE HIGHLIGHT 2008-09
HIGHLIGHTS 2008-09 INDUSTRY OPTIMISM
5 FINDING
6 RECOMMENDATION
7 CONCLUSION
8 BIBLIOGRPHY
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 6
INDUSTRY PROFILE
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 7
INDUSTRY PROFILE
The Indian broking industry is one of the oldest trading industries that have
been around even before the establishment of the BSE in 1875 Despite
passing through number of changes in the post liberalization period the
industry has found its way onwards sustainable growth With the purpose of
gaining a deeper understanding about the role of the Indian stock broking
industry in the countryrsquos economy we present in this section some of the
industry insights gleaned from analysis of data received through primary
research
For the broking industry we started with an initial database of over
1800 broking firms that were contacted from which 464 responses were
received The list was further short listed based on the number of terminals
and the top 210 were selected for profiling 394 responses that provided
more than 85 of the information sought have been included for this analysis
presented here as insights All the data for the study was collected through
responses received directly from the broking firms The insights have been
arrived at through an analysis on various parameters pertinent to the equity
broking industry such as region terminal market branches sub brokers
products and growth areas
Some key characteristics of the sample 394 firms are
On the basis of geographical concentration the West region has the
maximum representation of 52 Around 24 firms are located in the
North 13 in the South and 10 in the East
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 8
3 firms started broking operations before 1950 65 between 1950-
1995 and 32 post 1995
On the basis of terminals 40 are located at Mumbai 12 in Delhi 8
in Ahmedabad 7 in Kolkata 4 in Chennai and 29 are from other
cities
From this study we find that almost 36 firms trade in cash and
derivatives and 27 are into cash markets alone Around 20 trade in
cash derivatives and commodities
In the cash market around 34 firms trade at NSE 14 at BSE and 52
trade at both exchanges In the derivative segment 48 trade at NSE
7 at BSE and 45 at both whereas in the debt market 31 trade at
NSE 26 at BSE and 43 at both exchanges
Majority of branches are located in the North ie around 40 West has
31 24 are located in South and 5 in East
In terms of sub-brokers around 55 are located in the South 29 in
West 11 in North and 4 in East
Trading IPOs and Mutual Funds are the top three products offered with
90 firms offering trading 67 IPOs and 53 firms offering mutual fund
transactions
In terms of various areas of growth 84 firms have expressed interest in
expanding their institutional clients 66 firms intend to increase FII
clients and 43 are interested in setting up JV in India and abroad
In terms of IT penetration 62 firms have provided their website and
around 94 firms have email facility
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 9
A BRIEF HISTORY
India Infoline was originally incorporated on October 18 1995 as
Probity Research and Services Private Limited at Mumbai under the Companies
Act 1956 with Registration No 11 93797 India Infoline commenced
operations as an independent provider of information analysis and research
covering Indian businesses financial markets and economy to institutional
customers India Infoline became a public limited company on April 28 2000
and the name of the Company was changed to Probity Research and Services
Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 India Infolinecom identified the potential of the Internet to
cater to a mass retail segment and transformed our business model from
providing information services to institutional customers to retail customers
Hence India Infoline launched Internet portal wwwindiainfolinecom in May
1999 and started providing news and market information independent
research interviews with business leaders and other specialized features
In May 2000 the name of India Infoline was changed to India
Infolinecom Limited to reflect the transformation of our business Over a
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 10
period of time India Infolinecom has emerged as one of the leading business
and financial information services provider in India
In the year 2000 India Infoline leveraged its position as a provider of
financial information and analysis by diversifying into transactional services
primarily for online trading in shares and securities and online as well as offline
distribution of personal financial products like mutual funds and RBI Bonds
These activities were carried on by our wholly owned subsidiaries
India Infoline broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July
2000 It combined competitive brokerage rates and research supported by
Internet technology besides investment advice from an experienced team of
research analysts India Infoline also offer real time stock quotes market news
and price charts with multiple tools for technical analysis
Facilities
India Infolinersquos main offices are located in approximately 4000 square
feet of office space located in Mumbai India India Infoline Branches
collectively occupy an additional 10000 square feet of office space located
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 11
throughout India As on March 31 2005 India Infoline has 73 branches across
36 locations in India
Terminals
Almost 52 of the terminals in the sample are based in the Western
region of India followed by 25 in the North 13 in the South and 10 in the
East Mumbai has got the maximum representation from the West Chennai
from the South New Delhi from the North and Kolkata from the East
Branches amp Sub-Brokers
The maximum concentration of branches is in the North with as many
as 40 of all branches located there followed by the Western region with
31 branches Around 24 branches are located in the South and East
constitutes for 5 of the total branches of the total sample
In case of sub-brokers almost 55 of them are based in the South West
and North follow with 30 and 11 sub-brokers respectively whereas East
has around 4 of total sub-brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 12
Financial Markets
The financial markets have been classified as cash market derivatives
market debt market and commodities market Cash market also known as
spot market is the most sought after amongst investors Majority of the
sample broking firms are dealing in the cash market followed by derivative
and commodities 27 firms are dealing only in the cash market whereas 35
are into cash and derivatives Almost 20 firms trade in cash derivatives and
commodities market Firms that are into cash derivatives and debt are 7 On
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13
the other hand firms into cash and commodities are 3 cash amp debt market
and commodities alone are 2 4 firms trade in all the markets
In the cash market around 34 firms trade at NSE 14 at BSE and 52
trade at both exchanges In the equity derivative market 48 of the sampled
broking houses are members of NSE and 7 trade at BSE while 45 of the
sample operate in both stock exchanges Around 43 of the broking houses
operating in the debt market trade at both exchanges with 31 and 26
firms uniquely at NSE and BSE respectively
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14
Products
The survey also revealed that in the past couple of years apart from
trading the firms have started offering various investment related value
added services The sustained growth of the economy in the past couple of
years has resulted in broking firms offering many diversified services related
to IPOs mutual funds company research etc However the core trading
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15
activity is still the predominant form of business forming 90 of the firms in
the sample 67 firms are engaged in offering IPO related services The
broking industry seems to have capitalized on the growth of the mutual fund
industry which was pegged at 40 in 2006 More than 50 of the sample
broking houses deal in mutual fund investment services The average growth
in assets under management in the last two years is almost 48 Company
research is another lucrative area where the broking firms offer their services
more than 33 of the firms are engaged in providing company research
services Additionally a host of other value added services such as
fundamental and technical analysis investment banking arbitrage etc are
offered by the firms at different levels
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16
Of the total sample of broking houses providing trading services 52 are
based in the West followed by 25 from North 13 from South and 10
from the East Around 50 of the firms offering IPO related services are based
in the West as compared to 27 in North 13 in South and 10 in East In
providing mutual funds services the Western region was dominant amounting
to 49 followed by 27 from North The South and the East are almost at par
with 13 and 11 respectively
Future Plans
68 of the firms from the sample have envisaged strategies for future
growth With the middle class Indian investor as well as foreign investor
willing to invest in the stock market majority of the firms preferred expansion
of institutional and the Foreign Institutional Investor clients in their areas of
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17
growth Around 84 have shown interest in expanding their institutional
client base Nearly 51 of such firms are located in the West 25 in North
15 are from South and 9 from East Since the past couple of years India
along with Korea and Taiwan has been one of the preferred destinations for
the FIIs With corporate restructuring rising market capitalization and sectoral
friendly policies helping the FIIs more than two thirds of the firms are
interested in increasing their FII client base Amongst these firms west again
has maximum representation of 53 followed by North with 22 South has
15 firms and East makes up for 9
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19
INTRODUCTION TO INDIAINFOLINE
IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an
independent business research and information provider We gradually evolved into a one-
stop financial services solutions provider Our strong management team comprises competent
and dedicated professionals
We are a pan-India financial services organization across 1361 business locations and a
presence in 428 cities Our global footprint extends across geographies with offices in New
York Singapore and Dubai We are listed on the Bombay Stock Exchange (BSE) and the
National Stock Exchange (NSE)
We offer a wide range of services and products comprising broking (retail and institutional
equities and commodities) wealth management credit and finance insurance asset
management and investment banking
We are registered with the BSE and the NSE for securities trading MCX NCDEX and
DGCX for commodities trading CDSL and NSDL as depository participants We are
registered as a Category I merchant banker and are a SEBI registered portfolio manager We
also received the FII license in IIFL Inc IIFL Securities Pte Ltd received approval from the
Monetary Authority of Singapore to carry out corporate advisory and dealing in securities
operations Two subsidiaries ndash India Infoline Investment Services and Moneyline Credit
Limited ndash are registered with RBI as non-deposit taking non-banking financial services
companies India infoline Housing Finance Ltd the housing finance arm is registered with
the National Housing Bank
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20
HISTROY OF INDIAINFOLINE
The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity
Research and Services Private Limited at Mumbai under the Companies Act 1956 with
Registration No 11 93797 The IndiaInfoline Group commenced its operations as an
independent provider of information analysis and research covering Indian businesses
financial markets and economy to institutional customers We became a public limited
company on April 28 2000 and the name of the Company was changed to Probity Research
and Services Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a
mass retail segment and transformed our business model from providing information services
to institutional customers to retail customers Hence we launched our Internet portal
wwwindiainfolinecom in May 1999 and started providing news and market information
independent research interviews with business leaders and other specialized features
In May 2000 the name of our Company was changed to India Infolinecom Limited
to reflect the transformation of our business Over a period of time we have emerged as one
of the leading business and financial information services provider in India
In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of
financial information and analysis by diversifying into transactional services primarily for
online trading in shares and securities and online as well as offline distribution of personal
financial products like mutual funds and RBI Bonds These activities were carried on by our
wholly owned subsidiaries
The India Infoline Grouprsquos broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July 2000 It
combined competitive brokerage rates and research supported by Internet technology
Besides investment advice from an experienced team of research analysts we also offer real
time stock quotes market news and price charts with multiple tools for technical analysis
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21
Acquisition of Agri Marketing Services Limited (Agri)
In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri
Marketing Services Limited from their owners in exchange for the issuance of 508482 of
our equity shares Agri was a direct selling agent of personal financial products including
mutual funds fixed deposits corporate bonds and post-office instruments At the time of our
acquisition Agri operated 32 branches in South and West India serving more than 30000
customers with a staff of approximately 180 employees After the acquisition we changed
the company name to India Infolinecom Distribution Company Limited
The India Infoline group comprising the holding company India Infoline Ltd (NSE
INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian
financial services space India Infoline offers the entire gamut of financial services covering
investment products ranging from Equities and derivatives Commodities Portfolio
Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment
Banking GoI bonds and other small savings instruments It owns and manages the website
wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal
finance stock markets economy and business
A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none
other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo
IndiaInfolinersquos research is available not just over the internet but also on international wire
services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is
amongst the most read Indian brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22
A network of 753 business locations spread over 346 cities across India facilitates the
smooth acquisition and servicing of a large customer base All these offices are connected
with the corporate office in Mumbai with cutting edge networking technology
The group caters to a customer base of over 500000 over a variety of mediums viz online
over the phone and at our branches The Group is strengthening its institutional broking and
investment banking services and has built a team of experienced research analysts sales and
trading professionals
IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will
give a more meaningful picture of the Company to the investors Reference to the company
or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise
specified
VISION
Our vision is to be the most respected company in the financial services space
MISSION
ldquoTo become a full-fledged financial services company known for its quality of advice
personalized services and cutting edge technologyrdquo
COMPANY PHILISOPHY
The IndiaInfoline Group is committed to placing the Investor First by continuously striving
to increase the efficiency of the operations as well as the systems and processes for use of
corporate resources in such a way so as to maximize the value to the stakeholders The Group
aims at achieving not only the highest possible standards of legal and regulatory compliances
but also of effective management
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23
COMMITTEE
Audit Committee
Terms of reference amp Composition Name of members and Chairman The Audit committee
comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv
Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and
Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as
under - To investigate into any matter that may be prescribed under the provisions of Section
292A of The Companies Act 1956 - Recommendation and removal of External Auditor and
fixation of the Audit Fees - Reviewing with the management the financial statements before
submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and
disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function
Compensation Remuneration Committee
Terms of reference amp Composition Name of members and Chairman The Compensation
Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr
Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of
reference of this committee are as under - To fix suitable remuneration package of all the
Executive Directors and Non Executive Directors Senior Employees and officers ie Salary
perquisites bonuses stock options pensions etc - Determination of the fixed component and
performance linked incentives alongwith the performance criteria to all employees of the
company - Service Contracts Notice Period Severance Fees of Directors and employees -
Stock Option details whether to be issued at discount as well as the period over which to be
accrued and over which exercisable - To conduct discussions with the HR department and
form suitable remuneration policies
Share Transfer and Investor Grievance Committee
Details of the Members Compliance Officer No of Complaints received and pending and
pending transfers as on close of the financial year The committee functions under the
Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24
Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R
Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance
Officer of the Company
COMPANY STRUCTURE
IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock
Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory
Services and Portfolio Management Services It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with
NSDL as well as CDSL as a depository participant providing a one-stop solution for clients
trading in the equities market It has recently launched its Investment banking and
Institutional Broking business
A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients
These services are offered to clients as different schemes which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 3
ACKNOWLEDGEMENT
Any purpose and its fulfillment require deep routed efforts for its completion
Many characters play a vital role This is more when a project undertaken is
directly to a cause
Our sincere thanks to Prof Dr KIRAN REDDY PRINCIPAL AND
CEO OF AIMS for giving this opportunity to me
We would like to thank ProfRAKESH SUD our Project guide not only
for giving us the opportunity to work on this project but also for providing us
with sound guidance and the necessary facilities to carry out the project He
constantly insisted and helped us in learning new things He provided us a lot of
learning opportunities
Finally I would like to thank all those who were directly and indirectly
concerned in making my project successful To put it in a nutshell a difficult
and arduous journey was made simple and quiet enjoyable due to their support
NAGENDRA KUMAR
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 4
PREFACE
PGDM program is one of the most reputed professional courses in the field of
Management Training is an integral part of PGDM (MBA) As a
complementary to that every trainee has to submit a report on the research work
conducted in that institute
This report is thus prepared for the project work done at Indiainfoline
Rajajinagar branch The topic of the project is ldquoComparative analysis of
investment in equity and mutual fund schemes with reference to IndiaInfolinerdquo
Investment means putting your money to work to earn more money If done
wisely it can help to meet ones financial goals like buying a new house paying
for a college education education enjoying a comfortable retirement or
whatever is important to an individual
One needs to make decisions about how much heshe wants to invest and where
to invest To choose he needs to know current good options available and their
relative risk exposures These help are given to a client in Indiainfoline as to in
which portfolio they can invest and what risks are related to it They manage all
the respected returns of their clients and timely inform them for the switching to
be done between funds in cases of expected downfall in returns of their Mutual
Funds in future
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 5
INDEX NO PARTICULAR
1 INDUSTRY PROFILE
FINANCIAL MARKETS
2 COMPANY PROFILE
INTRODUCTION TO INDIA INFOLINE
HISTORY OF INDAIINFOLINE
VISION
MISSION
COMPANYrsquoS PHILOSHOPY
COMMITTEE
COMPANY STRUCTURE
PRODUCT amp SERVICE
MILESTONES ACHIVED
MARKET SHARE OF COMPANY
CHALLENGE FACED BY INDIAINFOLINE
MARKETING STRATGY OF INDIAINFOLINE
HUMAN RESOURCES
3 RESEARCH METHODOLOGY
OBJECTIVE OF STUDY
DATA COLLECTION
FUNDAMENTAL RESEARCH SERVICE
TECHNICAL RESEARCH SERVICE
SWOT ANALYSIS
PORTERrsquoS FIVE FORCE MODEL
4 DATA ANALYSIS
FINANCIAL PERFORMANCE
P amp L ACCOUNT OF INDIAINFOLINE
BALANCE SHEET OF INDIAINFOLINE
COMPITITORS
COMPARATIVE ANALYSIS OF CHARGES amp
FACILITIES PROVIDED BY DIFFERENT COMPANY
PERFORMANCE HIGHLIGHT 2008-09
HIGHLIGHTS 2008-09 INDUSTRY OPTIMISM
5 FINDING
6 RECOMMENDATION
7 CONCLUSION
8 BIBLIOGRPHY
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 6
INDUSTRY PROFILE
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 7
INDUSTRY PROFILE
The Indian broking industry is one of the oldest trading industries that have
been around even before the establishment of the BSE in 1875 Despite
passing through number of changes in the post liberalization period the
industry has found its way onwards sustainable growth With the purpose of
gaining a deeper understanding about the role of the Indian stock broking
industry in the countryrsquos economy we present in this section some of the
industry insights gleaned from analysis of data received through primary
research
For the broking industry we started with an initial database of over
1800 broking firms that were contacted from which 464 responses were
received The list was further short listed based on the number of terminals
and the top 210 were selected for profiling 394 responses that provided
more than 85 of the information sought have been included for this analysis
presented here as insights All the data for the study was collected through
responses received directly from the broking firms The insights have been
arrived at through an analysis on various parameters pertinent to the equity
broking industry such as region terminal market branches sub brokers
products and growth areas
Some key characteristics of the sample 394 firms are
On the basis of geographical concentration the West region has the
maximum representation of 52 Around 24 firms are located in the
North 13 in the South and 10 in the East
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 8
3 firms started broking operations before 1950 65 between 1950-
1995 and 32 post 1995
On the basis of terminals 40 are located at Mumbai 12 in Delhi 8
in Ahmedabad 7 in Kolkata 4 in Chennai and 29 are from other
cities
From this study we find that almost 36 firms trade in cash and
derivatives and 27 are into cash markets alone Around 20 trade in
cash derivatives and commodities
In the cash market around 34 firms trade at NSE 14 at BSE and 52
trade at both exchanges In the derivative segment 48 trade at NSE
7 at BSE and 45 at both whereas in the debt market 31 trade at
NSE 26 at BSE and 43 at both exchanges
Majority of branches are located in the North ie around 40 West has
31 24 are located in South and 5 in East
In terms of sub-brokers around 55 are located in the South 29 in
West 11 in North and 4 in East
Trading IPOs and Mutual Funds are the top three products offered with
90 firms offering trading 67 IPOs and 53 firms offering mutual fund
transactions
In terms of various areas of growth 84 firms have expressed interest in
expanding their institutional clients 66 firms intend to increase FII
clients and 43 are interested in setting up JV in India and abroad
In terms of IT penetration 62 firms have provided their website and
around 94 firms have email facility
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 9
A BRIEF HISTORY
India Infoline was originally incorporated on October 18 1995 as
Probity Research and Services Private Limited at Mumbai under the Companies
Act 1956 with Registration No 11 93797 India Infoline commenced
operations as an independent provider of information analysis and research
covering Indian businesses financial markets and economy to institutional
customers India Infoline became a public limited company on April 28 2000
and the name of the Company was changed to Probity Research and Services
Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 India Infolinecom identified the potential of the Internet to
cater to a mass retail segment and transformed our business model from
providing information services to institutional customers to retail customers
Hence India Infoline launched Internet portal wwwindiainfolinecom in May
1999 and started providing news and market information independent
research interviews with business leaders and other specialized features
In May 2000 the name of India Infoline was changed to India
Infolinecom Limited to reflect the transformation of our business Over a
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 10
period of time India Infolinecom has emerged as one of the leading business
and financial information services provider in India
In the year 2000 India Infoline leveraged its position as a provider of
financial information and analysis by diversifying into transactional services
primarily for online trading in shares and securities and online as well as offline
distribution of personal financial products like mutual funds and RBI Bonds
These activities were carried on by our wholly owned subsidiaries
India Infoline broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July
2000 It combined competitive brokerage rates and research supported by
Internet technology besides investment advice from an experienced team of
research analysts India Infoline also offer real time stock quotes market news
and price charts with multiple tools for technical analysis
Facilities
India Infolinersquos main offices are located in approximately 4000 square
feet of office space located in Mumbai India India Infoline Branches
collectively occupy an additional 10000 square feet of office space located
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 11
throughout India As on March 31 2005 India Infoline has 73 branches across
36 locations in India
Terminals
Almost 52 of the terminals in the sample are based in the Western
region of India followed by 25 in the North 13 in the South and 10 in the
East Mumbai has got the maximum representation from the West Chennai
from the South New Delhi from the North and Kolkata from the East
Branches amp Sub-Brokers
The maximum concentration of branches is in the North with as many
as 40 of all branches located there followed by the Western region with
31 branches Around 24 branches are located in the South and East
constitutes for 5 of the total branches of the total sample
In case of sub-brokers almost 55 of them are based in the South West
and North follow with 30 and 11 sub-brokers respectively whereas East
has around 4 of total sub-brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 12
Financial Markets
The financial markets have been classified as cash market derivatives
market debt market and commodities market Cash market also known as
spot market is the most sought after amongst investors Majority of the
sample broking firms are dealing in the cash market followed by derivative
and commodities 27 firms are dealing only in the cash market whereas 35
are into cash and derivatives Almost 20 firms trade in cash derivatives and
commodities market Firms that are into cash derivatives and debt are 7 On
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13
the other hand firms into cash and commodities are 3 cash amp debt market
and commodities alone are 2 4 firms trade in all the markets
In the cash market around 34 firms trade at NSE 14 at BSE and 52
trade at both exchanges In the equity derivative market 48 of the sampled
broking houses are members of NSE and 7 trade at BSE while 45 of the
sample operate in both stock exchanges Around 43 of the broking houses
operating in the debt market trade at both exchanges with 31 and 26
firms uniquely at NSE and BSE respectively
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14
Products
The survey also revealed that in the past couple of years apart from
trading the firms have started offering various investment related value
added services The sustained growth of the economy in the past couple of
years has resulted in broking firms offering many diversified services related
to IPOs mutual funds company research etc However the core trading
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15
activity is still the predominant form of business forming 90 of the firms in
the sample 67 firms are engaged in offering IPO related services The
broking industry seems to have capitalized on the growth of the mutual fund
industry which was pegged at 40 in 2006 More than 50 of the sample
broking houses deal in mutual fund investment services The average growth
in assets under management in the last two years is almost 48 Company
research is another lucrative area where the broking firms offer their services
more than 33 of the firms are engaged in providing company research
services Additionally a host of other value added services such as
fundamental and technical analysis investment banking arbitrage etc are
offered by the firms at different levels
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16
Of the total sample of broking houses providing trading services 52 are
based in the West followed by 25 from North 13 from South and 10
from the East Around 50 of the firms offering IPO related services are based
in the West as compared to 27 in North 13 in South and 10 in East In
providing mutual funds services the Western region was dominant amounting
to 49 followed by 27 from North The South and the East are almost at par
with 13 and 11 respectively
Future Plans
68 of the firms from the sample have envisaged strategies for future
growth With the middle class Indian investor as well as foreign investor
willing to invest in the stock market majority of the firms preferred expansion
of institutional and the Foreign Institutional Investor clients in their areas of
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17
growth Around 84 have shown interest in expanding their institutional
client base Nearly 51 of such firms are located in the West 25 in North
15 are from South and 9 from East Since the past couple of years India
along with Korea and Taiwan has been one of the preferred destinations for
the FIIs With corporate restructuring rising market capitalization and sectoral
friendly policies helping the FIIs more than two thirds of the firms are
interested in increasing their FII client base Amongst these firms west again
has maximum representation of 53 followed by North with 22 South has
15 firms and East makes up for 9
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19
INTRODUCTION TO INDIAINFOLINE
IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an
independent business research and information provider We gradually evolved into a one-
stop financial services solutions provider Our strong management team comprises competent
and dedicated professionals
We are a pan-India financial services organization across 1361 business locations and a
presence in 428 cities Our global footprint extends across geographies with offices in New
York Singapore and Dubai We are listed on the Bombay Stock Exchange (BSE) and the
National Stock Exchange (NSE)
We offer a wide range of services and products comprising broking (retail and institutional
equities and commodities) wealth management credit and finance insurance asset
management and investment banking
We are registered with the BSE and the NSE for securities trading MCX NCDEX and
DGCX for commodities trading CDSL and NSDL as depository participants We are
registered as a Category I merchant banker and are a SEBI registered portfolio manager We
also received the FII license in IIFL Inc IIFL Securities Pte Ltd received approval from the
Monetary Authority of Singapore to carry out corporate advisory and dealing in securities
operations Two subsidiaries ndash India Infoline Investment Services and Moneyline Credit
Limited ndash are registered with RBI as non-deposit taking non-banking financial services
companies India infoline Housing Finance Ltd the housing finance arm is registered with
the National Housing Bank
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20
HISTROY OF INDIAINFOLINE
The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity
Research and Services Private Limited at Mumbai under the Companies Act 1956 with
Registration No 11 93797 The IndiaInfoline Group commenced its operations as an
independent provider of information analysis and research covering Indian businesses
financial markets and economy to institutional customers We became a public limited
company on April 28 2000 and the name of the Company was changed to Probity Research
and Services Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a
mass retail segment and transformed our business model from providing information services
to institutional customers to retail customers Hence we launched our Internet portal
wwwindiainfolinecom in May 1999 and started providing news and market information
independent research interviews with business leaders and other specialized features
In May 2000 the name of our Company was changed to India Infolinecom Limited
to reflect the transformation of our business Over a period of time we have emerged as one
of the leading business and financial information services provider in India
In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of
financial information and analysis by diversifying into transactional services primarily for
online trading in shares and securities and online as well as offline distribution of personal
financial products like mutual funds and RBI Bonds These activities were carried on by our
wholly owned subsidiaries
The India Infoline Grouprsquos broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July 2000 It
combined competitive brokerage rates and research supported by Internet technology
Besides investment advice from an experienced team of research analysts we also offer real
time stock quotes market news and price charts with multiple tools for technical analysis
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21
Acquisition of Agri Marketing Services Limited (Agri)
In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri
Marketing Services Limited from their owners in exchange for the issuance of 508482 of
our equity shares Agri was a direct selling agent of personal financial products including
mutual funds fixed deposits corporate bonds and post-office instruments At the time of our
acquisition Agri operated 32 branches in South and West India serving more than 30000
customers with a staff of approximately 180 employees After the acquisition we changed
the company name to India Infolinecom Distribution Company Limited
The India Infoline group comprising the holding company India Infoline Ltd (NSE
INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian
financial services space India Infoline offers the entire gamut of financial services covering
investment products ranging from Equities and derivatives Commodities Portfolio
Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment
Banking GoI bonds and other small savings instruments It owns and manages the website
wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal
finance stock markets economy and business
A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none
other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo
IndiaInfolinersquos research is available not just over the internet but also on international wire
services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is
amongst the most read Indian brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22
A network of 753 business locations spread over 346 cities across India facilitates the
smooth acquisition and servicing of a large customer base All these offices are connected
with the corporate office in Mumbai with cutting edge networking technology
The group caters to a customer base of over 500000 over a variety of mediums viz online
over the phone and at our branches The Group is strengthening its institutional broking and
investment banking services and has built a team of experienced research analysts sales and
trading professionals
IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will
give a more meaningful picture of the Company to the investors Reference to the company
or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise
specified
VISION
Our vision is to be the most respected company in the financial services space
MISSION
ldquoTo become a full-fledged financial services company known for its quality of advice
personalized services and cutting edge technologyrdquo
COMPANY PHILISOPHY
The IndiaInfoline Group is committed to placing the Investor First by continuously striving
to increase the efficiency of the operations as well as the systems and processes for use of
corporate resources in such a way so as to maximize the value to the stakeholders The Group
aims at achieving not only the highest possible standards of legal and regulatory compliances
but also of effective management
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23
COMMITTEE
Audit Committee
Terms of reference amp Composition Name of members and Chairman The Audit committee
comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv
Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and
Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as
under - To investigate into any matter that may be prescribed under the provisions of Section
292A of The Companies Act 1956 - Recommendation and removal of External Auditor and
fixation of the Audit Fees - Reviewing with the management the financial statements before
submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and
disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function
Compensation Remuneration Committee
Terms of reference amp Composition Name of members and Chairman The Compensation
Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr
Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of
reference of this committee are as under - To fix suitable remuneration package of all the
Executive Directors and Non Executive Directors Senior Employees and officers ie Salary
perquisites bonuses stock options pensions etc - Determination of the fixed component and
performance linked incentives alongwith the performance criteria to all employees of the
company - Service Contracts Notice Period Severance Fees of Directors and employees -
Stock Option details whether to be issued at discount as well as the period over which to be
accrued and over which exercisable - To conduct discussions with the HR department and
form suitable remuneration policies
Share Transfer and Investor Grievance Committee
Details of the Members Compliance Officer No of Complaints received and pending and
pending transfers as on close of the financial year The committee functions under the
Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24
Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R
Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance
Officer of the Company
COMPANY STRUCTURE
IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock
Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory
Services and Portfolio Management Services It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with
NSDL as well as CDSL as a depository participant providing a one-stop solution for clients
trading in the equities market It has recently launched its Investment banking and
Institutional Broking business
A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients
These services are offered to clients as different schemes which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 4
PREFACE
PGDM program is one of the most reputed professional courses in the field of
Management Training is an integral part of PGDM (MBA) As a
complementary to that every trainee has to submit a report on the research work
conducted in that institute
This report is thus prepared for the project work done at Indiainfoline
Rajajinagar branch The topic of the project is ldquoComparative analysis of
investment in equity and mutual fund schemes with reference to IndiaInfolinerdquo
Investment means putting your money to work to earn more money If done
wisely it can help to meet ones financial goals like buying a new house paying
for a college education education enjoying a comfortable retirement or
whatever is important to an individual
One needs to make decisions about how much heshe wants to invest and where
to invest To choose he needs to know current good options available and their
relative risk exposures These help are given to a client in Indiainfoline as to in
which portfolio they can invest and what risks are related to it They manage all
the respected returns of their clients and timely inform them for the switching to
be done between funds in cases of expected downfall in returns of their Mutual
Funds in future
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 5
INDEX NO PARTICULAR
1 INDUSTRY PROFILE
FINANCIAL MARKETS
2 COMPANY PROFILE
INTRODUCTION TO INDIA INFOLINE
HISTORY OF INDAIINFOLINE
VISION
MISSION
COMPANYrsquoS PHILOSHOPY
COMMITTEE
COMPANY STRUCTURE
PRODUCT amp SERVICE
MILESTONES ACHIVED
MARKET SHARE OF COMPANY
CHALLENGE FACED BY INDIAINFOLINE
MARKETING STRATGY OF INDIAINFOLINE
HUMAN RESOURCES
3 RESEARCH METHODOLOGY
OBJECTIVE OF STUDY
DATA COLLECTION
FUNDAMENTAL RESEARCH SERVICE
TECHNICAL RESEARCH SERVICE
SWOT ANALYSIS
PORTERrsquoS FIVE FORCE MODEL
4 DATA ANALYSIS
FINANCIAL PERFORMANCE
P amp L ACCOUNT OF INDIAINFOLINE
BALANCE SHEET OF INDIAINFOLINE
COMPITITORS
COMPARATIVE ANALYSIS OF CHARGES amp
FACILITIES PROVIDED BY DIFFERENT COMPANY
PERFORMANCE HIGHLIGHT 2008-09
HIGHLIGHTS 2008-09 INDUSTRY OPTIMISM
5 FINDING
6 RECOMMENDATION
7 CONCLUSION
8 BIBLIOGRPHY
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 6
INDUSTRY PROFILE
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 7
INDUSTRY PROFILE
The Indian broking industry is one of the oldest trading industries that have
been around even before the establishment of the BSE in 1875 Despite
passing through number of changes in the post liberalization period the
industry has found its way onwards sustainable growth With the purpose of
gaining a deeper understanding about the role of the Indian stock broking
industry in the countryrsquos economy we present in this section some of the
industry insights gleaned from analysis of data received through primary
research
For the broking industry we started with an initial database of over
1800 broking firms that were contacted from which 464 responses were
received The list was further short listed based on the number of terminals
and the top 210 were selected for profiling 394 responses that provided
more than 85 of the information sought have been included for this analysis
presented here as insights All the data for the study was collected through
responses received directly from the broking firms The insights have been
arrived at through an analysis on various parameters pertinent to the equity
broking industry such as region terminal market branches sub brokers
products and growth areas
Some key characteristics of the sample 394 firms are
On the basis of geographical concentration the West region has the
maximum representation of 52 Around 24 firms are located in the
North 13 in the South and 10 in the East
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 8
3 firms started broking operations before 1950 65 between 1950-
1995 and 32 post 1995
On the basis of terminals 40 are located at Mumbai 12 in Delhi 8
in Ahmedabad 7 in Kolkata 4 in Chennai and 29 are from other
cities
From this study we find that almost 36 firms trade in cash and
derivatives and 27 are into cash markets alone Around 20 trade in
cash derivatives and commodities
In the cash market around 34 firms trade at NSE 14 at BSE and 52
trade at both exchanges In the derivative segment 48 trade at NSE
7 at BSE and 45 at both whereas in the debt market 31 trade at
NSE 26 at BSE and 43 at both exchanges
Majority of branches are located in the North ie around 40 West has
31 24 are located in South and 5 in East
In terms of sub-brokers around 55 are located in the South 29 in
West 11 in North and 4 in East
Trading IPOs and Mutual Funds are the top three products offered with
90 firms offering trading 67 IPOs and 53 firms offering mutual fund
transactions
In terms of various areas of growth 84 firms have expressed interest in
expanding their institutional clients 66 firms intend to increase FII
clients and 43 are interested in setting up JV in India and abroad
In terms of IT penetration 62 firms have provided their website and
around 94 firms have email facility
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 9
A BRIEF HISTORY
India Infoline was originally incorporated on October 18 1995 as
Probity Research and Services Private Limited at Mumbai under the Companies
Act 1956 with Registration No 11 93797 India Infoline commenced
operations as an independent provider of information analysis and research
covering Indian businesses financial markets and economy to institutional
customers India Infoline became a public limited company on April 28 2000
and the name of the Company was changed to Probity Research and Services
Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 India Infolinecom identified the potential of the Internet to
cater to a mass retail segment and transformed our business model from
providing information services to institutional customers to retail customers
Hence India Infoline launched Internet portal wwwindiainfolinecom in May
1999 and started providing news and market information independent
research interviews with business leaders and other specialized features
In May 2000 the name of India Infoline was changed to India
Infolinecom Limited to reflect the transformation of our business Over a
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 10
period of time India Infolinecom has emerged as one of the leading business
and financial information services provider in India
In the year 2000 India Infoline leveraged its position as a provider of
financial information and analysis by diversifying into transactional services
primarily for online trading in shares and securities and online as well as offline
distribution of personal financial products like mutual funds and RBI Bonds
These activities were carried on by our wholly owned subsidiaries
India Infoline broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July
2000 It combined competitive brokerage rates and research supported by
Internet technology besides investment advice from an experienced team of
research analysts India Infoline also offer real time stock quotes market news
and price charts with multiple tools for technical analysis
Facilities
India Infolinersquos main offices are located in approximately 4000 square
feet of office space located in Mumbai India India Infoline Branches
collectively occupy an additional 10000 square feet of office space located
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 11
throughout India As on March 31 2005 India Infoline has 73 branches across
36 locations in India
Terminals
Almost 52 of the terminals in the sample are based in the Western
region of India followed by 25 in the North 13 in the South and 10 in the
East Mumbai has got the maximum representation from the West Chennai
from the South New Delhi from the North and Kolkata from the East
Branches amp Sub-Brokers
The maximum concentration of branches is in the North with as many
as 40 of all branches located there followed by the Western region with
31 branches Around 24 branches are located in the South and East
constitutes for 5 of the total branches of the total sample
In case of sub-brokers almost 55 of them are based in the South West
and North follow with 30 and 11 sub-brokers respectively whereas East
has around 4 of total sub-brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 12
Financial Markets
The financial markets have been classified as cash market derivatives
market debt market and commodities market Cash market also known as
spot market is the most sought after amongst investors Majority of the
sample broking firms are dealing in the cash market followed by derivative
and commodities 27 firms are dealing only in the cash market whereas 35
are into cash and derivatives Almost 20 firms trade in cash derivatives and
commodities market Firms that are into cash derivatives and debt are 7 On
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13
the other hand firms into cash and commodities are 3 cash amp debt market
and commodities alone are 2 4 firms trade in all the markets
In the cash market around 34 firms trade at NSE 14 at BSE and 52
trade at both exchanges In the equity derivative market 48 of the sampled
broking houses are members of NSE and 7 trade at BSE while 45 of the
sample operate in both stock exchanges Around 43 of the broking houses
operating in the debt market trade at both exchanges with 31 and 26
firms uniquely at NSE and BSE respectively
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14
Products
The survey also revealed that in the past couple of years apart from
trading the firms have started offering various investment related value
added services The sustained growth of the economy in the past couple of
years has resulted in broking firms offering many diversified services related
to IPOs mutual funds company research etc However the core trading
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15
activity is still the predominant form of business forming 90 of the firms in
the sample 67 firms are engaged in offering IPO related services The
broking industry seems to have capitalized on the growth of the mutual fund
industry which was pegged at 40 in 2006 More than 50 of the sample
broking houses deal in mutual fund investment services The average growth
in assets under management in the last two years is almost 48 Company
research is another lucrative area where the broking firms offer their services
more than 33 of the firms are engaged in providing company research
services Additionally a host of other value added services such as
fundamental and technical analysis investment banking arbitrage etc are
offered by the firms at different levels
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16
Of the total sample of broking houses providing trading services 52 are
based in the West followed by 25 from North 13 from South and 10
from the East Around 50 of the firms offering IPO related services are based
in the West as compared to 27 in North 13 in South and 10 in East In
providing mutual funds services the Western region was dominant amounting
to 49 followed by 27 from North The South and the East are almost at par
with 13 and 11 respectively
Future Plans
68 of the firms from the sample have envisaged strategies for future
growth With the middle class Indian investor as well as foreign investor
willing to invest in the stock market majority of the firms preferred expansion
of institutional and the Foreign Institutional Investor clients in their areas of
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17
growth Around 84 have shown interest in expanding their institutional
client base Nearly 51 of such firms are located in the West 25 in North
15 are from South and 9 from East Since the past couple of years India
along with Korea and Taiwan has been one of the preferred destinations for
the FIIs With corporate restructuring rising market capitalization and sectoral
friendly policies helping the FIIs more than two thirds of the firms are
interested in increasing their FII client base Amongst these firms west again
has maximum representation of 53 followed by North with 22 South has
15 firms and East makes up for 9
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19
INTRODUCTION TO INDIAINFOLINE
IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an
independent business research and information provider We gradually evolved into a one-
stop financial services solutions provider Our strong management team comprises competent
and dedicated professionals
We are a pan-India financial services organization across 1361 business locations and a
presence in 428 cities Our global footprint extends across geographies with offices in New
York Singapore and Dubai We are listed on the Bombay Stock Exchange (BSE) and the
National Stock Exchange (NSE)
We offer a wide range of services and products comprising broking (retail and institutional
equities and commodities) wealth management credit and finance insurance asset
management and investment banking
We are registered with the BSE and the NSE for securities trading MCX NCDEX and
DGCX for commodities trading CDSL and NSDL as depository participants We are
registered as a Category I merchant banker and are a SEBI registered portfolio manager We
also received the FII license in IIFL Inc IIFL Securities Pte Ltd received approval from the
Monetary Authority of Singapore to carry out corporate advisory and dealing in securities
operations Two subsidiaries ndash India Infoline Investment Services and Moneyline Credit
Limited ndash are registered with RBI as non-deposit taking non-banking financial services
companies India infoline Housing Finance Ltd the housing finance arm is registered with
the National Housing Bank
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20
HISTROY OF INDIAINFOLINE
The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity
Research and Services Private Limited at Mumbai under the Companies Act 1956 with
Registration No 11 93797 The IndiaInfoline Group commenced its operations as an
independent provider of information analysis and research covering Indian businesses
financial markets and economy to institutional customers We became a public limited
company on April 28 2000 and the name of the Company was changed to Probity Research
and Services Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a
mass retail segment and transformed our business model from providing information services
to institutional customers to retail customers Hence we launched our Internet portal
wwwindiainfolinecom in May 1999 and started providing news and market information
independent research interviews with business leaders and other specialized features
In May 2000 the name of our Company was changed to India Infolinecom Limited
to reflect the transformation of our business Over a period of time we have emerged as one
of the leading business and financial information services provider in India
In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of
financial information and analysis by diversifying into transactional services primarily for
online trading in shares and securities and online as well as offline distribution of personal
financial products like mutual funds and RBI Bonds These activities were carried on by our
wholly owned subsidiaries
The India Infoline Grouprsquos broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July 2000 It
combined competitive brokerage rates and research supported by Internet technology
Besides investment advice from an experienced team of research analysts we also offer real
time stock quotes market news and price charts with multiple tools for technical analysis
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21
Acquisition of Agri Marketing Services Limited (Agri)
In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri
Marketing Services Limited from their owners in exchange for the issuance of 508482 of
our equity shares Agri was a direct selling agent of personal financial products including
mutual funds fixed deposits corporate bonds and post-office instruments At the time of our
acquisition Agri operated 32 branches in South and West India serving more than 30000
customers with a staff of approximately 180 employees After the acquisition we changed
the company name to India Infolinecom Distribution Company Limited
The India Infoline group comprising the holding company India Infoline Ltd (NSE
INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian
financial services space India Infoline offers the entire gamut of financial services covering
investment products ranging from Equities and derivatives Commodities Portfolio
Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment
Banking GoI bonds and other small savings instruments It owns and manages the website
wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal
finance stock markets economy and business
A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none
other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo
IndiaInfolinersquos research is available not just over the internet but also on international wire
services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is
amongst the most read Indian brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22
A network of 753 business locations spread over 346 cities across India facilitates the
smooth acquisition and servicing of a large customer base All these offices are connected
with the corporate office in Mumbai with cutting edge networking technology
The group caters to a customer base of over 500000 over a variety of mediums viz online
over the phone and at our branches The Group is strengthening its institutional broking and
investment banking services and has built a team of experienced research analysts sales and
trading professionals
IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will
give a more meaningful picture of the Company to the investors Reference to the company
or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise
specified
VISION
Our vision is to be the most respected company in the financial services space
MISSION
ldquoTo become a full-fledged financial services company known for its quality of advice
personalized services and cutting edge technologyrdquo
COMPANY PHILISOPHY
The IndiaInfoline Group is committed to placing the Investor First by continuously striving
to increase the efficiency of the operations as well as the systems and processes for use of
corporate resources in such a way so as to maximize the value to the stakeholders The Group
aims at achieving not only the highest possible standards of legal and regulatory compliances
but also of effective management
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23
COMMITTEE
Audit Committee
Terms of reference amp Composition Name of members and Chairman The Audit committee
comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv
Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and
Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as
under - To investigate into any matter that may be prescribed under the provisions of Section
292A of The Companies Act 1956 - Recommendation and removal of External Auditor and
fixation of the Audit Fees - Reviewing with the management the financial statements before
submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and
disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function
Compensation Remuneration Committee
Terms of reference amp Composition Name of members and Chairman The Compensation
Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr
Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of
reference of this committee are as under - To fix suitable remuneration package of all the
Executive Directors and Non Executive Directors Senior Employees and officers ie Salary
perquisites bonuses stock options pensions etc - Determination of the fixed component and
performance linked incentives alongwith the performance criteria to all employees of the
company - Service Contracts Notice Period Severance Fees of Directors and employees -
Stock Option details whether to be issued at discount as well as the period over which to be
accrued and over which exercisable - To conduct discussions with the HR department and
form suitable remuneration policies
Share Transfer and Investor Grievance Committee
Details of the Members Compliance Officer No of Complaints received and pending and
pending transfers as on close of the financial year The committee functions under the
Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24
Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R
Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance
Officer of the Company
COMPANY STRUCTURE
IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock
Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory
Services and Portfolio Management Services It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with
NSDL as well as CDSL as a depository participant providing a one-stop solution for clients
trading in the equities market It has recently launched its Investment banking and
Institutional Broking business
A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients
These services are offered to clients as different schemes which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 5
INDEX NO PARTICULAR
1 INDUSTRY PROFILE
FINANCIAL MARKETS
2 COMPANY PROFILE
INTRODUCTION TO INDIA INFOLINE
HISTORY OF INDAIINFOLINE
VISION
MISSION
COMPANYrsquoS PHILOSHOPY
COMMITTEE
COMPANY STRUCTURE
PRODUCT amp SERVICE
MILESTONES ACHIVED
MARKET SHARE OF COMPANY
CHALLENGE FACED BY INDIAINFOLINE
MARKETING STRATGY OF INDIAINFOLINE
HUMAN RESOURCES
3 RESEARCH METHODOLOGY
OBJECTIVE OF STUDY
DATA COLLECTION
FUNDAMENTAL RESEARCH SERVICE
TECHNICAL RESEARCH SERVICE
SWOT ANALYSIS
PORTERrsquoS FIVE FORCE MODEL
4 DATA ANALYSIS
FINANCIAL PERFORMANCE
P amp L ACCOUNT OF INDIAINFOLINE
BALANCE SHEET OF INDIAINFOLINE
COMPITITORS
COMPARATIVE ANALYSIS OF CHARGES amp
FACILITIES PROVIDED BY DIFFERENT COMPANY
PERFORMANCE HIGHLIGHT 2008-09
HIGHLIGHTS 2008-09 INDUSTRY OPTIMISM
5 FINDING
6 RECOMMENDATION
7 CONCLUSION
8 BIBLIOGRPHY
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 6
INDUSTRY PROFILE
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 7
INDUSTRY PROFILE
The Indian broking industry is one of the oldest trading industries that have
been around even before the establishment of the BSE in 1875 Despite
passing through number of changes in the post liberalization period the
industry has found its way onwards sustainable growth With the purpose of
gaining a deeper understanding about the role of the Indian stock broking
industry in the countryrsquos economy we present in this section some of the
industry insights gleaned from analysis of data received through primary
research
For the broking industry we started with an initial database of over
1800 broking firms that were contacted from which 464 responses were
received The list was further short listed based on the number of terminals
and the top 210 were selected for profiling 394 responses that provided
more than 85 of the information sought have been included for this analysis
presented here as insights All the data for the study was collected through
responses received directly from the broking firms The insights have been
arrived at through an analysis on various parameters pertinent to the equity
broking industry such as region terminal market branches sub brokers
products and growth areas
Some key characteristics of the sample 394 firms are
On the basis of geographical concentration the West region has the
maximum representation of 52 Around 24 firms are located in the
North 13 in the South and 10 in the East
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 8
3 firms started broking operations before 1950 65 between 1950-
1995 and 32 post 1995
On the basis of terminals 40 are located at Mumbai 12 in Delhi 8
in Ahmedabad 7 in Kolkata 4 in Chennai and 29 are from other
cities
From this study we find that almost 36 firms trade in cash and
derivatives and 27 are into cash markets alone Around 20 trade in
cash derivatives and commodities
In the cash market around 34 firms trade at NSE 14 at BSE and 52
trade at both exchanges In the derivative segment 48 trade at NSE
7 at BSE and 45 at both whereas in the debt market 31 trade at
NSE 26 at BSE and 43 at both exchanges
Majority of branches are located in the North ie around 40 West has
31 24 are located in South and 5 in East
In terms of sub-brokers around 55 are located in the South 29 in
West 11 in North and 4 in East
Trading IPOs and Mutual Funds are the top three products offered with
90 firms offering trading 67 IPOs and 53 firms offering mutual fund
transactions
In terms of various areas of growth 84 firms have expressed interest in
expanding their institutional clients 66 firms intend to increase FII
clients and 43 are interested in setting up JV in India and abroad
In terms of IT penetration 62 firms have provided their website and
around 94 firms have email facility
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 9
A BRIEF HISTORY
India Infoline was originally incorporated on October 18 1995 as
Probity Research and Services Private Limited at Mumbai under the Companies
Act 1956 with Registration No 11 93797 India Infoline commenced
operations as an independent provider of information analysis and research
covering Indian businesses financial markets and economy to institutional
customers India Infoline became a public limited company on April 28 2000
and the name of the Company was changed to Probity Research and Services
Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 India Infolinecom identified the potential of the Internet to
cater to a mass retail segment and transformed our business model from
providing information services to institutional customers to retail customers
Hence India Infoline launched Internet portal wwwindiainfolinecom in May
1999 and started providing news and market information independent
research interviews with business leaders and other specialized features
In May 2000 the name of India Infoline was changed to India
Infolinecom Limited to reflect the transformation of our business Over a
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 10
period of time India Infolinecom has emerged as one of the leading business
and financial information services provider in India
In the year 2000 India Infoline leveraged its position as a provider of
financial information and analysis by diversifying into transactional services
primarily for online trading in shares and securities and online as well as offline
distribution of personal financial products like mutual funds and RBI Bonds
These activities were carried on by our wholly owned subsidiaries
India Infoline broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July
2000 It combined competitive brokerage rates and research supported by
Internet technology besides investment advice from an experienced team of
research analysts India Infoline also offer real time stock quotes market news
and price charts with multiple tools for technical analysis
Facilities
India Infolinersquos main offices are located in approximately 4000 square
feet of office space located in Mumbai India India Infoline Branches
collectively occupy an additional 10000 square feet of office space located
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 11
throughout India As on March 31 2005 India Infoline has 73 branches across
36 locations in India
Terminals
Almost 52 of the terminals in the sample are based in the Western
region of India followed by 25 in the North 13 in the South and 10 in the
East Mumbai has got the maximum representation from the West Chennai
from the South New Delhi from the North and Kolkata from the East
Branches amp Sub-Brokers
The maximum concentration of branches is in the North with as many
as 40 of all branches located there followed by the Western region with
31 branches Around 24 branches are located in the South and East
constitutes for 5 of the total branches of the total sample
In case of sub-brokers almost 55 of them are based in the South West
and North follow with 30 and 11 sub-brokers respectively whereas East
has around 4 of total sub-brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 12
Financial Markets
The financial markets have been classified as cash market derivatives
market debt market and commodities market Cash market also known as
spot market is the most sought after amongst investors Majority of the
sample broking firms are dealing in the cash market followed by derivative
and commodities 27 firms are dealing only in the cash market whereas 35
are into cash and derivatives Almost 20 firms trade in cash derivatives and
commodities market Firms that are into cash derivatives and debt are 7 On
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13
the other hand firms into cash and commodities are 3 cash amp debt market
and commodities alone are 2 4 firms trade in all the markets
In the cash market around 34 firms trade at NSE 14 at BSE and 52
trade at both exchanges In the equity derivative market 48 of the sampled
broking houses are members of NSE and 7 trade at BSE while 45 of the
sample operate in both stock exchanges Around 43 of the broking houses
operating in the debt market trade at both exchanges with 31 and 26
firms uniquely at NSE and BSE respectively
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14
Products
The survey also revealed that in the past couple of years apart from
trading the firms have started offering various investment related value
added services The sustained growth of the economy in the past couple of
years has resulted in broking firms offering many diversified services related
to IPOs mutual funds company research etc However the core trading
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15
activity is still the predominant form of business forming 90 of the firms in
the sample 67 firms are engaged in offering IPO related services The
broking industry seems to have capitalized on the growth of the mutual fund
industry which was pegged at 40 in 2006 More than 50 of the sample
broking houses deal in mutual fund investment services The average growth
in assets under management in the last two years is almost 48 Company
research is another lucrative area where the broking firms offer their services
more than 33 of the firms are engaged in providing company research
services Additionally a host of other value added services such as
fundamental and technical analysis investment banking arbitrage etc are
offered by the firms at different levels
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16
Of the total sample of broking houses providing trading services 52 are
based in the West followed by 25 from North 13 from South and 10
from the East Around 50 of the firms offering IPO related services are based
in the West as compared to 27 in North 13 in South and 10 in East In
providing mutual funds services the Western region was dominant amounting
to 49 followed by 27 from North The South and the East are almost at par
with 13 and 11 respectively
Future Plans
68 of the firms from the sample have envisaged strategies for future
growth With the middle class Indian investor as well as foreign investor
willing to invest in the stock market majority of the firms preferred expansion
of institutional and the Foreign Institutional Investor clients in their areas of
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17
growth Around 84 have shown interest in expanding their institutional
client base Nearly 51 of such firms are located in the West 25 in North
15 are from South and 9 from East Since the past couple of years India
along with Korea and Taiwan has been one of the preferred destinations for
the FIIs With corporate restructuring rising market capitalization and sectoral
friendly policies helping the FIIs more than two thirds of the firms are
interested in increasing their FII client base Amongst these firms west again
has maximum representation of 53 followed by North with 22 South has
15 firms and East makes up for 9
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19
INTRODUCTION TO INDIAINFOLINE
IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an
independent business research and information provider We gradually evolved into a one-
stop financial services solutions provider Our strong management team comprises competent
and dedicated professionals
We are a pan-India financial services organization across 1361 business locations and a
presence in 428 cities Our global footprint extends across geographies with offices in New
York Singapore and Dubai We are listed on the Bombay Stock Exchange (BSE) and the
National Stock Exchange (NSE)
We offer a wide range of services and products comprising broking (retail and institutional
equities and commodities) wealth management credit and finance insurance asset
management and investment banking
We are registered with the BSE and the NSE for securities trading MCX NCDEX and
DGCX for commodities trading CDSL and NSDL as depository participants We are
registered as a Category I merchant banker and are a SEBI registered portfolio manager We
also received the FII license in IIFL Inc IIFL Securities Pte Ltd received approval from the
Monetary Authority of Singapore to carry out corporate advisory and dealing in securities
operations Two subsidiaries ndash India Infoline Investment Services and Moneyline Credit
Limited ndash are registered with RBI as non-deposit taking non-banking financial services
companies India infoline Housing Finance Ltd the housing finance arm is registered with
the National Housing Bank
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20
HISTROY OF INDIAINFOLINE
The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity
Research and Services Private Limited at Mumbai under the Companies Act 1956 with
Registration No 11 93797 The IndiaInfoline Group commenced its operations as an
independent provider of information analysis and research covering Indian businesses
financial markets and economy to institutional customers We became a public limited
company on April 28 2000 and the name of the Company was changed to Probity Research
and Services Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a
mass retail segment and transformed our business model from providing information services
to institutional customers to retail customers Hence we launched our Internet portal
wwwindiainfolinecom in May 1999 and started providing news and market information
independent research interviews with business leaders and other specialized features
In May 2000 the name of our Company was changed to India Infolinecom Limited
to reflect the transformation of our business Over a period of time we have emerged as one
of the leading business and financial information services provider in India
In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of
financial information and analysis by diversifying into transactional services primarily for
online trading in shares and securities and online as well as offline distribution of personal
financial products like mutual funds and RBI Bonds These activities were carried on by our
wholly owned subsidiaries
The India Infoline Grouprsquos broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July 2000 It
combined competitive brokerage rates and research supported by Internet technology
Besides investment advice from an experienced team of research analysts we also offer real
time stock quotes market news and price charts with multiple tools for technical analysis
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21
Acquisition of Agri Marketing Services Limited (Agri)
In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri
Marketing Services Limited from their owners in exchange for the issuance of 508482 of
our equity shares Agri was a direct selling agent of personal financial products including
mutual funds fixed deposits corporate bonds and post-office instruments At the time of our
acquisition Agri operated 32 branches in South and West India serving more than 30000
customers with a staff of approximately 180 employees After the acquisition we changed
the company name to India Infolinecom Distribution Company Limited
The India Infoline group comprising the holding company India Infoline Ltd (NSE
INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian
financial services space India Infoline offers the entire gamut of financial services covering
investment products ranging from Equities and derivatives Commodities Portfolio
Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment
Banking GoI bonds and other small savings instruments It owns and manages the website
wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal
finance stock markets economy and business
A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none
other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo
IndiaInfolinersquos research is available not just over the internet but also on international wire
services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is
amongst the most read Indian brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22
A network of 753 business locations spread over 346 cities across India facilitates the
smooth acquisition and servicing of a large customer base All these offices are connected
with the corporate office in Mumbai with cutting edge networking technology
The group caters to a customer base of over 500000 over a variety of mediums viz online
over the phone and at our branches The Group is strengthening its institutional broking and
investment banking services and has built a team of experienced research analysts sales and
trading professionals
IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will
give a more meaningful picture of the Company to the investors Reference to the company
or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise
specified
VISION
Our vision is to be the most respected company in the financial services space
MISSION
ldquoTo become a full-fledged financial services company known for its quality of advice
personalized services and cutting edge technologyrdquo
COMPANY PHILISOPHY
The IndiaInfoline Group is committed to placing the Investor First by continuously striving
to increase the efficiency of the operations as well as the systems and processes for use of
corporate resources in such a way so as to maximize the value to the stakeholders The Group
aims at achieving not only the highest possible standards of legal and regulatory compliances
but also of effective management
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23
COMMITTEE
Audit Committee
Terms of reference amp Composition Name of members and Chairman The Audit committee
comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv
Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and
Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as
under - To investigate into any matter that may be prescribed under the provisions of Section
292A of The Companies Act 1956 - Recommendation and removal of External Auditor and
fixation of the Audit Fees - Reviewing with the management the financial statements before
submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and
disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function
Compensation Remuneration Committee
Terms of reference amp Composition Name of members and Chairman The Compensation
Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr
Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of
reference of this committee are as under - To fix suitable remuneration package of all the
Executive Directors and Non Executive Directors Senior Employees and officers ie Salary
perquisites bonuses stock options pensions etc - Determination of the fixed component and
performance linked incentives alongwith the performance criteria to all employees of the
company - Service Contracts Notice Period Severance Fees of Directors and employees -
Stock Option details whether to be issued at discount as well as the period over which to be
accrued and over which exercisable - To conduct discussions with the HR department and
form suitable remuneration policies
Share Transfer and Investor Grievance Committee
Details of the Members Compliance Officer No of Complaints received and pending and
pending transfers as on close of the financial year The committee functions under the
Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24
Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R
Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance
Officer of the Company
COMPANY STRUCTURE
IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock
Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory
Services and Portfolio Management Services It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with
NSDL as well as CDSL as a depository participant providing a one-stop solution for clients
trading in the equities market It has recently launched its Investment banking and
Institutional Broking business
A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients
These services are offered to clients as different schemes which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 6
INDUSTRY PROFILE
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 7
INDUSTRY PROFILE
The Indian broking industry is one of the oldest trading industries that have
been around even before the establishment of the BSE in 1875 Despite
passing through number of changes in the post liberalization period the
industry has found its way onwards sustainable growth With the purpose of
gaining a deeper understanding about the role of the Indian stock broking
industry in the countryrsquos economy we present in this section some of the
industry insights gleaned from analysis of data received through primary
research
For the broking industry we started with an initial database of over
1800 broking firms that were contacted from which 464 responses were
received The list was further short listed based on the number of terminals
and the top 210 were selected for profiling 394 responses that provided
more than 85 of the information sought have been included for this analysis
presented here as insights All the data for the study was collected through
responses received directly from the broking firms The insights have been
arrived at through an analysis on various parameters pertinent to the equity
broking industry such as region terminal market branches sub brokers
products and growth areas
Some key characteristics of the sample 394 firms are
On the basis of geographical concentration the West region has the
maximum representation of 52 Around 24 firms are located in the
North 13 in the South and 10 in the East
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 8
3 firms started broking operations before 1950 65 between 1950-
1995 and 32 post 1995
On the basis of terminals 40 are located at Mumbai 12 in Delhi 8
in Ahmedabad 7 in Kolkata 4 in Chennai and 29 are from other
cities
From this study we find that almost 36 firms trade in cash and
derivatives and 27 are into cash markets alone Around 20 trade in
cash derivatives and commodities
In the cash market around 34 firms trade at NSE 14 at BSE and 52
trade at both exchanges In the derivative segment 48 trade at NSE
7 at BSE and 45 at both whereas in the debt market 31 trade at
NSE 26 at BSE and 43 at both exchanges
Majority of branches are located in the North ie around 40 West has
31 24 are located in South and 5 in East
In terms of sub-brokers around 55 are located in the South 29 in
West 11 in North and 4 in East
Trading IPOs and Mutual Funds are the top three products offered with
90 firms offering trading 67 IPOs and 53 firms offering mutual fund
transactions
In terms of various areas of growth 84 firms have expressed interest in
expanding their institutional clients 66 firms intend to increase FII
clients and 43 are interested in setting up JV in India and abroad
In terms of IT penetration 62 firms have provided their website and
around 94 firms have email facility
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 9
A BRIEF HISTORY
India Infoline was originally incorporated on October 18 1995 as
Probity Research and Services Private Limited at Mumbai under the Companies
Act 1956 with Registration No 11 93797 India Infoline commenced
operations as an independent provider of information analysis and research
covering Indian businesses financial markets and economy to institutional
customers India Infoline became a public limited company on April 28 2000
and the name of the Company was changed to Probity Research and Services
Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 India Infolinecom identified the potential of the Internet to
cater to a mass retail segment and transformed our business model from
providing information services to institutional customers to retail customers
Hence India Infoline launched Internet portal wwwindiainfolinecom in May
1999 and started providing news and market information independent
research interviews with business leaders and other specialized features
In May 2000 the name of India Infoline was changed to India
Infolinecom Limited to reflect the transformation of our business Over a
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 10
period of time India Infolinecom has emerged as one of the leading business
and financial information services provider in India
In the year 2000 India Infoline leveraged its position as a provider of
financial information and analysis by diversifying into transactional services
primarily for online trading in shares and securities and online as well as offline
distribution of personal financial products like mutual funds and RBI Bonds
These activities were carried on by our wholly owned subsidiaries
India Infoline broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July
2000 It combined competitive brokerage rates and research supported by
Internet technology besides investment advice from an experienced team of
research analysts India Infoline also offer real time stock quotes market news
and price charts with multiple tools for technical analysis
Facilities
India Infolinersquos main offices are located in approximately 4000 square
feet of office space located in Mumbai India India Infoline Branches
collectively occupy an additional 10000 square feet of office space located
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 11
throughout India As on March 31 2005 India Infoline has 73 branches across
36 locations in India
Terminals
Almost 52 of the terminals in the sample are based in the Western
region of India followed by 25 in the North 13 in the South and 10 in the
East Mumbai has got the maximum representation from the West Chennai
from the South New Delhi from the North and Kolkata from the East
Branches amp Sub-Brokers
The maximum concentration of branches is in the North with as many
as 40 of all branches located there followed by the Western region with
31 branches Around 24 branches are located in the South and East
constitutes for 5 of the total branches of the total sample
In case of sub-brokers almost 55 of them are based in the South West
and North follow with 30 and 11 sub-brokers respectively whereas East
has around 4 of total sub-brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 12
Financial Markets
The financial markets have been classified as cash market derivatives
market debt market and commodities market Cash market also known as
spot market is the most sought after amongst investors Majority of the
sample broking firms are dealing in the cash market followed by derivative
and commodities 27 firms are dealing only in the cash market whereas 35
are into cash and derivatives Almost 20 firms trade in cash derivatives and
commodities market Firms that are into cash derivatives and debt are 7 On
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13
the other hand firms into cash and commodities are 3 cash amp debt market
and commodities alone are 2 4 firms trade in all the markets
In the cash market around 34 firms trade at NSE 14 at BSE and 52
trade at both exchanges In the equity derivative market 48 of the sampled
broking houses are members of NSE and 7 trade at BSE while 45 of the
sample operate in both stock exchanges Around 43 of the broking houses
operating in the debt market trade at both exchanges with 31 and 26
firms uniquely at NSE and BSE respectively
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14
Products
The survey also revealed that in the past couple of years apart from
trading the firms have started offering various investment related value
added services The sustained growth of the economy in the past couple of
years has resulted in broking firms offering many diversified services related
to IPOs mutual funds company research etc However the core trading
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15
activity is still the predominant form of business forming 90 of the firms in
the sample 67 firms are engaged in offering IPO related services The
broking industry seems to have capitalized on the growth of the mutual fund
industry which was pegged at 40 in 2006 More than 50 of the sample
broking houses deal in mutual fund investment services The average growth
in assets under management in the last two years is almost 48 Company
research is another lucrative area where the broking firms offer their services
more than 33 of the firms are engaged in providing company research
services Additionally a host of other value added services such as
fundamental and technical analysis investment banking arbitrage etc are
offered by the firms at different levels
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16
Of the total sample of broking houses providing trading services 52 are
based in the West followed by 25 from North 13 from South and 10
from the East Around 50 of the firms offering IPO related services are based
in the West as compared to 27 in North 13 in South and 10 in East In
providing mutual funds services the Western region was dominant amounting
to 49 followed by 27 from North The South and the East are almost at par
with 13 and 11 respectively
Future Plans
68 of the firms from the sample have envisaged strategies for future
growth With the middle class Indian investor as well as foreign investor
willing to invest in the stock market majority of the firms preferred expansion
of institutional and the Foreign Institutional Investor clients in their areas of
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17
growth Around 84 have shown interest in expanding their institutional
client base Nearly 51 of such firms are located in the West 25 in North
15 are from South and 9 from East Since the past couple of years India
along with Korea and Taiwan has been one of the preferred destinations for
the FIIs With corporate restructuring rising market capitalization and sectoral
friendly policies helping the FIIs more than two thirds of the firms are
interested in increasing their FII client base Amongst these firms west again
has maximum representation of 53 followed by North with 22 South has
15 firms and East makes up for 9
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19
INTRODUCTION TO INDIAINFOLINE
IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an
independent business research and information provider We gradually evolved into a one-
stop financial services solutions provider Our strong management team comprises competent
and dedicated professionals
We are a pan-India financial services organization across 1361 business locations and a
presence in 428 cities Our global footprint extends across geographies with offices in New
York Singapore and Dubai We are listed on the Bombay Stock Exchange (BSE) and the
National Stock Exchange (NSE)
We offer a wide range of services and products comprising broking (retail and institutional
equities and commodities) wealth management credit and finance insurance asset
management and investment banking
We are registered with the BSE and the NSE for securities trading MCX NCDEX and
DGCX for commodities trading CDSL and NSDL as depository participants We are
registered as a Category I merchant banker and are a SEBI registered portfolio manager We
also received the FII license in IIFL Inc IIFL Securities Pte Ltd received approval from the
Monetary Authority of Singapore to carry out corporate advisory and dealing in securities
operations Two subsidiaries ndash India Infoline Investment Services and Moneyline Credit
Limited ndash are registered with RBI as non-deposit taking non-banking financial services
companies India infoline Housing Finance Ltd the housing finance arm is registered with
the National Housing Bank
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20
HISTROY OF INDIAINFOLINE
The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity
Research and Services Private Limited at Mumbai under the Companies Act 1956 with
Registration No 11 93797 The IndiaInfoline Group commenced its operations as an
independent provider of information analysis and research covering Indian businesses
financial markets and economy to institutional customers We became a public limited
company on April 28 2000 and the name of the Company was changed to Probity Research
and Services Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a
mass retail segment and transformed our business model from providing information services
to institutional customers to retail customers Hence we launched our Internet portal
wwwindiainfolinecom in May 1999 and started providing news and market information
independent research interviews with business leaders and other specialized features
In May 2000 the name of our Company was changed to India Infolinecom Limited
to reflect the transformation of our business Over a period of time we have emerged as one
of the leading business and financial information services provider in India
In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of
financial information and analysis by diversifying into transactional services primarily for
online trading in shares and securities and online as well as offline distribution of personal
financial products like mutual funds and RBI Bonds These activities were carried on by our
wholly owned subsidiaries
The India Infoline Grouprsquos broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July 2000 It
combined competitive brokerage rates and research supported by Internet technology
Besides investment advice from an experienced team of research analysts we also offer real
time stock quotes market news and price charts with multiple tools for technical analysis
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21
Acquisition of Agri Marketing Services Limited (Agri)
In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri
Marketing Services Limited from their owners in exchange for the issuance of 508482 of
our equity shares Agri was a direct selling agent of personal financial products including
mutual funds fixed deposits corporate bonds and post-office instruments At the time of our
acquisition Agri operated 32 branches in South and West India serving more than 30000
customers with a staff of approximately 180 employees After the acquisition we changed
the company name to India Infolinecom Distribution Company Limited
The India Infoline group comprising the holding company India Infoline Ltd (NSE
INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian
financial services space India Infoline offers the entire gamut of financial services covering
investment products ranging from Equities and derivatives Commodities Portfolio
Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment
Banking GoI bonds and other small savings instruments It owns and manages the website
wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal
finance stock markets economy and business
A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none
other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo
IndiaInfolinersquos research is available not just over the internet but also on international wire
services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is
amongst the most read Indian brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22
A network of 753 business locations spread over 346 cities across India facilitates the
smooth acquisition and servicing of a large customer base All these offices are connected
with the corporate office in Mumbai with cutting edge networking technology
The group caters to a customer base of over 500000 over a variety of mediums viz online
over the phone and at our branches The Group is strengthening its institutional broking and
investment banking services and has built a team of experienced research analysts sales and
trading professionals
IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will
give a more meaningful picture of the Company to the investors Reference to the company
or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise
specified
VISION
Our vision is to be the most respected company in the financial services space
MISSION
ldquoTo become a full-fledged financial services company known for its quality of advice
personalized services and cutting edge technologyrdquo
COMPANY PHILISOPHY
The IndiaInfoline Group is committed to placing the Investor First by continuously striving
to increase the efficiency of the operations as well as the systems and processes for use of
corporate resources in such a way so as to maximize the value to the stakeholders The Group
aims at achieving not only the highest possible standards of legal and regulatory compliances
but also of effective management
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23
COMMITTEE
Audit Committee
Terms of reference amp Composition Name of members and Chairman The Audit committee
comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv
Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and
Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as
under - To investigate into any matter that may be prescribed under the provisions of Section
292A of The Companies Act 1956 - Recommendation and removal of External Auditor and
fixation of the Audit Fees - Reviewing with the management the financial statements before
submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and
disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function
Compensation Remuneration Committee
Terms of reference amp Composition Name of members and Chairman The Compensation
Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr
Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of
reference of this committee are as under - To fix suitable remuneration package of all the
Executive Directors and Non Executive Directors Senior Employees and officers ie Salary
perquisites bonuses stock options pensions etc - Determination of the fixed component and
performance linked incentives alongwith the performance criteria to all employees of the
company - Service Contracts Notice Period Severance Fees of Directors and employees -
Stock Option details whether to be issued at discount as well as the period over which to be
accrued and over which exercisable - To conduct discussions with the HR department and
form suitable remuneration policies
Share Transfer and Investor Grievance Committee
Details of the Members Compliance Officer No of Complaints received and pending and
pending transfers as on close of the financial year The committee functions under the
Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24
Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R
Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance
Officer of the Company
COMPANY STRUCTURE
IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock
Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory
Services and Portfolio Management Services It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with
NSDL as well as CDSL as a depository participant providing a one-stop solution for clients
trading in the equities market It has recently launched its Investment banking and
Institutional Broking business
A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients
These services are offered to clients as different schemes which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 7
INDUSTRY PROFILE
The Indian broking industry is one of the oldest trading industries that have
been around even before the establishment of the BSE in 1875 Despite
passing through number of changes in the post liberalization period the
industry has found its way onwards sustainable growth With the purpose of
gaining a deeper understanding about the role of the Indian stock broking
industry in the countryrsquos economy we present in this section some of the
industry insights gleaned from analysis of data received through primary
research
For the broking industry we started with an initial database of over
1800 broking firms that were contacted from which 464 responses were
received The list was further short listed based on the number of terminals
and the top 210 were selected for profiling 394 responses that provided
more than 85 of the information sought have been included for this analysis
presented here as insights All the data for the study was collected through
responses received directly from the broking firms The insights have been
arrived at through an analysis on various parameters pertinent to the equity
broking industry such as region terminal market branches sub brokers
products and growth areas
Some key characteristics of the sample 394 firms are
On the basis of geographical concentration the West region has the
maximum representation of 52 Around 24 firms are located in the
North 13 in the South and 10 in the East
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 8
3 firms started broking operations before 1950 65 between 1950-
1995 and 32 post 1995
On the basis of terminals 40 are located at Mumbai 12 in Delhi 8
in Ahmedabad 7 in Kolkata 4 in Chennai and 29 are from other
cities
From this study we find that almost 36 firms trade in cash and
derivatives and 27 are into cash markets alone Around 20 trade in
cash derivatives and commodities
In the cash market around 34 firms trade at NSE 14 at BSE and 52
trade at both exchanges In the derivative segment 48 trade at NSE
7 at BSE and 45 at both whereas in the debt market 31 trade at
NSE 26 at BSE and 43 at both exchanges
Majority of branches are located in the North ie around 40 West has
31 24 are located in South and 5 in East
In terms of sub-brokers around 55 are located in the South 29 in
West 11 in North and 4 in East
Trading IPOs and Mutual Funds are the top three products offered with
90 firms offering trading 67 IPOs and 53 firms offering mutual fund
transactions
In terms of various areas of growth 84 firms have expressed interest in
expanding their institutional clients 66 firms intend to increase FII
clients and 43 are interested in setting up JV in India and abroad
In terms of IT penetration 62 firms have provided their website and
around 94 firms have email facility
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 9
A BRIEF HISTORY
India Infoline was originally incorporated on October 18 1995 as
Probity Research and Services Private Limited at Mumbai under the Companies
Act 1956 with Registration No 11 93797 India Infoline commenced
operations as an independent provider of information analysis and research
covering Indian businesses financial markets and economy to institutional
customers India Infoline became a public limited company on April 28 2000
and the name of the Company was changed to Probity Research and Services
Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 India Infolinecom identified the potential of the Internet to
cater to a mass retail segment and transformed our business model from
providing information services to institutional customers to retail customers
Hence India Infoline launched Internet portal wwwindiainfolinecom in May
1999 and started providing news and market information independent
research interviews with business leaders and other specialized features
In May 2000 the name of India Infoline was changed to India
Infolinecom Limited to reflect the transformation of our business Over a
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 10
period of time India Infolinecom has emerged as one of the leading business
and financial information services provider in India
In the year 2000 India Infoline leveraged its position as a provider of
financial information and analysis by diversifying into transactional services
primarily for online trading in shares and securities and online as well as offline
distribution of personal financial products like mutual funds and RBI Bonds
These activities were carried on by our wholly owned subsidiaries
India Infoline broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July
2000 It combined competitive brokerage rates and research supported by
Internet technology besides investment advice from an experienced team of
research analysts India Infoline also offer real time stock quotes market news
and price charts with multiple tools for technical analysis
Facilities
India Infolinersquos main offices are located in approximately 4000 square
feet of office space located in Mumbai India India Infoline Branches
collectively occupy an additional 10000 square feet of office space located
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 11
throughout India As on March 31 2005 India Infoline has 73 branches across
36 locations in India
Terminals
Almost 52 of the terminals in the sample are based in the Western
region of India followed by 25 in the North 13 in the South and 10 in the
East Mumbai has got the maximum representation from the West Chennai
from the South New Delhi from the North and Kolkata from the East
Branches amp Sub-Brokers
The maximum concentration of branches is in the North with as many
as 40 of all branches located there followed by the Western region with
31 branches Around 24 branches are located in the South and East
constitutes for 5 of the total branches of the total sample
In case of sub-brokers almost 55 of them are based in the South West
and North follow with 30 and 11 sub-brokers respectively whereas East
has around 4 of total sub-brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 12
Financial Markets
The financial markets have been classified as cash market derivatives
market debt market and commodities market Cash market also known as
spot market is the most sought after amongst investors Majority of the
sample broking firms are dealing in the cash market followed by derivative
and commodities 27 firms are dealing only in the cash market whereas 35
are into cash and derivatives Almost 20 firms trade in cash derivatives and
commodities market Firms that are into cash derivatives and debt are 7 On
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13
the other hand firms into cash and commodities are 3 cash amp debt market
and commodities alone are 2 4 firms trade in all the markets
In the cash market around 34 firms trade at NSE 14 at BSE and 52
trade at both exchanges In the equity derivative market 48 of the sampled
broking houses are members of NSE and 7 trade at BSE while 45 of the
sample operate in both stock exchanges Around 43 of the broking houses
operating in the debt market trade at both exchanges with 31 and 26
firms uniquely at NSE and BSE respectively
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14
Products
The survey also revealed that in the past couple of years apart from
trading the firms have started offering various investment related value
added services The sustained growth of the economy in the past couple of
years has resulted in broking firms offering many diversified services related
to IPOs mutual funds company research etc However the core trading
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15
activity is still the predominant form of business forming 90 of the firms in
the sample 67 firms are engaged in offering IPO related services The
broking industry seems to have capitalized on the growth of the mutual fund
industry which was pegged at 40 in 2006 More than 50 of the sample
broking houses deal in mutual fund investment services The average growth
in assets under management in the last two years is almost 48 Company
research is another lucrative area where the broking firms offer their services
more than 33 of the firms are engaged in providing company research
services Additionally a host of other value added services such as
fundamental and technical analysis investment banking arbitrage etc are
offered by the firms at different levels
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16
Of the total sample of broking houses providing trading services 52 are
based in the West followed by 25 from North 13 from South and 10
from the East Around 50 of the firms offering IPO related services are based
in the West as compared to 27 in North 13 in South and 10 in East In
providing mutual funds services the Western region was dominant amounting
to 49 followed by 27 from North The South and the East are almost at par
with 13 and 11 respectively
Future Plans
68 of the firms from the sample have envisaged strategies for future
growth With the middle class Indian investor as well as foreign investor
willing to invest in the stock market majority of the firms preferred expansion
of institutional and the Foreign Institutional Investor clients in their areas of
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17
growth Around 84 have shown interest in expanding their institutional
client base Nearly 51 of such firms are located in the West 25 in North
15 are from South and 9 from East Since the past couple of years India
along with Korea and Taiwan has been one of the preferred destinations for
the FIIs With corporate restructuring rising market capitalization and sectoral
friendly policies helping the FIIs more than two thirds of the firms are
interested in increasing their FII client base Amongst these firms west again
has maximum representation of 53 followed by North with 22 South has
15 firms and East makes up for 9
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19
INTRODUCTION TO INDIAINFOLINE
IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an
independent business research and information provider We gradually evolved into a one-
stop financial services solutions provider Our strong management team comprises competent
and dedicated professionals
We are a pan-India financial services organization across 1361 business locations and a
presence in 428 cities Our global footprint extends across geographies with offices in New
York Singapore and Dubai We are listed on the Bombay Stock Exchange (BSE) and the
National Stock Exchange (NSE)
We offer a wide range of services and products comprising broking (retail and institutional
equities and commodities) wealth management credit and finance insurance asset
management and investment banking
We are registered with the BSE and the NSE for securities trading MCX NCDEX and
DGCX for commodities trading CDSL and NSDL as depository participants We are
registered as a Category I merchant banker and are a SEBI registered portfolio manager We
also received the FII license in IIFL Inc IIFL Securities Pte Ltd received approval from the
Monetary Authority of Singapore to carry out corporate advisory and dealing in securities
operations Two subsidiaries ndash India Infoline Investment Services and Moneyline Credit
Limited ndash are registered with RBI as non-deposit taking non-banking financial services
companies India infoline Housing Finance Ltd the housing finance arm is registered with
the National Housing Bank
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20
HISTROY OF INDIAINFOLINE
The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity
Research and Services Private Limited at Mumbai under the Companies Act 1956 with
Registration No 11 93797 The IndiaInfoline Group commenced its operations as an
independent provider of information analysis and research covering Indian businesses
financial markets and economy to institutional customers We became a public limited
company on April 28 2000 and the name of the Company was changed to Probity Research
and Services Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a
mass retail segment and transformed our business model from providing information services
to institutional customers to retail customers Hence we launched our Internet portal
wwwindiainfolinecom in May 1999 and started providing news and market information
independent research interviews with business leaders and other specialized features
In May 2000 the name of our Company was changed to India Infolinecom Limited
to reflect the transformation of our business Over a period of time we have emerged as one
of the leading business and financial information services provider in India
In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of
financial information and analysis by diversifying into transactional services primarily for
online trading in shares and securities and online as well as offline distribution of personal
financial products like mutual funds and RBI Bonds These activities were carried on by our
wholly owned subsidiaries
The India Infoline Grouprsquos broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July 2000 It
combined competitive brokerage rates and research supported by Internet technology
Besides investment advice from an experienced team of research analysts we also offer real
time stock quotes market news and price charts with multiple tools for technical analysis
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21
Acquisition of Agri Marketing Services Limited (Agri)
In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri
Marketing Services Limited from their owners in exchange for the issuance of 508482 of
our equity shares Agri was a direct selling agent of personal financial products including
mutual funds fixed deposits corporate bonds and post-office instruments At the time of our
acquisition Agri operated 32 branches in South and West India serving more than 30000
customers with a staff of approximately 180 employees After the acquisition we changed
the company name to India Infolinecom Distribution Company Limited
The India Infoline group comprising the holding company India Infoline Ltd (NSE
INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian
financial services space India Infoline offers the entire gamut of financial services covering
investment products ranging from Equities and derivatives Commodities Portfolio
Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment
Banking GoI bonds and other small savings instruments It owns and manages the website
wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal
finance stock markets economy and business
A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none
other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo
IndiaInfolinersquos research is available not just over the internet but also on international wire
services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is
amongst the most read Indian brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22
A network of 753 business locations spread over 346 cities across India facilitates the
smooth acquisition and servicing of a large customer base All these offices are connected
with the corporate office in Mumbai with cutting edge networking technology
The group caters to a customer base of over 500000 over a variety of mediums viz online
over the phone and at our branches The Group is strengthening its institutional broking and
investment banking services and has built a team of experienced research analysts sales and
trading professionals
IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will
give a more meaningful picture of the Company to the investors Reference to the company
or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise
specified
VISION
Our vision is to be the most respected company in the financial services space
MISSION
ldquoTo become a full-fledged financial services company known for its quality of advice
personalized services and cutting edge technologyrdquo
COMPANY PHILISOPHY
The IndiaInfoline Group is committed to placing the Investor First by continuously striving
to increase the efficiency of the operations as well as the systems and processes for use of
corporate resources in such a way so as to maximize the value to the stakeholders The Group
aims at achieving not only the highest possible standards of legal and regulatory compliances
but also of effective management
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23
COMMITTEE
Audit Committee
Terms of reference amp Composition Name of members and Chairman The Audit committee
comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv
Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and
Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as
under - To investigate into any matter that may be prescribed under the provisions of Section
292A of The Companies Act 1956 - Recommendation and removal of External Auditor and
fixation of the Audit Fees - Reviewing with the management the financial statements before
submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and
disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function
Compensation Remuneration Committee
Terms of reference amp Composition Name of members and Chairman The Compensation
Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr
Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of
reference of this committee are as under - To fix suitable remuneration package of all the
Executive Directors and Non Executive Directors Senior Employees and officers ie Salary
perquisites bonuses stock options pensions etc - Determination of the fixed component and
performance linked incentives alongwith the performance criteria to all employees of the
company - Service Contracts Notice Period Severance Fees of Directors and employees -
Stock Option details whether to be issued at discount as well as the period over which to be
accrued and over which exercisable - To conduct discussions with the HR department and
form suitable remuneration policies
Share Transfer and Investor Grievance Committee
Details of the Members Compliance Officer No of Complaints received and pending and
pending transfers as on close of the financial year The committee functions under the
Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24
Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R
Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance
Officer of the Company
COMPANY STRUCTURE
IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock
Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory
Services and Portfolio Management Services It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with
NSDL as well as CDSL as a depository participant providing a one-stop solution for clients
trading in the equities market It has recently launched its Investment banking and
Institutional Broking business
A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients
These services are offered to clients as different schemes which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 8
3 firms started broking operations before 1950 65 between 1950-
1995 and 32 post 1995
On the basis of terminals 40 are located at Mumbai 12 in Delhi 8
in Ahmedabad 7 in Kolkata 4 in Chennai and 29 are from other
cities
From this study we find that almost 36 firms trade in cash and
derivatives and 27 are into cash markets alone Around 20 trade in
cash derivatives and commodities
In the cash market around 34 firms trade at NSE 14 at BSE and 52
trade at both exchanges In the derivative segment 48 trade at NSE
7 at BSE and 45 at both whereas in the debt market 31 trade at
NSE 26 at BSE and 43 at both exchanges
Majority of branches are located in the North ie around 40 West has
31 24 are located in South and 5 in East
In terms of sub-brokers around 55 are located in the South 29 in
West 11 in North and 4 in East
Trading IPOs and Mutual Funds are the top three products offered with
90 firms offering trading 67 IPOs and 53 firms offering mutual fund
transactions
In terms of various areas of growth 84 firms have expressed interest in
expanding their institutional clients 66 firms intend to increase FII
clients and 43 are interested in setting up JV in India and abroad
In terms of IT penetration 62 firms have provided their website and
around 94 firms have email facility
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 9
A BRIEF HISTORY
India Infoline was originally incorporated on October 18 1995 as
Probity Research and Services Private Limited at Mumbai under the Companies
Act 1956 with Registration No 11 93797 India Infoline commenced
operations as an independent provider of information analysis and research
covering Indian businesses financial markets and economy to institutional
customers India Infoline became a public limited company on April 28 2000
and the name of the Company was changed to Probity Research and Services
Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 India Infolinecom identified the potential of the Internet to
cater to a mass retail segment and transformed our business model from
providing information services to institutional customers to retail customers
Hence India Infoline launched Internet portal wwwindiainfolinecom in May
1999 and started providing news and market information independent
research interviews with business leaders and other specialized features
In May 2000 the name of India Infoline was changed to India
Infolinecom Limited to reflect the transformation of our business Over a
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 10
period of time India Infolinecom has emerged as one of the leading business
and financial information services provider in India
In the year 2000 India Infoline leveraged its position as a provider of
financial information and analysis by diversifying into transactional services
primarily for online trading in shares and securities and online as well as offline
distribution of personal financial products like mutual funds and RBI Bonds
These activities were carried on by our wholly owned subsidiaries
India Infoline broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July
2000 It combined competitive brokerage rates and research supported by
Internet technology besides investment advice from an experienced team of
research analysts India Infoline also offer real time stock quotes market news
and price charts with multiple tools for technical analysis
Facilities
India Infolinersquos main offices are located in approximately 4000 square
feet of office space located in Mumbai India India Infoline Branches
collectively occupy an additional 10000 square feet of office space located
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 11
throughout India As on March 31 2005 India Infoline has 73 branches across
36 locations in India
Terminals
Almost 52 of the terminals in the sample are based in the Western
region of India followed by 25 in the North 13 in the South and 10 in the
East Mumbai has got the maximum representation from the West Chennai
from the South New Delhi from the North and Kolkata from the East
Branches amp Sub-Brokers
The maximum concentration of branches is in the North with as many
as 40 of all branches located there followed by the Western region with
31 branches Around 24 branches are located in the South and East
constitutes for 5 of the total branches of the total sample
In case of sub-brokers almost 55 of them are based in the South West
and North follow with 30 and 11 sub-brokers respectively whereas East
has around 4 of total sub-brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 12
Financial Markets
The financial markets have been classified as cash market derivatives
market debt market and commodities market Cash market also known as
spot market is the most sought after amongst investors Majority of the
sample broking firms are dealing in the cash market followed by derivative
and commodities 27 firms are dealing only in the cash market whereas 35
are into cash and derivatives Almost 20 firms trade in cash derivatives and
commodities market Firms that are into cash derivatives and debt are 7 On
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13
the other hand firms into cash and commodities are 3 cash amp debt market
and commodities alone are 2 4 firms trade in all the markets
In the cash market around 34 firms trade at NSE 14 at BSE and 52
trade at both exchanges In the equity derivative market 48 of the sampled
broking houses are members of NSE and 7 trade at BSE while 45 of the
sample operate in both stock exchanges Around 43 of the broking houses
operating in the debt market trade at both exchanges with 31 and 26
firms uniquely at NSE and BSE respectively
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14
Products
The survey also revealed that in the past couple of years apart from
trading the firms have started offering various investment related value
added services The sustained growth of the economy in the past couple of
years has resulted in broking firms offering many diversified services related
to IPOs mutual funds company research etc However the core trading
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15
activity is still the predominant form of business forming 90 of the firms in
the sample 67 firms are engaged in offering IPO related services The
broking industry seems to have capitalized on the growth of the mutual fund
industry which was pegged at 40 in 2006 More than 50 of the sample
broking houses deal in mutual fund investment services The average growth
in assets under management in the last two years is almost 48 Company
research is another lucrative area where the broking firms offer their services
more than 33 of the firms are engaged in providing company research
services Additionally a host of other value added services such as
fundamental and technical analysis investment banking arbitrage etc are
offered by the firms at different levels
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16
Of the total sample of broking houses providing trading services 52 are
based in the West followed by 25 from North 13 from South and 10
from the East Around 50 of the firms offering IPO related services are based
in the West as compared to 27 in North 13 in South and 10 in East In
providing mutual funds services the Western region was dominant amounting
to 49 followed by 27 from North The South and the East are almost at par
with 13 and 11 respectively
Future Plans
68 of the firms from the sample have envisaged strategies for future
growth With the middle class Indian investor as well as foreign investor
willing to invest in the stock market majority of the firms preferred expansion
of institutional and the Foreign Institutional Investor clients in their areas of
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17
growth Around 84 have shown interest in expanding their institutional
client base Nearly 51 of such firms are located in the West 25 in North
15 are from South and 9 from East Since the past couple of years India
along with Korea and Taiwan has been one of the preferred destinations for
the FIIs With corporate restructuring rising market capitalization and sectoral
friendly policies helping the FIIs more than two thirds of the firms are
interested in increasing their FII client base Amongst these firms west again
has maximum representation of 53 followed by North with 22 South has
15 firms and East makes up for 9
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19
INTRODUCTION TO INDIAINFOLINE
IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an
independent business research and information provider We gradually evolved into a one-
stop financial services solutions provider Our strong management team comprises competent
and dedicated professionals
We are a pan-India financial services organization across 1361 business locations and a
presence in 428 cities Our global footprint extends across geographies with offices in New
York Singapore and Dubai We are listed on the Bombay Stock Exchange (BSE) and the
National Stock Exchange (NSE)
We offer a wide range of services and products comprising broking (retail and institutional
equities and commodities) wealth management credit and finance insurance asset
management and investment banking
We are registered with the BSE and the NSE for securities trading MCX NCDEX and
DGCX for commodities trading CDSL and NSDL as depository participants We are
registered as a Category I merchant banker and are a SEBI registered portfolio manager We
also received the FII license in IIFL Inc IIFL Securities Pte Ltd received approval from the
Monetary Authority of Singapore to carry out corporate advisory and dealing in securities
operations Two subsidiaries ndash India Infoline Investment Services and Moneyline Credit
Limited ndash are registered with RBI as non-deposit taking non-banking financial services
companies India infoline Housing Finance Ltd the housing finance arm is registered with
the National Housing Bank
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20
HISTROY OF INDIAINFOLINE
The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity
Research and Services Private Limited at Mumbai under the Companies Act 1956 with
Registration No 11 93797 The IndiaInfoline Group commenced its operations as an
independent provider of information analysis and research covering Indian businesses
financial markets and economy to institutional customers We became a public limited
company on April 28 2000 and the name of the Company was changed to Probity Research
and Services Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a
mass retail segment and transformed our business model from providing information services
to institutional customers to retail customers Hence we launched our Internet portal
wwwindiainfolinecom in May 1999 and started providing news and market information
independent research interviews with business leaders and other specialized features
In May 2000 the name of our Company was changed to India Infolinecom Limited
to reflect the transformation of our business Over a period of time we have emerged as one
of the leading business and financial information services provider in India
In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of
financial information and analysis by diversifying into transactional services primarily for
online trading in shares and securities and online as well as offline distribution of personal
financial products like mutual funds and RBI Bonds These activities were carried on by our
wholly owned subsidiaries
The India Infoline Grouprsquos broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July 2000 It
combined competitive brokerage rates and research supported by Internet technology
Besides investment advice from an experienced team of research analysts we also offer real
time stock quotes market news and price charts with multiple tools for technical analysis
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21
Acquisition of Agri Marketing Services Limited (Agri)
In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri
Marketing Services Limited from their owners in exchange for the issuance of 508482 of
our equity shares Agri was a direct selling agent of personal financial products including
mutual funds fixed deposits corporate bonds and post-office instruments At the time of our
acquisition Agri operated 32 branches in South and West India serving more than 30000
customers with a staff of approximately 180 employees After the acquisition we changed
the company name to India Infolinecom Distribution Company Limited
The India Infoline group comprising the holding company India Infoline Ltd (NSE
INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian
financial services space India Infoline offers the entire gamut of financial services covering
investment products ranging from Equities and derivatives Commodities Portfolio
Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment
Banking GoI bonds and other small savings instruments It owns and manages the website
wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal
finance stock markets economy and business
A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none
other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo
IndiaInfolinersquos research is available not just over the internet but also on international wire
services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is
amongst the most read Indian brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22
A network of 753 business locations spread over 346 cities across India facilitates the
smooth acquisition and servicing of a large customer base All these offices are connected
with the corporate office in Mumbai with cutting edge networking technology
The group caters to a customer base of over 500000 over a variety of mediums viz online
over the phone and at our branches The Group is strengthening its institutional broking and
investment banking services and has built a team of experienced research analysts sales and
trading professionals
IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will
give a more meaningful picture of the Company to the investors Reference to the company
or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise
specified
VISION
Our vision is to be the most respected company in the financial services space
MISSION
ldquoTo become a full-fledged financial services company known for its quality of advice
personalized services and cutting edge technologyrdquo
COMPANY PHILISOPHY
The IndiaInfoline Group is committed to placing the Investor First by continuously striving
to increase the efficiency of the operations as well as the systems and processes for use of
corporate resources in such a way so as to maximize the value to the stakeholders The Group
aims at achieving not only the highest possible standards of legal and regulatory compliances
but also of effective management
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23
COMMITTEE
Audit Committee
Terms of reference amp Composition Name of members and Chairman The Audit committee
comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv
Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and
Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as
under - To investigate into any matter that may be prescribed under the provisions of Section
292A of The Companies Act 1956 - Recommendation and removal of External Auditor and
fixation of the Audit Fees - Reviewing with the management the financial statements before
submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and
disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function
Compensation Remuneration Committee
Terms of reference amp Composition Name of members and Chairman The Compensation
Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr
Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of
reference of this committee are as under - To fix suitable remuneration package of all the
Executive Directors and Non Executive Directors Senior Employees and officers ie Salary
perquisites bonuses stock options pensions etc - Determination of the fixed component and
performance linked incentives alongwith the performance criteria to all employees of the
company - Service Contracts Notice Period Severance Fees of Directors and employees -
Stock Option details whether to be issued at discount as well as the period over which to be
accrued and over which exercisable - To conduct discussions with the HR department and
form suitable remuneration policies
Share Transfer and Investor Grievance Committee
Details of the Members Compliance Officer No of Complaints received and pending and
pending transfers as on close of the financial year The committee functions under the
Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24
Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R
Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance
Officer of the Company
COMPANY STRUCTURE
IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock
Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory
Services and Portfolio Management Services It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with
NSDL as well as CDSL as a depository participant providing a one-stop solution for clients
trading in the equities market It has recently launched its Investment banking and
Institutional Broking business
A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients
These services are offered to clients as different schemes which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 9
A BRIEF HISTORY
India Infoline was originally incorporated on October 18 1995 as
Probity Research and Services Private Limited at Mumbai under the Companies
Act 1956 with Registration No 11 93797 India Infoline commenced
operations as an independent provider of information analysis and research
covering Indian businesses financial markets and economy to institutional
customers India Infoline became a public limited company on April 28 2000
and the name of the Company was changed to Probity Research and Services
Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 India Infolinecom identified the potential of the Internet to
cater to a mass retail segment and transformed our business model from
providing information services to institutional customers to retail customers
Hence India Infoline launched Internet portal wwwindiainfolinecom in May
1999 and started providing news and market information independent
research interviews with business leaders and other specialized features
In May 2000 the name of India Infoline was changed to India
Infolinecom Limited to reflect the transformation of our business Over a
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 10
period of time India Infolinecom has emerged as one of the leading business
and financial information services provider in India
In the year 2000 India Infoline leveraged its position as a provider of
financial information and analysis by diversifying into transactional services
primarily for online trading in shares and securities and online as well as offline
distribution of personal financial products like mutual funds and RBI Bonds
These activities were carried on by our wholly owned subsidiaries
India Infoline broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July
2000 It combined competitive brokerage rates and research supported by
Internet technology besides investment advice from an experienced team of
research analysts India Infoline also offer real time stock quotes market news
and price charts with multiple tools for technical analysis
Facilities
India Infolinersquos main offices are located in approximately 4000 square
feet of office space located in Mumbai India India Infoline Branches
collectively occupy an additional 10000 square feet of office space located
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 11
throughout India As on March 31 2005 India Infoline has 73 branches across
36 locations in India
Terminals
Almost 52 of the terminals in the sample are based in the Western
region of India followed by 25 in the North 13 in the South and 10 in the
East Mumbai has got the maximum representation from the West Chennai
from the South New Delhi from the North and Kolkata from the East
Branches amp Sub-Brokers
The maximum concentration of branches is in the North with as many
as 40 of all branches located there followed by the Western region with
31 branches Around 24 branches are located in the South and East
constitutes for 5 of the total branches of the total sample
In case of sub-brokers almost 55 of them are based in the South West
and North follow with 30 and 11 sub-brokers respectively whereas East
has around 4 of total sub-brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 12
Financial Markets
The financial markets have been classified as cash market derivatives
market debt market and commodities market Cash market also known as
spot market is the most sought after amongst investors Majority of the
sample broking firms are dealing in the cash market followed by derivative
and commodities 27 firms are dealing only in the cash market whereas 35
are into cash and derivatives Almost 20 firms trade in cash derivatives and
commodities market Firms that are into cash derivatives and debt are 7 On
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13
the other hand firms into cash and commodities are 3 cash amp debt market
and commodities alone are 2 4 firms trade in all the markets
In the cash market around 34 firms trade at NSE 14 at BSE and 52
trade at both exchanges In the equity derivative market 48 of the sampled
broking houses are members of NSE and 7 trade at BSE while 45 of the
sample operate in both stock exchanges Around 43 of the broking houses
operating in the debt market trade at both exchanges with 31 and 26
firms uniquely at NSE and BSE respectively
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14
Products
The survey also revealed that in the past couple of years apart from
trading the firms have started offering various investment related value
added services The sustained growth of the economy in the past couple of
years has resulted in broking firms offering many diversified services related
to IPOs mutual funds company research etc However the core trading
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15
activity is still the predominant form of business forming 90 of the firms in
the sample 67 firms are engaged in offering IPO related services The
broking industry seems to have capitalized on the growth of the mutual fund
industry which was pegged at 40 in 2006 More than 50 of the sample
broking houses deal in mutual fund investment services The average growth
in assets under management in the last two years is almost 48 Company
research is another lucrative area where the broking firms offer their services
more than 33 of the firms are engaged in providing company research
services Additionally a host of other value added services such as
fundamental and technical analysis investment banking arbitrage etc are
offered by the firms at different levels
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16
Of the total sample of broking houses providing trading services 52 are
based in the West followed by 25 from North 13 from South and 10
from the East Around 50 of the firms offering IPO related services are based
in the West as compared to 27 in North 13 in South and 10 in East In
providing mutual funds services the Western region was dominant amounting
to 49 followed by 27 from North The South and the East are almost at par
with 13 and 11 respectively
Future Plans
68 of the firms from the sample have envisaged strategies for future
growth With the middle class Indian investor as well as foreign investor
willing to invest in the stock market majority of the firms preferred expansion
of institutional and the Foreign Institutional Investor clients in their areas of
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17
growth Around 84 have shown interest in expanding their institutional
client base Nearly 51 of such firms are located in the West 25 in North
15 are from South and 9 from East Since the past couple of years India
along with Korea and Taiwan has been one of the preferred destinations for
the FIIs With corporate restructuring rising market capitalization and sectoral
friendly policies helping the FIIs more than two thirds of the firms are
interested in increasing their FII client base Amongst these firms west again
has maximum representation of 53 followed by North with 22 South has
15 firms and East makes up for 9
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19
INTRODUCTION TO INDIAINFOLINE
IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an
independent business research and information provider We gradually evolved into a one-
stop financial services solutions provider Our strong management team comprises competent
and dedicated professionals
We are a pan-India financial services organization across 1361 business locations and a
presence in 428 cities Our global footprint extends across geographies with offices in New
York Singapore and Dubai We are listed on the Bombay Stock Exchange (BSE) and the
National Stock Exchange (NSE)
We offer a wide range of services and products comprising broking (retail and institutional
equities and commodities) wealth management credit and finance insurance asset
management and investment banking
We are registered with the BSE and the NSE for securities trading MCX NCDEX and
DGCX for commodities trading CDSL and NSDL as depository participants We are
registered as a Category I merchant banker and are a SEBI registered portfolio manager We
also received the FII license in IIFL Inc IIFL Securities Pte Ltd received approval from the
Monetary Authority of Singapore to carry out corporate advisory and dealing in securities
operations Two subsidiaries ndash India Infoline Investment Services and Moneyline Credit
Limited ndash are registered with RBI as non-deposit taking non-banking financial services
companies India infoline Housing Finance Ltd the housing finance arm is registered with
the National Housing Bank
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20
HISTROY OF INDIAINFOLINE
The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity
Research and Services Private Limited at Mumbai under the Companies Act 1956 with
Registration No 11 93797 The IndiaInfoline Group commenced its operations as an
independent provider of information analysis and research covering Indian businesses
financial markets and economy to institutional customers We became a public limited
company on April 28 2000 and the name of the Company was changed to Probity Research
and Services Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a
mass retail segment and transformed our business model from providing information services
to institutional customers to retail customers Hence we launched our Internet portal
wwwindiainfolinecom in May 1999 and started providing news and market information
independent research interviews with business leaders and other specialized features
In May 2000 the name of our Company was changed to India Infolinecom Limited
to reflect the transformation of our business Over a period of time we have emerged as one
of the leading business and financial information services provider in India
In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of
financial information and analysis by diversifying into transactional services primarily for
online trading in shares and securities and online as well as offline distribution of personal
financial products like mutual funds and RBI Bonds These activities were carried on by our
wholly owned subsidiaries
The India Infoline Grouprsquos broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July 2000 It
combined competitive brokerage rates and research supported by Internet technology
Besides investment advice from an experienced team of research analysts we also offer real
time stock quotes market news and price charts with multiple tools for technical analysis
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21
Acquisition of Agri Marketing Services Limited (Agri)
In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri
Marketing Services Limited from their owners in exchange for the issuance of 508482 of
our equity shares Agri was a direct selling agent of personal financial products including
mutual funds fixed deposits corporate bonds and post-office instruments At the time of our
acquisition Agri operated 32 branches in South and West India serving more than 30000
customers with a staff of approximately 180 employees After the acquisition we changed
the company name to India Infolinecom Distribution Company Limited
The India Infoline group comprising the holding company India Infoline Ltd (NSE
INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian
financial services space India Infoline offers the entire gamut of financial services covering
investment products ranging from Equities and derivatives Commodities Portfolio
Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment
Banking GoI bonds and other small savings instruments It owns and manages the website
wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal
finance stock markets economy and business
A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none
other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo
IndiaInfolinersquos research is available not just over the internet but also on international wire
services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is
amongst the most read Indian brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22
A network of 753 business locations spread over 346 cities across India facilitates the
smooth acquisition and servicing of a large customer base All these offices are connected
with the corporate office in Mumbai with cutting edge networking technology
The group caters to a customer base of over 500000 over a variety of mediums viz online
over the phone and at our branches The Group is strengthening its institutional broking and
investment banking services and has built a team of experienced research analysts sales and
trading professionals
IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will
give a more meaningful picture of the Company to the investors Reference to the company
or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise
specified
VISION
Our vision is to be the most respected company in the financial services space
MISSION
ldquoTo become a full-fledged financial services company known for its quality of advice
personalized services and cutting edge technologyrdquo
COMPANY PHILISOPHY
The IndiaInfoline Group is committed to placing the Investor First by continuously striving
to increase the efficiency of the operations as well as the systems and processes for use of
corporate resources in such a way so as to maximize the value to the stakeholders The Group
aims at achieving not only the highest possible standards of legal and regulatory compliances
but also of effective management
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23
COMMITTEE
Audit Committee
Terms of reference amp Composition Name of members and Chairman The Audit committee
comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv
Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and
Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as
under - To investigate into any matter that may be prescribed under the provisions of Section
292A of The Companies Act 1956 - Recommendation and removal of External Auditor and
fixation of the Audit Fees - Reviewing with the management the financial statements before
submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and
disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function
Compensation Remuneration Committee
Terms of reference amp Composition Name of members and Chairman The Compensation
Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr
Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of
reference of this committee are as under - To fix suitable remuneration package of all the
Executive Directors and Non Executive Directors Senior Employees and officers ie Salary
perquisites bonuses stock options pensions etc - Determination of the fixed component and
performance linked incentives alongwith the performance criteria to all employees of the
company - Service Contracts Notice Period Severance Fees of Directors and employees -
Stock Option details whether to be issued at discount as well as the period over which to be
accrued and over which exercisable - To conduct discussions with the HR department and
form suitable remuneration policies
Share Transfer and Investor Grievance Committee
Details of the Members Compliance Officer No of Complaints received and pending and
pending transfers as on close of the financial year The committee functions under the
Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24
Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R
Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance
Officer of the Company
COMPANY STRUCTURE
IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock
Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory
Services and Portfolio Management Services It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with
NSDL as well as CDSL as a depository participant providing a one-stop solution for clients
trading in the equities market It has recently launched its Investment banking and
Institutional Broking business
A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients
These services are offered to clients as different schemes which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 10
period of time India Infolinecom has emerged as one of the leading business
and financial information services provider in India
In the year 2000 India Infoline leveraged its position as a provider of
financial information and analysis by diversifying into transactional services
primarily for online trading in shares and securities and online as well as offline
distribution of personal financial products like mutual funds and RBI Bonds
These activities were carried on by our wholly owned subsidiaries
India Infoline broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July
2000 It combined competitive brokerage rates and research supported by
Internet technology besides investment advice from an experienced team of
research analysts India Infoline also offer real time stock quotes market news
and price charts with multiple tools for technical analysis
Facilities
India Infolinersquos main offices are located in approximately 4000 square
feet of office space located in Mumbai India India Infoline Branches
collectively occupy an additional 10000 square feet of office space located
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 11
throughout India As on March 31 2005 India Infoline has 73 branches across
36 locations in India
Terminals
Almost 52 of the terminals in the sample are based in the Western
region of India followed by 25 in the North 13 in the South and 10 in the
East Mumbai has got the maximum representation from the West Chennai
from the South New Delhi from the North and Kolkata from the East
Branches amp Sub-Brokers
The maximum concentration of branches is in the North with as many
as 40 of all branches located there followed by the Western region with
31 branches Around 24 branches are located in the South and East
constitutes for 5 of the total branches of the total sample
In case of sub-brokers almost 55 of them are based in the South West
and North follow with 30 and 11 sub-brokers respectively whereas East
has around 4 of total sub-brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 12
Financial Markets
The financial markets have been classified as cash market derivatives
market debt market and commodities market Cash market also known as
spot market is the most sought after amongst investors Majority of the
sample broking firms are dealing in the cash market followed by derivative
and commodities 27 firms are dealing only in the cash market whereas 35
are into cash and derivatives Almost 20 firms trade in cash derivatives and
commodities market Firms that are into cash derivatives and debt are 7 On
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13
the other hand firms into cash and commodities are 3 cash amp debt market
and commodities alone are 2 4 firms trade in all the markets
In the cash market around 34 firms trade at NSE 14 at BSE and 52
trade at both exchanges In the equity derivative market 48 of the sampled
broking houses are members of NSE and 7 trade at BSE while 45 of the
sample operate in both stock exchanges Around 43 of the broking houses
operating in the debt market trade at both exchanges with 31 and 26
firms uniquely at NSE and BSE respectively
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14
Products
The survey also revealed that in the past couple of years apart from
trading the firms have started offering various investment related value
added services The sustained growth of the economy in the past couple of
years has resulted in broking firms offering many diversified services related
to IPOs mutual funds company research etc However the core trading
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15
activity is still the predominant form of business forming 90 of the firms in
the sample 67 firms are engaged in offering IPO related services The
broking industry seems to have capitalized on the growth of the mutual fund
industry which was pegged at 40 in 2006 More than 50 of the sample
broking houses deal in mutual fund investment services The average growth
in assets under management in the last two years is almost 48 Company
research is another lucrative area where the broking firms offer their services
more than 33 of the firms are engaged in providing company research
services Additionally a host of other value added services such as
fundamental and technical analysis investment banking arbitrage etc are
offered by the firms at different levels
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16
Of the total sample of broking houses providing trading services 52 are
based in the West followed by 25 from North 13 from South and 10
from the East Around 50 of the firms offering IPO related services are based
in the West as compared to 27 in North 13 in South and 10 in East In
providing mutual funds services the Western region was dominant amounting
to 49 followed by 27 from North The South and the East are almost at par
with 13 and 11 respectively
Future Plans
68 of the firms from the sample have envisaged strategies for future
growth With the middle class Indian investor as well as foreign investor
willing to invest in the stock market majority of the firms preferred expansion
of institutional and the Foreign Institutional Investor clients in their areas of
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17
growth Around 84 have shown interest in expanding their institutional
client base Nearly 51 of such firms are located in the West 25 in North
15 are from South and 9 from East Since the past couple of years India
along with Korea and Taiwan has been one of the preferred destinations for
the FIIs With corporate restructuring rising market capitalization and sectoral
friendly policies helping the FIIs more than two thirds of the firms are
interested in increasing their FII client base Amongst these firms west again
has maximum representation of 53 followed by North with 22 South has
15 firms and East makes up for 9
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19
INTRODUCTION TO INDIAINFOLINE
IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an
independent business research and information provider We gradually evolved into a one-
stop financial services solutions provider Our strong management team comprises competent
and dedicated professionals
We are a pan-India financial services organization across 1361 business locations and a
presence in 428 cities Our global footprint extends across geographies with offices in New
York Singapore and Dubai We are listed on the Bombay Stock Exchange (BSE) and the
National Stock Exchange (NSE)
We offer a wide range of services and products comprising broking (retail and institutional
equities and commodities) wealth management credit and finance insurance asset
management and investment banking
We are registered with the BSE and the NSE for securities trading MCX NCDEX and
DGCX for commodities trading CDSL and NSDL as depository participants We are
registered as a Category I merchant banker and are a SEBI registered portfolio manager We
also received the FII license in IIFL Inc IIFL Securities Pte Ltd received approval from the
Monetary Authority of Singapore to carry out corporate advisory and dealing in securities
operations Two subsidiaries ndash India Infoline Investment Services and Moneyline Credit
Limited ndash are registered with RBI as non-deposit taking non-banking financial services
companies India infoline Housing Finance Ltd the housing finance arm is registered with
the National Housing Bank
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20
HISTROY OF INDIAINFOLINE
The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity
Research and Services Private Limited at Mumbai under the Companies Act 1956 with
Registration No 11 93797 The IndiaInfoline Group commenced its operations as an
independent provider of information analysis and research covering Indian businesses
financial markets and economy to institutional customers We became a public limited
company on April 28 2000 and the name of the Company was changed to Probity Research
and Services Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a
mass retail segment and transformed our business model from providing information services
to institutional customers to retail customers Hence we launched our Internet portal
wwwindiainfolinecom in May 1999 and started providing news and market information
independent research interviews with business leaders and other specialized features
In May 2000 the name of our Company was changed to India Infolinecom Limited
to reflect the transformation of our business Over a period of time we have emerged as one
of the leading business and financial information services provider in India
In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of
financial information and analysis by diversifying into transactional services primarily for
online trading in shares and securities and online as well as offline distribution of personal
financial products like mutual funds and RBI Bonds These activities were carried on by our
wholly owned subsidiaries
The India Infoline Grouprsquos broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July 2000 It
combined competitive brokerage rates and research supported by Internet technology
Besides investment advice from an experienced team of research analysts we also offer real
time stock quotes market news and price charts with multiple tools for technical analysis
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21
Acquisition of Agri Marketing Services Limited (Agri)
In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri
Marketing Services Limited from their owners in exchange for the issuance of 508482 of
our equity shares Agri was a direct selling agent of personal financial products including
mutual funds fixed deposits corporate bonds and post-office instruments At the time of our
acquisition Agri operated 32 branches in South and West India serving more than 30000
customers with a staff of approximately 180 employees After the acquisition we changed
the company name to India Infolinecom Distribution Company Limited
The India Infoline group comprising the holding company India Infoline Ltd (NSE
INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian
financial services space India Infoline offers the entire gamut of financial services covering
investment products ranging from Equities and derivatives Commodities Portfolio
Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment
Banking GoI bonds and other small savings instruments It owns and manages the website
wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal
finance stock markets economy and business
A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none
other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo
IndiaInfolinersquos research is available not just over the internet but also on international wire
services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is
amongst the most read Indian brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22
A network of 753 business locations spread over 346 cities across India facilitates the
smooth acquisition and servicing of a large customer base All these offices are connected
with the corporate office in Mumbai with cutting edge networking technology
The group caters to a customer base of over 500000 over a variety of mediums viz online
over the phone and at our branches The Group is strengthening its institutional broking and
investment banking services and has built a team of experienced research analysts sales and
trading professionals
IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will
give a more meaningful picture of the Company to the investors Reference to the company
or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise
specified
VISION
Our vision is to be the most respected company in the financial services space
MISSION
ldquoTo become a full-fledged financial services company known for its quality of advice
personalized services and cutting edge technologyrdquo
COMPANY PHILISOPHY
The IndiaInfoline Group is committed to placing the Investor First by continuously striving
to increase the efficiency of the operations as well as the systems and processes for use of
corporate resources in such a way so as to maximize the value to the stakeholders The Group
aims at achieving not only the highest possible standards of legal and regulatory compliances
but also of effective management
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23
COMMITTEE
Audit Committee
Terms of reference amp Composition Name of members and Chairman The Audit committee
comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv
Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and
Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as
under - To investigate into any matter that may be prescribed under the provisions of Section
292A of The Companies Act 1956 - Recommendation and removal of External Auditor and
fixation of the Audit Fees - Reviewing with the management the financial statements before
submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and
disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function
Compensation Remuneration Committee
Terms of reference amp Composition Name of members and Chairman The Compensation
Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr
Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of
reference of this committee are as under - To fix suitable remuneration package of all the
Executive Directors and Non Executive Directors Senior Employees and officers ie Salary
perquisites bonuses stock options pensions etc - Determination of the fixed component and
performance linked incentives alongwith the performance criteria to all employees of the
company - Service Contracts Notice Period Severance Fees of Directors and employees -
Stock Option details whether to be issued at discount as well as the period over which to be
accrued and over which exercisable - To conduct discussions with the HR department and
form suitable remuneration policies
Share Transfer and Investor Grievance Committee
Details of the Members Compliance Officer No of Complaints received and pending and
pending transfers as on close of the financial year The committee functions under the
Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24
Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R
Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance
Officer of the Company
COMPANY STRUCTURE
IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock
Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory
Services and Portfolio Management Services It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with
NSDL as well as CDSL as a depository participant providing a one-stop solution for clients
trading in the equities market It has recently launched its Investment banking and
Institutional Broking business
A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients
These services are offered to clients as different schemes which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 11
throughout India As on March 31 2005 India Infoline has 73 branches across
36 locations in India
Terminals
Almost 52 of the terminals in the sample are based in the Western
region of India followed by 25 in the North 13 in the South and 10 in the
East Mumbai has got the maximum representation from the West Chennai
from the South New Delhi from the North and Kolkata from the East
Branches amp Sub-Brokers
The maximum concentration of branches is in the North with as many
as 40 of all branches located there followed by the Western region with
31 branches Around 24 branches are located in the South and East
constitutes for 5 of the total branches of the total sample
In case of sub-brokers almost 55 of them are based in the South West
and North follow with 30 and 11 sub-brokers respectively whereas East
has around 4 of total sub-brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 12
Financial Markets
The financial markets have been classified as cash market derivatives
market debt market and commodities market Cash market also known as
spot market is the most sought after amongst investors Majority of the
sample broking firms are dealing in the cash market followed by derivative
and commodities 27 firms are dealing only in the cash market whereas 35
are into cash and derivatives Almost 20 firms trade in cash derivatives and
commodities market Firms that are into cash derivatives and debt are 7 On
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13
the other hand firms into cash and commodities are 3 cash amp debt market
and commodities alone are 2 4 firms trade in all the markets
In the cash market around 34 firms trade at NSE 14 at BSE and 52
trade at both exchanges In the equity derivative market 48 of the sampled
broking houses are members of NSE and 7 trade at BSE while 45 of the
sample operate in both stock exchanges Around 43 of the broking houses
operating in the debt market trade at both exchanges with 31 and 26
firms uniquely at NSE and BSE respectively
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14
Products
The survey also revealed that in the past couple of years apart from
trading the firms have started offering various investment related value
added services The sustained growth of the economy in the past couple of
years has resulted in broking firms offering many diversified services related
to IPOs mutual funds company research etc However the core trading
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15
activity is still the predominant form of business forming 90 of the firms in
the sample 67 firms are engaged in offering IPO related services The
broking industry seems to have capitalized on the growth of the mutual fund
industry which was pegged at 40 in 2006 More than 50 of the sample
broking houses deal in mutual fund investment services The average growth
in assets under management in the last two years is almost 48 Company
research is another lucrative area where the broking firms offer their services
more than 33 of the firms are engaged in providing company research
services Additionally a host of other value added services such as
fundamental and technical analysis investment banking arbitrage etc are
offered by the firms at different levels
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16
Of the total sample of broking houses providing trading services 52 are
based in the West followed by 25 from North 13 from South and 10
from the East Around 50 of the firms offering IPO related services are based
in the West as compared to 27 in North 13 in South and 10 in East In
providing mutual funds services the Western region was dominant amounting
to 49 followed by 27 from North The South and the East are almost at par
with 13 and 11 respectively
Future Plans
68 of the firms from the sample have envisaged strategies for future
growth With the middle class Indian investor as well as foreign investor
willing to invest in the stock market majority of the firms preferred expansion
of institutional and the Foreign Institutional Investor clients in their areas of
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17
growth Around 84 have shown interest in expanding their institutional
client base Nearly 51 of such firms are located in the West 25 in North
15 are from South and 9 from East Since the past couple of years India
along with Korea and Taiwan has been one of the preferred destinations for
the FIIs With corporate restructuring rising market capitalization and sectoral
friendly policies helping the FIIs more than two thirds of the firms are
interested in increasing their FII client base Amongst these firms west again
has maximum representation of 53 followed by North with 22 South has
15 firms and East makes up for 9
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19
INTRODUCTION TO INDIAINFOLINE
IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an
independent business research and information provider We gradually evolved into a one-
stop financial services solutions provider Our strong management team comprises competent
and dedicated professionals
We are a pan-India financial services organization across 1361 business locations and a
presence in 428 cities Our global footprint extends across geographies with offices in New
York Singapore and Dubai We are listed on the Bombay Stock Exchange (BSE) and the
National Stock Exchange (NSE)
We offer a wide range of services and products comprising broking (retail and institutional
equities and commodities) wealth management credit and finance insurance asset
management and investment banking
We are registered with the BSE and the NSE for securities trading MCX NCDEX and
DGCX for commodities trading CDSL and NSDL as depository participants We are
registered as a Category I merchant banker and are a SEBI registered portfolio manager We
also received the FII license in IIFL Inc IIFL Securities Pte Ltd received approval from the
Monetary Authority of Singapore to carry out corporate advisory and dealing in securities
operations Two subsidiaries ndash India Infoline Investment Services and Moneyline Credit
Limited ndash are registered with RBI as non-deposit taking non-banking financial services
companies India infoline Housing Finance Ltd the housing finance arm is registered with
the National Housing Bank
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20
HISTROY OF INDIAINFOLINE
The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity
Research and Services Private Limited at Mumbai under the Companies Act 1956 with
Registration No 11 93797 The IndiaInfoline Group commenced its operations as an
independent provider of information analysis and research covering Indian businesses
financial markets and economy to institutional customers We became a public limited
company on April 28 2000 and the name of the Company was changed to Probity Research
and Services Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a
mass retail segment and transformed our business model from providing information services
to institutional customers to retail customers Hence we launched our Internet portal
wwwindiainfolinecom in May 1999 and started providing news and market information
independent research interviews with business leaders and other specialized features
In May 2000 the name of our Company was changed to India Infolinecom Limited
to reflect the transformation of our business Over a period of time we have emerged as one
of the leading business and financial information services provider in India
In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of
financial information and analysis by diversifying into transactional services primarily for
online trading in shares and securities and online as well as offline distribution of personal
financial products like mutual funds and RBI Bonds These activities were carried on by our
wholly owned subsidiaries
The India Infoline Grouprsquos broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July 2000 It
combined competitive brokerage rates and research supported by Internet technology
Besides investment advice from an experienced team of research analysts we also offer real
time stock quotes market news and price charts with multiple tools for technical analysis
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21
Acquisition of Agri Marketing Services Limited (Agri)
In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri
Marketing Services Limited from their owners in exchange for the issuance of 508482 of
our equity shares Agri was a direct selling agent of personal financial products including
mutual funds fixed deposits corporate bonds and post-office instruments At the time of our
acquisition Agri operated 32 branches in South and West India serving more than 30000
customers with a staff of approximately 180 employees After the acquisition we changed
the company name to India Infolinecom Distribution Company Limited
The India Infoline group comprising the holding company India Infoline Ltd (NSE
INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian
financial services space India Infoline offers the entire gamut of financial services covering
investment products ranging from Equities and derivatives Commodities Portfolio
Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment
Banking GoI bonds and other small savings instruments It owns and manages the website
wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal
finance stock markets economy and business
A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none
other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo
IndiaInfolinersquos research is available not just over the internet but also on international wire
services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is
amongst the most read Indian brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22
A network of 753 business locations spread over 346 cities across India facilitates the
smooth acquisition and servicing of a large customer base All these offices are connected
with the corporate office in Mumbai with cutting edge networking technology
The group caters to a customer base of over 500000 over a variety of mediums viz online
over the phone and at our branches The Group is strengthening its institutional broking and
investment banking services and has built a team of experienced research analysts sales and
trading professionals
IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will
give a more meaningful picture of the Company to the investors Reference to the company
or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise
specified
VISION
Our vision is to be the most respected company in the financial services space
MISSION
ldquoTo become a full-fledged financial services company known for its quality of advice
personalized services and cutting edge technologyrdquo
COMPANY PHILISOPHY
The IndiaInfoline Group is committed to placing the Investor First by continuously striving
to increase the efficiency of the operations as well as the systems and processes for use of
corporate resources in such a way so as to maximize the value to the stakeholders The Group
aims at achieving not only the highest possible standards of legal and regulatory compliances
but also of effective management
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23
COMMITTEE
Audit Committee
Terms of reference amp Composition Name of members and Chairman The Audit committee
comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv
Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and
Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as
under - To investigate into any matter that may be prescribed under the provisions of Section
292A of The Companies Act 1956 - Recommendation and removal of External Auditor and
fixation of the Audit Fees - Reviewing with the management the financial statements before
submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and
disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function
Compensation Remuneration Committee
Terms of reference amp Composition Name of members and Chairman The Compensation
Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr
Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of
reference of this committee are as under - To fix suitable remuneration package of all the
Executive Directors and Non Executive Directors Senior Employees and officers ie Salary
perquisites bonuses stock options pensions etc - Determination of the fixed component and
performance linked incentives alongwith the performance criteria to all employees of the
company - Service Contracts Notice Period Severance Fees of Directors and employees -
Stock Option details whether to be issued at discount as well as the period over which to be
accrued and over which exercisable - To conduct discussions with the HR department and
form suitable remuneration policies
Share Transfer and Investor Grievance Committee
Details of the Members Compliance Officer No of Complaints received and pending and
pending transfers as on close of the financial year The committee functions under the
Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24
Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R
Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance
Officer of the Company
COMPANY STRUCTURE
IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock
Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory
Services and Portfolio Management Services It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with
NSDL as well as CDSL as a depository participant providing a one-stop solution for clients
trading in the equities market It has recently launched its Investment banking and
Institutional Broking business
A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients
These services are offered to clients as different schemes which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 12
Financial Markets
The financial markets have been classified as cash market derivatives
market debt market and commodities market Cash market also known as
spot market is the most sought after amongst investors Majority of the
sample broking firms are dealing in the cash market followed by derivative
and commodities 27 firms are dealing only in the cash market whereas 35
are into cash and derivatives Almost 20 firms trade in cash derivatives and
commodities market Firms that are into cash derivatives and debt are 7 On
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13
the other hand firms into cash and commodities are 3 cash amp debt market
and commodities alone are 2 4 firms trade in all the markets
In the cash market around 34 firms trade at NSE 14 at BSE and 52
trade at both exchanges In the equity derivative market 48 of the sampled
broking houses are members of NSE and 7 trade at BSE while 45 of the
sample operate in both stock exchanges Around 43 of the broking houses
operating in the debt market trade at both exchanges with 31 and 26
firms uniquely at NSE and BSE respectively
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14
Products
The survey also revealed that in the past couple of years apart from
trading the firms have started offering various investment related value
added services The sustained growth of the economy in the past couple of
years has resulted in broking firms offering many diversified services related
to IPOs mutual funds company research etc However the core trading
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15
activity is still the predominant form of business forming 90 of the firms in
the sample 67 firms are engaged in offering IPO related services The
broking industry seems to have capitalized on the growth of the mutual fund
industry which was pegged at 40 in 2006 More than 50 of the sample
broking houses deal in mutual fund investment services The average growth
in assets under management in the last two years is almost 48 Company
research is another lucrative area where the broking firms offer their services
more than 33 of the firms are engaged in providing company research
services Additionally a host of other value added services such as
fundamental and technical analysis investment banking arbitrage etc are
offered by the firms at different levels
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16
Of the total sample of broking houses providing trading services 52 are
based in the West followed by 25 from North 13 from South and 10
from the East Around 50 of the firms offering IPO related services are based
in the West as compared to 27 in North 13 in South and 10 in East In
providing mutual funds services the Western region was dominant amounting
to 49 followed by 27 from North The South and the East are almost at par
with 13 and 11 respectively
Future Plans
68 of the firms from the sample have envisaged strategies for future
growth With the middle class Indian investor as well as foreign investor
willing to invest in the stock market majority of the firms preferred expansion
of institutional and the Foreign Institutional Investor clients in their areas of
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17
growth Around 84 have shown interest in expanding their institutional
client base Nearly 51 of such firms are located in the West 25 in North
15 are from South and 9 from East Since the past couple of years India
along with Korea and Taiwan has been one of the preferred destinations for
the FIIs With corporate restructuring rising market capitalization and sectoral
friendly policies helping the FIIs more than two thirds of the firms are
interested in increasing their FII client base Amongst these firms west again
has maximum representation of 53 followed by North with 22 South has
15 firms and East makes up for 9
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19
INTRODUCTION TO INDIAINFOLINE
IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an
independent business research and information provider We gradually evolved into a one-
stop financial services solutions provider Our strong management team comprises competent
and dedicated professionals
We are a pan-India financial services organization across 1361 business locations and a
presence in 428 cities Our global footprint extends across geographies with offices in New
York Singapore and Dubai We are listed on the Bombay Stock Exchange (BSE) and the
National Stock Exchange (NSE)
We offer a wide range of services and products comprising broking (retail and institutional
equities and commodities) wealth management credit and finance insurance asset
management and investment banking
We are registered with the BSE and the NSE for securities trading MCX NCDEX and
DGCX for commodities trading CDSL and NSDL as depository participants We are
registered as a Category I merchant banker and are a SEBI registered portfolio manager We
also received the FII license in IIFL Inc IIFL Securities Pte Ltd received approval from the
Monetary Authority of Singapore to carry out corporate advisory and dealing in securities
operations Two subsidiaries ndash India Infoline Investment Services and Moneyline Credit
Limited ndash are registered with RBI as non-deposit taking non-banking financial services
companies India infoline Housing Finance Ltd the housing finance arm is registered with
the National Housing Bank
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20
HISTROY OF INDIAINFOLINE
The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity
Research and Services Private Limited at Mumbai under the Companies Act 1956 with
Registration No 11 93797 The IndiaInfoline Group commenced its operations as an
independent provider of information analysis and research covering Indian businesses
financial markets and economy to institutional customers We became a public limited
company on April 28 2000 and the name of the Company was changed to Probity Research
and Services Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a
mass retail segment and transformed our business model from providing information services
to institutional customers to retail customers Hence we launched our Internet portal
wwwindiainfolinecom in May 1999 and started providing news and market information
independent research interviews with business leaders and other specialized features
In May 2000 the name of our Company was changed to India Infolinecom Limited
to reflect the transformation of our business Over a period of time we have emerged as one
of the leading business and financial information services provider in India
In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of
financial information and analysis by diversifying into transactional services primarily for
online trading in shares and securities and online as well as offline distribution of personal
financial products like mutual funds and RBI Bonds These activities were carried on by our
wholly owned subsidiaries
The India Infoline Grouprsquos broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July 2000 It
combined competitive brokerage rates and research supported by Internet technology
Besides investment advice from an experienced team of research analysts we also offer real
time stock quotes market news and price charts with multiple tools for technical analysis
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21
Acquisition of Agri Marketing Services Limited (Agri)
In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri
Marketing Services Limited from their owners in exchange for the issuance of 508482 of
our equity shares Agri was a direct selling agent of personal financial products including
mutual funds fixed deposits corporate bonds and post-office instruments At the time of our
acquisition Agri operated 32 branches in South and West India serving more than 30000
customers with a staff of approximately 180 employees After the acquisition we changed
the company name to India Infolinecom Distribution Company Limited
The India Infoline group comprising the holding company India Infoline Ltd (NSE
INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian
financial services space India Infoline offers the entire gamut of financial services covering
investment products ranging from Equities and derivatives Commodities Portfolio
Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment
Banking GoI bonds and other small savings instruments It owns and manages the website
wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal
finance stock markets economy and business
A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none
other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo
IndiaInfolinersquos research is available not just over the internet but also on international wire
services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is
amongst the most read Indian brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22
A network of 753 business locations spread over 346 cities across India facilitates the
smooth acquisition and servicing of a large customer base All these offices are connected
with the corporate office in Mumbai with cutting edge networking technology
The group caters to a customer base of over 500000 over a variety of mediums viz online
over the phone and at our branches The Group is strengthening its institutional broking and
investment banking services and has built a team of experienced research analysts sales and
trading professionals
IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will
give a more meaningful picture of the Company to the investors Reference to the company
or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise
specified
VISION
Our vision is to be the most respected company in the financial services space
MISSION
ldquoTo become a full-fledged financial services company known for its quality of advice
personalized services and cutting edge technologyrdquo
COMPANY PHILISOPHY
The IndiaInfoline Group is committed to placing the Investor First by continuously striving
to increase the efficiency of the operations as well as the systems and processes for use of
corporate resources in such a way so as to maximize the value to the stakeholders The Group
aims at achieving not only the highest possible standards of legal and regulatory compliances
but also of effective management
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23
COMMITTEE
Audit Committee
Terms of reference amp Composition Name of members and Chairman The Audit committee
comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv
Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and
Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as
under - To investigate into any matter that may be prescribed under the provisions of Section
292A of The Companies Act 1956 - Recommendation and removal of External Auditor and
fixation of the Audit Fees - Reviewing with the management the financial statements before
submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and
disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function
Compensation Remuneration Committee
Terms of reference amp Composition Name of members and Chairman The Compensation
Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr
Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of
reference of this committee are as under - To fix suitable remuneration package of all the
Executive Directors and Non Executive Directors Senior Employees and officers ie Salary
perquisites bonuses stock options pensions etc - Determination of the fixed component and
performance linked incentives alongwith the performance criteria to all employees of the
company - Service Contracts Notice Period Severance Fees of Directors and employees -
Stock Option details whether to be issued at discount as well as the period over which to be
accrued and over which exercisable - To conduct discussions with the HR department and
form suitable remuneration policies
Share Transfer and Investor Grievance Committee
Details of the Members Compliance Officer No of Complaints received and pending and
pending transfers as on close of the financial year The committee functions under the
Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24
Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R
Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance
Officer of the Company
COMPANY STRUCTURE
IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock
Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory
Services and Portfolio Management Services It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with
NSDL as well as CDSL as a depository participant providing a one-stop solution for clients
trading in the equities market It has recently launched its Investment banking and
Institutional Broking business
A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients
These services are offered to clients as different schemes which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 13
the other hand firms into cash and commodities are 3 cash amp debt market
and commodities alone are 2 4 firms trade in all the markets
In the cash market around 34 firms trade at NSE 14 at BSE and 52
trade at both exchanges In the equity derivative market 48 of the sampled
broking houses are members of NSE and 7 trade at BSE while 45 of the
sample operate in both stock exchanges Around 43 of the broking houses
operating in the debt market trade at both exchanges with 31 and 26
firms uniquely at NSE and BSE respectively
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14
Products
The survey also revealed that in the past couple of years apart from
trading the firms have started offering various investment related value
added services The sustained growth of the economy in the past couple of
years has resulted in broking firms offering many diversified services related
to IPOs mutual funds company research etc However the core trading
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15
activity is still the predominant form of business forming 90 of the firms in
the sample 67 firms are engaged in offering IPO related services The
broking industry seems to have capitalized on the growth of the mutual fund
industry which was pegged at 40 in 2006 More than 50 of the sample
broking houses deal in mutual fund investment services The average growth
in assets under management in the last two years is almost 48 Company
research is another lucrative area where the broking firms offer their services
more than 33 of the firms are engaged in providing company research
services Additionally a host of other value added services such as
fundamental and technical analysis investment banking arbitrage etc are
offered by the firms at different levels
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16
Of the total sample of broking houses providing trading services 52 are
based in the West followed by 25 from North 13 from South and 10
from the East Around 50 of the firms offering IPO related services are based
in the West as compared to 27 in North 13 in South and 10 in East In
providing mutual funds services the Western region was dominant amounting
to 49 followed by 27 from North The South and the East are almost at par
with 13 and 11 respectively
Future Plans
68 of the firms from the sample have envisaged strategies for future
growth With the middle class Indian investor as well as foreign investor
willing to invest in the stock market majority of the firms preferred expansion
of institutional and the Foreign Institutional Investor clients in their areas of
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17
growth Around 84 have shown interest in expanding their institutional
client base Nearly 51 of such firms are located in the West 25 in North
15 are from South and 9 from East Since the past couple of years India
along with Korea and Taiwan has been one of the preferred destinations for
the FIIs With corporate restructuring rising market capitalization and sectoral
friendly policies helping the FIIs more than two thirds of the firms are
interested in increasing their FII client base Amongst these firms west again
has maximum representation of 53 followed by North with 22 South has
15 firms and East makes up for 9
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19
INTRODUCTION TO INDIAINFOLINE
IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an
independent business research and information provider We gradually evolved into a one-
stop financial services solutions provider Our strong management team comprises competent
and dedicated professionals
We are a pan-India financial services organization across 1361 business locations and a
presence in 428 cities Our global footprint extends across geographies with offices in New
York Singapore and Dubai We are listed on the Bombay Stock Exchange (BSE) and the
National Stock Exchange (NSE)
We offer a wide range of services and products comprising broking (retail and institutional
equities and commodities) wealth management credit and finance insurance asset
management and investment banking
We are registered with the BSE and the NSE for securities trading MCX NCDEX and
DGCX for commodities trading CDSL and NSDL as depository participants We are
registered as a Category I merchant banker and are a SEBI registered portfolio manager We
also received the FII license in IIFL Inc IIFL Securities Pte Ltd received approval from the
Monetary Authority of Singapore to carry out corporate advisory and dealing in securities
operations Two subsidiaries ndash India Infoline Investment Services and Moneyline Credit
Limited ndash are registered with RBI as non-deposit taking non-banking financial services
companies India infoline Housing Finance Ltd the housing finance arm is registered with
the National Housing Bank
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20
HISTROY OF INDIAINFOLINE
The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity
Research and Services Private Limited at Mumbai under the Companies Act 1956 with
Registration No 11 93797 The IndiaInfoline Group commenced its operations as an
independent provider of information analysis and research covering Indian businesses
financial markets and economy to institutional customers We became a public limited
company on April 28 2000 and the name of the Company was changed to Probity Research
and Services Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a
mass retail segment and transformed our business model from providing information services
to institutional customers to retail customers Hence we launched our Internet portal
wwwindiainfolinecom in May 1999 and started providing news and market information
independent research interviews with business leaders and other specialized features
In May 2000 the name of our Company was changed to India Infolinecom Limited
to reflect the transformation of our business Over a period of time we have emerged as one
of the leading business and financial information services provider in India
In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of
financial information and analysis by diversifying into transactional services primarily for
online trading in shares and securities and online as well as offline distribution of personal
financial products like mutual funds and RBI Bonds These activities were carried on by our
wholly owned subsidiaries
The India Infoline Grouprsquos broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July 2000 It
combined competitive brokerage rates and research supported by Internet technology
Besides investment advice from an experienced team of research analysts we also offer real
time stock quotes market news and price charts with multiple tools for technical analysis
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21
Acquisition of Agri Marketing Services Limited (Agri)
In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri
Marketing Services Limited from their owners in exchange for the issuance of 508482 of
our equity shares Agri was a direct selling agent of personal financial products including
mutual funds fixed deposits corporate bonds and post-office instruments At the time of our
acquisition Agri operated 32 branches in South and West India serving more than 30000
customers with a staff of approximately 180 employees After the acquisition we changed
the company name to India Infolinecom Distribution Company Limited
The India Infoline group comprising the holding company India Infoline Ltd (NSE
INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian
financial services space India Infoline offers the entire gamut of financial services covering
investment products ranging from Equities and derivatives Commodities Portfolio
Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment
Banking GoI bonds and other small savings instruments It owns and manages the website
wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal
finance stock markets economy and business
A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none
other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo
IndiaInfolinersquos research is available not just over the internet but also on international wire
services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is
amongst the most read Indian brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22
A network of 753 business locations spread over 346 cities across India facilitates the
smooth acquisition and servicing of a large customer base All these offices are connected
with the corporate office in Mumbai with cutting edge networking technology
The group caters to a customer base of over 500000 over a variety of mediums viz online
over the phone and at our branches The Group is strengthening its institutional broking and
investment banking services and has built a team of experienced research analysts sales and
trading professionals
IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will
give a more meaningful picture of the Company to the investors Reference to the company
or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise
specified
VISION
Our vision is to be the most respected company in the financial services space
MISSION
ldquoTo become a full-fledged financial services company known for its quality of advice
personalized services and cutting edge technologyrdquo
COMPANY PHILISOPHY
The IndiaInfoline Group is committed to placing the Investor First by continuously striving
to increase the efficiency of the operations as well as the systems and processes for use of
corporate resources in such a way so as to maximize the value to the stakeholders The Group
aims at achieving not only the highest possible standards of legal and regulatory compliances
but also of effective management
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23
COMMITTEE
Audit Committee
Terms of reference amp Composition Name of members and Chairman The Audit committee
comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv
Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and
Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as
under - To investigate into any matter that may be prescribed under the provisions of Section
292A of The Companies Act 1956 - Recommendation and removal of External Auditor and
fixation of the Audit Fees - Reviewing with the management the financial statements before
submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and
disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function
Compensation Remuneration Committee
Terms of reference amp Composition Name of members and Chairman The Compensation
Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr
Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of
reference of this committee are as under - To fix suitable remuneration package of all the
Executive Directors and Non Executive Directors Senior Employees and officers ie Salary
perquisites bonuses stock options pensions etc - Determination of the fixed component and
performance linked incentives alongwith the performance criteria to all employees of the
company - Service Contracts Notice Period Severance Fees of Directors and employees -
Stock Option details whether to be issued at discount as well as the period over which to be
accrued and over which exercisable - To conduct discussions with the HR department and
form suitable remuneration policies
Share Transfer and Investor Grievance Committee
Details of the Members Compliance Officer No of Complaints received and pending and
pending transfers as on close of the financial year The committee functions under the
Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24
Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R
Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance
Officer of the Company
COMPANY STRUCTURE
IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock
Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory
Services and Portfolio Management Services It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with
NSDL as well as CDSL as a depository participant providing a one-stop solution for clients
trading in the equities market It has recently launched its Investment banking and
Institutional Broking business
A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients
These services are offered to clients as different schemes which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 14
Products
The survey also revealed that in the past couple of years apart from
trading the firms have started offering various investment related value
added services The sustained growth of the economy in the past couple of
years has resulted in broking firms offering many diversified services related
to IPOs mutual funds company research etc However the core trading
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15
activity is still the predominant form of business forming 90 of the firms in
the sample 67 firms are engaged in offering IPO related services The
broking industry seems to have capitalized on the growth of the mutual fund
industry which was pegged at 40 in 2006 More than 50 of the sample
broking houses deal in mutual fund investment services The average growth
in assets under management in the last two years is almost 48 Company
research is another lucrative area where the broking firms offer their services
more than 33 of the firms are engaged in providing company research
services Additionally a host of other value added services such as
fundamental and technical analysis investment banking arbitrage etc are
offered by the firms at different levels
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16
Of the total sample of broking houses providing trading services 52 are
based in the West followed by 25 from North 13 from South and 10
from the East Around 50 of the firms offering IPO related services are based
in the West as compared to 27 in North 13 in South and 10 in East In
providing mutual funds services the Western region was dominant amounting
to 49 followed by 27 from North The South and the East are almost at par
with 13 and 11 respectively
Future Plans
68 of the firms from the sample have envisaged strategies for future
growth With the middle class Indian investor as well as foreign investor
willing to invest in the stock market majority of the firms preferred expansion
of institutional and the Foreign Institutional Investor clients in their areas of
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17
growth Around 84 have shown interest in expanding their institutional
client base Nearly 51 of such firms are located in the West 25 in North
15 are from South and 9 from East Since the past couple of years India
along with Korea and Taiwan has been one of the preferred destinations for
the FIIs With corporate restructuring rising market capitalization and sectoral
friendly policies helping the FIIs more than two thirds of the firms are
interested in increasing their FII client base Amongst these firms west again
has maximum representation of 53 followed by North with 22 South has
15 firms and East makes up for 9
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19
INTRODUCTION TO INDIAINFOLINE
IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an
independent business research and information provider We gradually evolved into a one-
stop financial services solutions provider Our strong management team comprises competent
and dedicated professionals
We are a pan-India financial services organization across 1361 business locations and a
presence in 428 cities Our global footprint extends across geographies with offices in New
York Singapore and Dubai We are listed on the Bombay Stock Exchange (BSE) and the
National Stock Exchange (NSE)
We offer a wide range of services and products comprising broking (retail and institutional
equities and commodities) wealth management credit and finance insurance asset
management and investment banking
We are registered with the BSE and the NSE for securities trading MCX NCDEX and
DGCX for commodities trading CDSL and NSDL as depository participants We are
registered as a Category I merchant banker and are a SEBI registered portfolio manager We
also received the FII license in IIFL Inc IIFL Securities Pte Ltd received approval from the
Monetary Authority of Singapore to carry out corporate advisory and dealing in securities
operations Two subsidiaries ndash India Infoline Investment Services and Moneyline Credit
Limited ndash are registered with RBI as non-deposit taking non-banking financial services
companies India infoline Housing Finance Ltd the housing finance arm is registered with
the National Housing Bank
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20
HISTROY OF INDIAINFOLINE
The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity
Research and Services Private Limited at Mumbai under the Companies Act 1956 with
Registration No 11 93797 The IndiaInfoline Group commenced its operations as an
independent provider of information analysis and research covering Indian businesses
financial markets and economy to institutional customers We became a public limited
company on April 28 2000 and the name of the Company was changed to Probity Research
and Services Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a
mass retail segment and transformed our business model from providing information services
to institutional customers to retail customers Hence we launched our Internet portal
wwwindiainfolinecom in May 1999 and started providing news and market information
independent research interviews with business leaders and other specialized features
In May 2000 the name of our Company was changed to India Infolinecom Limited
to reflect the transformation of our business Over a period of time we have emerged as one
of the leading business and financial information services provider in India
In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of
financial information and analysis by diversifying into transactional services primarily for
online trading in shares and securities and online as well as offline distribution of personal
financial products like mutual funds and RBI Bonds These activities were carried on by our
wholly owned subsidiaries
The India Infoline Grouprsquos broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July 2000 It
combined competitive brokerage rates and research supported by Internet technology
Besides investment advice from an experienced team of research analysts we also offer real
time stock quotes market news and price charts with multiple tools for technical analysis
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21
Acquisition of Agri Marketing Services Limited (Agri)
In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri
Marketing Services Limited from their owners in exchange for the issuance of 508482 of
our equity shares Agri was a direct selling agent of personal financial products including
mutual funds fixed deposits corporate bonds and post-office instruments At the time of our
acquisition Agri operated 32 branches in South and West India serving more than 30000
customers with a staff of approximately 180 employees After the acquisition we changed
the company name to India Infolinecom Distribution Company Limited
The India Infoline group comprising the holding company India Infoline Ltd (NSE
INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian
financial services space India Infoline offers the entire gamut of financial services covering
investment products ranging from Equities and derivatives Commodities Portfolio
Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment
Banking GoI bonds and other small savings instruments It owns and manages the website
wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal
finance stock markets economy and business
A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none
other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo
IndiaInfolinersquos research is available not just over the internet but also on international wire
services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is
amongst the most read Indian brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22
A network of 753 business locations spread over 346 cities across India facilitates the
smooth acquisition and servicing of a large customer base All these offices are connected
with the corporate office in Mumbai with cutting edge networking technology
The group caters to a customer base of over 500000 over a variety of mediums viz online
over the phone and at our branches The Group is strengthening its institutional broking and
investment banking services and has built a team of experienced research analysts sales and
trading professionals
IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will
give a more meaningful picture of the Company to the investors Reference to the company
or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise
specified
VISION
Our vision is to be the most respected company in the financial services space
MISSION
ldquoTo become a full-fledged financial services company known for its quality of advice
personalized services and cutting edge technologyrdquo
COMPANY PHILISOPHY
The IndiaInfoline Group is committed to placing the Investor First by continuously striving
to increase the efficiency of the operations as well as the systems and processes for use of
corporate resources in such a way so as to maximize the value to the stakeholders The Group
aims at achieving not only the highest possible standards of legal and regulatory compliances
but also of effective management
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23
COMMITTEE
Audit Committee
Terms of reference amp Composition Name of members and Chairman The Audit committee
comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv
Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and
Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as
under - To investigate into any matter that may be prescribed under the provisions of Section
292A of The Companies Act 1956 - Recommendation and removal of External Auditor and
fixation of the Audit Fees - Reviewing with the management the financial statements before
submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and
disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function
Compensation Remuneration Committee
Terms of reference amp Composition Name of members and Chairman The Compensation
Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr
Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of
reference of this committee are as under - To fix suitable remuneration package of all the
Executive Directors and Non Executive Directors Senior Employees and officers ie Salary
perquisites bonuses stock options pensions etc - Determination of the fixed component and
performance linked incentives alongwith the performance criteria to all employees of the
company - Service Contracts Notice Period Severance Fees of Directors and employees -
Stock Option details whether to be issued at discount as well as the period over which to be
accrued and over which exercisable - To conduct discussions with the HR department and
form suitable remuneration policies
Share Transfer and Investor Grievance Committee
Details of the Members Compliance Officer No of Complaints received and pending and
pending transfers as on close of the financial year The committee functions under the
Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24
Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R
Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance
Officer of the Company
COMPANY STRUCTURE
IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock
Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory
Services and Portfolio Management Services It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with
NSDL as well as CDSL as a depository participant providing a one-stop solution for clients
trading in the equities market It has recently launched its Investment banking and
Institutional Broking business
A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients
These services are offered to clients as different schemes which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 15
activity is still the predominant form of business forming 90 of the firms in
the sample 67 firms are engaged in offering IPO related services The
broking industry seems to have capitalized on the growth of the mutual fund
industry which was pegged at 40 in 2006 More than 50 of the sample
broking houses deal in mutual fund investment services The average growth
in assets under management in the last two years is almost 48 Company
research is another lucrative area where the broking firms offer their services
more than 33 of the firms are engaged in providing company research
services Additionally a host of other value added services such as
fundamental and technical analysis investment banking arbitrage etc are
offered by the firms at different levels
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16
Of the total sample of broking houses providing trading services 52 are
based in the West followed by 25 from North 13 from South and 10
from the East Around 50 of the firms offering IPO related services are based
in the West as compared to 27 in North 13 in South and 10 in East In
providing mutual funds services the Western region was dominant amounting
to 49 followed by 27 from North The South and the East are almost at par
with 13 and 11 respectively
Future Plans
68 of the firms from the sample have envisaged strategies for future
growth With the middle class Indian investor as well as foreign investor
willing to invest in the stock market majority of the firms preferred expansion
of institutional and the Foreign Institutional Investor clients in their areas of
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17
growth Around 84 have shown interest in expanding their institutional
client base Nearly 51 of such firms are located in the West 25 in North
15 are from South and 9 from East Since the past couple of years India
along with Korea and Taiwan has been one of the preferred destinations for
the FIIs With corporate restructuring rising market capitalization and sectoral
friendly policies helping the FIIs more than two thirds of the firms are
interested in increasing their FII client base Amongst these firms west again
has maximum representation of 53 followed by North with 22 South has
15 firms and East makes up for 9
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19
INTRODUCTION TO INDIAINFOLINE
IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an
independent business research and information provider We gradually evolved into a one-
stop financial services solutions provider Our strong management team comprises competent
and dedicated professionals
We are a pan-India financial services organization across 1361 business locations and a
presence in 428 cities Our global footprint extends across geographies with offices in New
York Singapore and Dubai We are listed on the Bombay Stock Exchange (BSE) and the
National Stock Exchange (NSE)
We offer a wide range of services and products comprising broking (retail and institutional
equities and commodities) wealth management credit and finance insurance asset
management and investment banking
We are registered with the BSE and the NSE for securities trading MCX NCDEX and
DGCX for commodities trading CDSL and NSDL as depository participants We are
registered as a Category I merchant banker and are a SEBI registered portfolio manager We
also received the FII license in IIFL Inc IIFL Securities Pte Ltd received approval from the
Monetary Authority of Singapore to carry out corporate advisory and dealing in securities
operations Two subsidiaries ndash India Infoline Investment Services and Moneyline Credit
Limited ndash are registered with RBI as non-deposit taking non-banking financial services
companies India infoline Housing Finance Ltd the housing finance arm is registered with
the National Housing Bank
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20
HISTROY OF INDIAINFOLINE
The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity
Research and Services Private Limited at Mumbai under the Companies Act 1956 with
Registration No 11 93797 The IndiaInfoline Group commenced its operations as an
independent provider of information analysis and research covering Indian businesses
financial markets and economy to institutional customers We became a public limited
company on April 28 2000 and the name of the Company was changed to Probity Research
and Services Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a
mass retail segment and transformed our business model from providing information services
to institutional customers to retail customers Hence we launched our Internet portal
wwwindiainfolinecom in May 1999 and started providing news and market information
independent research interviews with business leaders and other specialized features
In May 2000 the name of our Company was changed to India Infolinecom Limited
to reflect the transformation of our business Over a period of time we have emerged as one
of the leading business and financial information services provider in India
In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of
financial information and analysis by diversifying into transactional services primarily for
online trading in shares and securities and online as well as offline distribution of personal
financial products like mutual funds and RBI Bonds These activities were carried on by our
wholly owned subsidiaries
The India Infoline Grouprsquos broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July 2000 It
combined competitive brokerage rates and research supported by Internet technology
Besides investment advice from an experienced team of research analysts we also offer real
time stock quotes market news and price charts with multiple tools for technical analysis
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21
Acquisition of Agri Marketing Services Limited (Agri)
In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri
Marketing Services Limited from their owners in exchange for the issuance of 508482 of
our equity shares Agri was a direct selling agent of personal financial products including
mutual funds fixed deposits corporate bonds and post-office instruments At the time of our
acquisition Agri operated 32 branches in South and West India serving more than 30000
customers with a staff of approximately 180 employees After the acquisition we changed
the company name to India Infolinecom Distribution Company Limited
The India Infoline group comprising the holding company India Infoline Ltd (NSE
INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian
financial services space India Infoline offers the entire gamut of financial services covering
investment products ranging from Equities and derivatives Commodities Portfolio
Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment
Banking GoI bonds and other small savings instruments It owns and manages the website
wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal
finance stock markets economy and business
A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none
other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo
IndiaInfolinersquos research is available not just over the internet but also on international wire
services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is
amongst the most read Indian brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22
A network of 753 business locations spread over 346 cities across India facilitates the
smooth acquisition and servicing of a large customer base All these offices are connected
with the corporate office in Mumbai with cutting edge networking technology
The group caters to a customer base of over 500000 over a variety of mediums viz online
over the phone and at our branches The Group is strengthening its institutional broking and
investment banking services and has built a team of experienced research analysts sales and
trading professionals
IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will
give a more meaningful picture of the Company to the investors Reference to the company
or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise
specified
VISION
Our vision is to be the most respected company in the financial services space
MISSION
ldquoTo become a full-fledged financial services company known for its quality of advice
personalized services and cutting edge technologyrdquo
COMPANY PHILISOPHY
The IndiaInfoline Group is committed to placing the Investor First by continuously striving
to increase the efficiency of the operations as well as the systems and processes for use of
corporate resources in such a way so as to maximize the value to the stakeholders The Group
aims at achieving not only the highest possible standards of legal and regulatory compliances
but also of effective management
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23
COMMITTEE
Audit Committee
Terms of reference amp Composition Name of members and Chairman The Audit committee
comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv
Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and
Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as
under - To investigate into any matter that may be prescribed under the provisions of Section
292A of The Companies Act 1956 - Recommendation and removal of External Auditor and
fixation of the Audit Fees - Reviewing with the management the financial statements before
submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and
disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function
Compensation Remuneration Committee
Terms of reference amp Composition Name of members and Chairman The Compensation
Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr
Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of
reference of this committee are as under - To fix suitable remuneration package of all the
Executive Directors and Non Executive Directors Senior Employees and officers ie Salary
perquisites bonuses stock options pensions etc - Determination of the fixed component and
performance linked incentives alongwith the performance criteria to all employees of the
company - Service Contracts Notice Period Severance Fees of Directors and employees -
Stock Option details whether to be issued at discount as well as the period over which to be
accrued and over which exercisable - To conduct discussions with the HR department and
form suitable remuneration policies
Share Transfer and Investor Grievance Committee
Details of the Members Compliance Officer No of Complaints received and pending and
pending transfers as on close of the financial year The committee functions under the
Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24
Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R
Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance
Officer of the Company
COMPANY STRUCTURE
IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock
Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory
Services and Portfolio Management Services It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with
NSDL as well as CDSL as a depository participant providing a one-stop solution for clients
trading in the equities market It has recently launched its Investment banking and
Institutional Broking business
A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients
These services are offered to clients as different schemes which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 16
Of the total sample of broking houses providing trading services 52 are
based in the West followed by 25 from North 13 from South and 10
from the East Around 50 of the firms offering IPO related services are based
in the West as compared to 27 in North 13 in South and 10 in East In
providing mutual funds services the Western region was dominant amounting
to 49 followed by 27 from North The South and the East are almost at par
with 13 and 11 respectively
Future Plans
68 of the firms from the sample have envisaged strategies for future
growth With the middle class Indian investor as well as foreign investor
willing to invest in the stock market majority of the firms preferred expansion
of institutional and the Foreign Institutional Investor clients in their areas of
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17
growth Around 84 have shown interest in expanding their institutional
client base Nearly 51 of such firms are located in the West 25 in North
15 are from South and 9 from East Since the past couple of years India
along with Korea and Taiwan has been one of the preferred destinations for
the FIIs With corporate restructuring rising market capitalization and sectoral
friendly policies helping the FIIs more than two thirds of the firms are
interested in increasing their FII client base Amongst these firms west again
has maximum representation of 53 followed by North with 22 South has
15 firms and East makes up for 9
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19
INTRODUCTION TO INDIAINFOLINE
IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an
independent business research and information provider We gradually evolved into a one-
stop financial services solutions provider Our strong management team comprises competent
and dedicated professionals
We are a pan-India financial services organization across 1361 business locations and a
presence in 428 cities Our global footprint extends across geographies with offices in New
York Singapore and Dubai We are listed on the Bombay Stock Exchange (BSE) and the
National Stock Exchange (NSE)
We offer a wide range of services and products comprising broking (retail and institutional
equities and commodities) wealth management credit and finance insurance asset
management and investment banking
We are registered with the BSE and the NSE for securities trading MCX NCDEX and
DGCX for commodities trading CDSL and NSDL as depository participants We are
registered as a Category I merchant banker and are a SEBI registered portfolio manager We
also received the FII license in IIFL Inc IIFL Securities Pte Ltd received approval from the
Monetary Authority of Singapore to carry out corporate advisory and dealing in securities
operations Two subsidiaries ndash India Infoline Investment Services and Moneyline Credit
Limited ndash are registered with RBI as non-deposit taking non-banking financial services
companies India infoline Housing Finance Ltd the housing finance arm is registered with
the National Housing Bank
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20
HISTROY OF INDIAINFOLINE
The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity
Research and Services Private Limited at Mumbai under the Companies Act 1956 with
Registration No 11 93797 The IndiaInfoline Group commenced its operations as an
independent provider of information analysis and research covering Indian businesses
financial markets and economy to institutional customers We became a public limited
company on April 28 2000 and the name of the Company was changed to Probity Research
and Services Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a
mass retail segment and transformed our business model from providing information services
to institutional customers to retail customers Hence we launched our Internet portal
wwwindiainfolinecom in May 1999 and started providing news and market information
independent research interviews with business leaders and other specialized features
In May 2000 the name of our Company was changed to India Infolinecom Limited
to reflect the transformation of our business Over a period of time we have emerged as one
of the leading business and financial information services provider in India
In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of
financial information and analysis by diversifying into transactional services primarily for
online trading in shares and securities and online as well as offline distribution of personal
financial products like mutual funds and RBI Bonds These activities were carried on by our
wholly owned subsidiaries
The India Infoline Grouprsquos broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July 2000 It
combined competitive brokerage rates and research supported by Internet technology
Besides investment advice from an experienced team of research analysts we also offer real
time stock quotes market news and price charts with multiple tools for technical analysis
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21
Acquisition of Agri Marketing Services Limited (Agri)
In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri
Marketing Services Limited from their owners in exchange for the issuance of 508482 of
our equity shares Agri was a direct selling agent of personal financial products including
mutual funds fixed deposits corporate bonds and post-office instruments At the time of our
acquisition Agri operated 32 branches in South and West India serving more than 30000
customers with a staff of approximately 180 employees After the acquisition we changed
the company name to India Infolinecom Distribution Company Limited
The India Infoline group comprising the holding company India Infoline Ltd (NSE
INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian
financial services space India Infoline offers the entire gamut of financial services covering
investment products ranging from Equities and derivatives Commodities Portfolio
Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment
Banking GoI bonds and other small savings instruments It owns and manages the website
wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal
finance stock markets economy and business
A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none
other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo
IndiaInfolinersquos research is available not just over the internet but also on international wire
services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is
amongst the most read Indian brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22
A network of 753 business locations spread over 346 cities across India facilitates the
smooth acquisition and servicing of a large customer base All these offices are connected
with the corporate office in Mumbai with cutting edge networking technology
The group caters to a customer base of over 500000 over a variety of mediums viz online
over the phone and at our branches The Group is strengthening its institutional broking and
investment banking services and has built a team of experienced research analysts sales and
trading professionals
IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will
give a more meaningful picture of the Company to the investors Reference to the company
or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise
specified
VISION
Our vision is to be the most respected company in the financial services space
MISSION
ldquoTo become a full-fledged financial services company known for its quality of advice
personalized services and cutting edge technologyrdquo
COMPANY PHILISOPHY
The IndiaInfoline Group is committed to placing the Investor First by continuously striving
to increase the efficiency of the operations as well as the systems and processes for use of
corporate resources in such a way so as to maximize the value to the stakeholders The Group
aims at achieving not only the highest possible standards of legal and regulatory compliances
but also of effective management
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23
COMMITTEE
Audit Committee
Terms of reference amp Composition Name of members and Chairman The Audit committee
comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv
Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and
Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as
under - To investigate into any matter that may be prescribed under the provisions of Section
292A of The Companies Act 1956 - Recommendation and removal of External Auditor and
fixation of the Audit Fees - Reviewing with the management the financial statements before
submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and
disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function
Compensation Remuneration Committee
Terms of reference amp Composition Name of members and Chairman The Compensation
Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr
Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of
reference of this committee are as under - To fix suitable remuneration package of all the
Executive Directors and Non Executive Directors Senior Employees and officers ie Salary
perquisites bonuses stock options pensions etc - Determination of the fixed component and
performance linked incentives alongwith the performance criteria to all employees of the
company - Service Contracts Notice Period Severance Fees of Directors and employees -
Stock Option details whether to be issued at discount as well as the period over which to be
accrued and over which exercisable - To conduct discussions with the HR department and
form suitable remuneration policies
Share Transfer and Investor Grievance Committee
Details of the Members Compliance Officer No of Complaints received and pending and
pending transfers as on close of the financial year The committee functions under the
Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24
Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R
Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance
Officer of the Company
COMPANY STRUCTURE
IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock
Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory
Services and Portfolio Management Services It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with
NSDL as well as CDSL as a depository participant providing a one-stop solution for clients
trading in the equities market It has recently launched its Investment banking and
Institutional Broking business
A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients
These services are offered to clients as different schemes which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 17
growth Around 84 have shown interest in expanding their institutional
client base Nearly 51 of such firms are located in the West 25 in North
15 are from South and 9 from East Since the past couple of years India
along with Korea and Taiwan has been one of the preferred destinations for
the FIIs With corporate restructuring rising market capitalization and sectoral
friendly policies helping the FIIs more than two thirds of the firms are
interested in increasing their FII client base Amongst these firms west again
has maximum representation of 53 followed by North with 22 South has
15 firms and East makes up for 9
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19
INTRODUCTION TO INDIAINFOLINE
IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an
independent business research and information provider We gradually evolved into a one-
stop financial services solutions provider Our strong management team comprises competent
and dedicated professionals
We are a pan-India financial services organization across 1361 business locations and a
presence in 428 cities Our global footprint extends across geographies with offices in New
York Singapore and Dubai We are listed on the Bombay Stock Exchange (BSE) and the
National Stock Exchange (NSE)
We offer a wide range of services and products comprising broking (retail and institutional
equities and commodities) wealth management credit and finance insurance asset
management and investment banking
We are registered with the BSE and the NSE for securities trading MCX NCDEX and
DGCX for commodities trading CDSL and NSDL as depository participants We are
registered as a Category I merchant banker and are a SEBI registered portfolio manager We
also received the FII license in IIFL Inc IIFL Securities Pte Ltd received approval from the
Monetary Authority of Singapore to carry out corporate advisory and dealing in securities
operations Two subsidiaries ndash India Infoline Investment Services and Moneyline Credit
Limited ndash are registered with RBI as non-deposit taking non-banking financial services
companies India infoline Housing Finance Ltd the housing finance arm is registered with
the National Housing Bank
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20
HISTROY OF INDIAINFOLINE
The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity
Research and Services Private Limited at Mumbai under the Companies Act 1956 with
Registration No 11 93797 The IndiaInfoline Group commenced its operations as an
independent provider of information analysis and research covering Indian businesses
financial markets and economy to institutional customers We became a public limited
company on April 28 2000 and the name of the Company was changed to Probity Research
and Services Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a
mass retail segment and transformed our business model from providing information services
to institutional customers to retail customers Hence we launched our Internet portal
wwwindiainfolinecom in May 1999 and started providing news and market information
independent research interviews with business leaders and other specialized features
In May 2000 the name of our Company was changed to India Infolinecom Limited
to reflect the transformation of our business Over a period of time we have emerged as one
of the leading business and financial information services provider in India
In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of
financial information and analysis by diversifying into transactional services primarily for
online trading in shares and securities and online as well as offline distribution of personal
financial products like mutual funds and RBI Bonds These activities were carried on by our
wholly owned subsidiaries
The India Infoline Grouprsquos broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July 2000 It
combined competitive brokerage rates and research supported by Internet technology
Besides investment advice from an experienced team of research analysts we also offer real
time stock quotes market news and price charts with multiple tools for technical analysis
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21
Acquisition of Agri Marketing Services Limited (Agri)
In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri
Marketing Services Limited from their owners in exchange for the issuance of 508482 of
our equity shares Agri was a direct selling agent of personal financial products including
mutual funds fixed deposits corporate bonds and post-office instruments At the time of our
acquisition Agri operated 32 branches in South and West India serving more than 30000
customers with a staff of approximately 180 employees After the acquisition we changed
the company name to India Infolinecom Distribution Company Limited
The India Infoline group comprising the holding company India Infoline Ltd (NSE
INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian
financial services space India Infoline offers the entire gamut of financial services covering
investment products ranging from Equities and derivatives Commodities Portfolio
Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment
Banking GoI bonds and other small savings instruments It owns and manages the website
wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal
finance stock markets economy and business
A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none
other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo
IndiaInfolinersquos research is available not just over the internet but also on international wire
services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is
amongst the most read Indian brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22
A network of 753 business locations spread over 346 cities across India facilitates the
smooth acquisition and servicing of a large customer base All these offices are connected
with the corporate office in Mumbai with cutting edge networking technology
The group caters to a customer base of over 500000 over a variety of mediums viz online
over the phone and at our branches The Group is strengthening its institutional broking and
investment banking services and has built a team of experienced research analysts sales and
trading professionals
IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will
give a more meaningful picture of the Company to the investors Reference to the company
or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise
specified
VISION
Our vision is to be the most respected company in the financial services space
MISSION
ldquoTo become a full-fledged financial services company known for its quality of advice
personalized services and cutting edge technologyrdquo
COMPANY PHILISOPHY
The IndiaInfoline Group is committed to placing the Investor First by continuously striving
to increase the efficiency of the operations as well as the systems and processes for use of
corporate resources in such a way so as to maximize the value to the stakeholders The Group
aims at achieving not only the highest possible standards of legal and regulatory compliances
but also of effective management
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23
COMMITTEE
Audit Committee
Terms of reference amp Composition Name of members and Chairman The Audit committee
comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv
Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and
Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as
under - To investigate into any matter that may be prescribed under the provisions of Section
292A of The Companies Act 1956 - Recommendation and removal of External Auditor and
fixation of the Audit Fees - Reviewing with the management the financial statements before
submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and
disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function
Compensation Remuneration Committee
Terms of reference amp Composition Name of members and Chairman The Compensation
Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr
Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of
reference of this committee are as under - To fix suitable remuneration package of all the
Executive Directors and Non Executive Directors Senior Employees and officers ie Salary
perquisites bonuses stock options pensions etc - Determination of the fixed component and
performance linked incentives alongwith the performance criteria to all employees of the
company - Service Contracts Notice Period Severance Fees of Directors and employees -
Stock Option details whether to be issued at discount as well as the period over which to be
accrued and over which exercisable - To conduct discussions with the HR department and
form suitable remuneration policies
Share Transfer and Investor Grievance Committee
Details of the Members Compliance Officer No of Complaints received and pending and
pending transfers as on close of the financial year The committee functions under the
Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24
Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R
Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance
Officer of the Company
COMPANY STRUCTURE
IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock
Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory
Services and Portfolio Management Services It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with
NSDL as well as CDSL as a depository participant providing a one-stop solution for clients
trading in the equities market It has recently launched its Investment banking and
Institutional Broking business
A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients
These services are offered to clients as different schemes which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 18
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19
INTRODUCTION TO INDIAINFOLINE
IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an
independent business research and information provider We gradually evolved into a one-
stop financial services solutions provider Our strong management team comprises competent
and dedicated professionals
We are a pan-India financial services organization across 1361 business locations and a
presence in 428 cities Our global footprint extends across geographies with offices in New
York Singapore and Dubai We are listed on the Bombay Stock Exchange (BSE) and the
National Stock Exchange (NSE)
We offer a wide range of services and products comprising broking (retail and institutional
equities and commodities) wealth management credit and finance insurance asset
management and investment banking
We are registered with the BSE and the NSE for securities trading MCX NCDEX and
DGCX for commodities trading CDSL and NSDL as depository participants We are
registered as a Category I merchant banker and are a SEBI registered portfolio manager We
also received the FII license in IIFL Inc IIFL Securities Pte Ltd received approval from the
Monetary Authority of Singapore to carry out corporate advisory and dealing in securities
operations Two subsidiaries ndash India Infoline Investment Services and Moneyline Credit
Limited ndash are registered with RBI as non-deposit taking non-banking financial services
companies India infoline Housing Finance Ltd the housing finance arm is registered with
the National Housing Bank
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20
HISTROY OF INDIAINFOLINE
The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity
Research and Services Private Limited at Mumbai under the Companies Act 1956 with
Registration No 11 93797 The IndiaInfoline Group commenced its operations as an
independent provider of information analysis and research covering Indian businesses
financial markets and economy to institutional customers We became a public limited
company on April 28 2000 and the name of the Company was changed to Probity Research
and Services Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a
mass retail segment and transformed our business model from providing information services
to institutional customers to retail customers Hence we launched our Internet portal
wwwindiainfolinecom in May 1999 and started providing news and market information
independent research interviews with business leaders and other specialized features
In May 2000 the name of our Company was changed to India Infolinecom Limited
to reflect the transformation of our business Over a period of time we have emerged as one
of the leading business and financial information services provider in India
In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of
financial information and analysis by diversifying into transactional services primarily for
online trading in shares and securities and online as well as offline distribution of personal
financial products like mutual funds and RBI Bonds These activities were carried on by our
wholly owned subsidiaries
The India Infoline Grouprsquos broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July 2000 It
combined competitive brokerage rates and research supported by Internet technology
Besides investment advice from an experienced team of research analysts we also offer real
time stock quotes market news and price charts with multiple tools for technical analysis
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21
Acquisition of Agri Marketing Services Limited (Agri)
In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri
Marketing Services Limited from their owners in exchange for the issuance of 508482 of
our equity shares Agri was a direct selling agent of personal financial products including
mutual funds fixed deposits corporate bonds and post-office instruments At the time of our
acquisition Agri operated 32 branches in South and West India serving more than 30000
customers with a staff of approximately 180 employees After the acquisition we changed
the company name to India Infolinecom Distribution Company Limited
The India Infoline group comprising the holding company India Infoline Ltd (NSE
INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian
financial services space India Infoline offers the entire gamut of financial services covering
investment products ranging from Equities and derivatives Commodities Portfolio
Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment
Banking GoI bonds and other small savings instruments It owns and manages the website
wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal
finance stock markets economy and business
A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none
other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo
IndiaInfolinersquos research is available not just over the internet but also on international wire
services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is
amongst the most read Indian brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22
A network of 753 business locations spread over 346 cities across India facilitates the
smooth acquisition and servicing of a large customer base All these offices are connected
with the corporate office in Mumbai with cutting edge networking technology
The group caters to a customer base of over 500000 over a variety of mediums viz online
over the phone and at our branches The Group is strengthening its institutional broking and
investment banking services and has built a team of experienced research analysts sales and
trading professionals
IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will
give a more meaningful picture of the Company to the investors Reference to the company
or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise
specified
VISION
Our vision is to be the most respected company in the financial services space
MISSION
ldquoTo become a full-fledged financial services company known for its quality of advice
personalized services and cutting edge technologyrdquo
COMPANY PHILISOPHY
The IndiaInfoline Group is committed to placing the Investor First by continuously striving
to increase the efficiency of the operations as well as the systems and processes for use of
corporate resources in such a way so as to maximize the value to the stakeholders The Group
aims at achieving not only the highest possible standards of legal and regulatory compliances
but also of effective management
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23
COMMITTEE
Audit Committee
Terms of reference amp Composition Name of members and Chairman The Audit committee
comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv
Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and
Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as
under - To investigate into any matter that may be prescribed under the provisions of Section
292A of The Companies Act 1956 - Recommendation and removal of External Auditor and
fixation of the Audit Fees - Reviewing with the management the financial statements before
submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and
disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function
Compensation Remuneration Committee
Terms of reference amp Composition Name of members and Chairman The Compensation
Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr
Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of
reference of this committee are as under - To fix suitable remuneration package of all the
Executive Directors and Non Executive Directors Senior Employees and officers ie Salary
perquisites bonuses stock options pensions etc - Determination of the fixed component and
performance linked incentives alongwith the performance criteria to all employees of the
company - Service Contracts Notice Period Severance Fees of Directors and employees -
Stock Option details whether to be issued at discount as well as the period over which to be
accrued and over which exercisable - To conduct discussions with the HR department and
form suitable remuneration policies
Share Transfer and Investor Grievance Committee
Details of the Members Compliance Officer No of Complaints received and pending and
pending transfers as on close of the financial year The committee functions under the
Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24
Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R
Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance
Officer of the Company
COMPANY STRUCTURE
IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock
Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory
Services and Portfolio Management Services It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with
NSDL as well as CDSL as a depository participant providing a one-stop solution for clients
trading in the equities market It has recently launched its Investment banking and
Institutional Broking business
A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients
These services are offered to clients as different schemes which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 19
INTRODUCTION TO INDIAINFOLINE
IndiaInfoline founded in 1995 by Mr Nirmal Jain (Chairman and Managing Director) as an
independent business research and information provider We gradually evolved into a one-
stop financial services solutions provider Our strong management team comprises competent
and dedicated professionals
We are a pan-India financial services organization across 1361 business locations and a
presence in 428 cities Our global footprint extends across geographies with offices in New
York Singapore and Dubai We are listed on the Bombay Stock Exchange (BSE) and the
National Stock Exchange (NSE)
We offer a wide range of services and products comprising broking (retail and institutional
equities and commodities) wealth management credit and finance insurance asset
management and investment banking
We are registered with the BSE and the NSE for securities trading MCX NCDEX and
DGCX for commodities trading CDSL and NSDL as depository participants We are
registered as a Category I merchant banker and are a SEBI registered portfolio manager We
also received the FII license in IIFL Inc IIFL Securities Pte Ltd received approval from the
Monetary Authority of Singapore to carry out corporate advisory and dealing in securities
operations Two subsidiaries ndash India Infoline Investment Services and Moneyline Credit
Limited ndash are registered with RBI as non-deposit taking non-banking financial services
companies India infoline Housing Finance Ltd the housing finance arm is registered with
the National Housing Bank
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20
HISTROY OF INDIAINFOLINE
The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity
Research and Services Private Limited at Mumbai under the Companies Act 1956 with
Registration No 11 93797 The IndiaInfoline Group commenced its operations as an
independent provider of information analysis and research covering Indian businesses
financial markets and economy to institutional customers We became a public limited
company on April 28 2000 and the name of the Company was changed to Probity Research
and Services Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a
mass retail segment and transformed our business model from providing information services
to institutional customers to retail customers Hence we launched our Internet portal
wwwindiainfolinecom in May 1999 and started providing news and market information
independent research interviews with business leaders and other specialized features
In May 2000 the name of our Company was changed to India Infolinecom Limited
to reflect the transformation of our business Over a period of time we have emerged as one
of the leading business and financial information services provider in India
In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of
financial information and analysis by diversifying into transactional services primarily for
online trading in shares and securities and online as well as offline distribution of personal
financial products like mutual funds and RBI Bonds These activities were carried on by our
wholly owned subsidiaries
The India Infoline Grouprsquos broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July 2000 It
combined competitive brokerage rates and research supported by Internet technology
Besides investment advice from an experienced team of research analysts we also offer real
time stock quotes market news and price charts with multiple tools for technical analysis
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21
Acquisition of Agri Marketing Services Limited (Agri)
In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri
Marketing Services Limited from their owners in exchange for the issuance of 508482 of
our equity shares Agri was a direct selling agent of personal financial products including
mutual funds fixed deposits corporate bonds and post-office instruments At the time of our
acquisition Agri operated 32 branches in South and West India serving more than 30000
customers with a staff of approximately 180 employees After the acquisition we changed
the company name to India Infolinecom Distribution Company Limited
The India Infoline group comprising the holding company India Infoline Ltd (NSE
INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian
financial services space India Infoline offers the entire gamut of financial services covering
investment products ranging from Equities and derivatives Commodities Portfolio
Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment
Banking GoI bonds and other small savings instruments It owns and manages the website
wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal
finance stock markets economy and business
A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none
other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo
IndiaInfolinersquos research is available not just over the internet but also on international wire
services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is
amongst the most read Indian brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22
A network of 753 business locations spread over 346 cities across India facilitates the
smooth acquisition and servicing of a large customer base All these offices are connected
with the corporate office in Mumbai with cutting edge networking technology
The group caters to a customer base of over 500000 over a variety of mediums viz online
over the phone and at our branches The Group is strengthening its institutional broking and
investment banking services and has built a team of experienced research analysts sales and
trading professionals
IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will
give a more meaningful picture of the Company to the investors Reference to the company
or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise
specified
VISION
Our vision is to be the most respected company in the financial services space
MISSION
ldquoTo become a full-fledged financial services company known for its quality of advice
personalized services and cutting edge technologyrdquo
COMPANY PHILISOPHY
The IndiaInfoline Group is committed to placing the Investor First by continuously striving
to increase the efficiency of the operations as well as the systems and processes for use of
corporate resources in such a way so as to maximize the value to the stakeholders The Group
aims at achieving not only the highest possible standards of legal and regulatory compliances
but also of effective management
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23
COMMITTEE
Audit Committee
Terms of reference amp Composition Name of members and Chairman The Audit committee
comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv
Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and
Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as
under - To investigate into any matter that may be prescribed under the provisions of Section
292A of The Companies Act 1956 - Recommendation and removal of External Auditor and
fixation of the Audit Fees - Reviewing with the management the financial statements before
submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and
disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function
Compensation Remuneration Committee
Terms of reference amp Composition Name of members and Chairman The Compensation
Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr
Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of
reference of this committee are as under - To fix suitable remuneration package of all the
Executive Directors and Non Executive Directors Senior Employees and officers ie Salary
perquisites bonuses stock options pensions etc - Determination of the fixed component and
performance linked incentives alongwith the performance criteria to all employees of the
company - Service Contracts Notice Period Severance Fees of Directors and employees -
Stock Option details whether to be issued at discount as well as the period over which to be
accrued and over which exercisable - To conduct discussions with the HR department and
form suitable remuneration policies
Share Transfer and Investor Grievance Committee
Details of the Members Compliance Officer No of Complaints received and pending and
pending transfers as on close of the financial year The committee functions under the
Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24
Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R
Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance
Officer of the Company
COMPANY STRUCTURE
IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock
Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory
Services and Portfolio Management Services It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with
NSDL as well as CDSL as a depository participant providing a one-stop solution for clients
trading in the equities market It has recently launched its Investment banking and
Institutional Broking business
A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients
These services are offered to clients as different schemes which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 20
HISTROY OF INDIAINFOLINE
The IndiaInfoline Group was originally incorporated on October 18 1995 as Probity
Research and Services Private Limited at Mumbai under the Companies Act 1956 with
Registration No 11 93797 The IndiaInfoline Group commenced its operations as an
independent provider of information analysis and research covering Indian businesses
financial markets and economy to institutional customers We became a public limited
company on April 28 2000 and the name of the Company was changed to Probity Research
and Services Limited The name of the Company was changed to India Infolinecom Limited
on May 23 2000 and later to India Infoline Limited on March 23 2001
In 1999 The IndiaInfoline Group identified the potential of the Internet to cater to a
mass retail segment and transformed our business model from providing information services
to institutional customers to retail customers Hence we launched our Internet portal
wwwindiainfolinecom in May 1999 and started providing news and market information
independent research interviews with business leaders and other specialized features
In May 2000 the name of our Company was changed to India Infolinecom Limited
to reflect the transformation of our business Over a period of time we have emerged as one
of the leading business and financial information services provider in India
In the year 2000 The India Infoline Group leveraged itrsquos position as a provider of
financial information and analysis by diversifying into transactional services primarily for
online trading in shares and securities and online as well as offline distribution of personal
financial products like mutual funds and RBI Bonds These activities were carried on by our
wholly owned subsidiaries
The India Infoline Grouprsquos broking services was launched under the brand name of
5paisacom through our subsidiary India Infoline Securities Private Limited and
www5paisacom the e-broking portal was launched for online trading in July 2000 It
combined competitive brokerage rates and research supported by Internet technology
Besides investment advice from an experienced team of research analysts we also offer real
time stock quotes market news and price charts with multiple tools for technical analysis
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21
Acquisition of Agri Marketing Services Limited (Agri)
In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri
Marketing Services Limited from their owners in exchange for the issuance of 508482 of
our equity shares Agri was a direct selling agent of personal financial products including
mutual funds fixed deposits corporate bonds and post-office instruments At the time of our
acquisition Agri operated 32 branches in South and West India serving more than 30000
customers with a staff of approximately 180 employees After the acquisition we changed
the company name to India Infolinecom Distribution Company Limited
The India Infoline group comprising the holding company India Infoline Ltd (NSE
INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian
financial services space India Infoline offers the entire gamut of financial services covering
investment products ranging from Equities and derivatives Commodities Portfolio
Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment
Banking GoI bonds and other small savings instruments It owns and manages the website
wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal
finance stock markets economy and business
A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none
other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo
IndiaInfolinersquos research is available not just over the internet but also on international wire
services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is
amongst the most read Indian brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22
A network of 753 business locations spread over 346 cities across India facilitates the
smooth acquisition and servicing of a large customer base All these offices are connected
with the corporate office in Mumbai with cutting edge networking technology
The group caters to a customer base of over 500000 over a variety of mediums viz online
over the phone and at our branches The Group is strengthening its institutional broking and
investment banking services and has built a team of experienced research analysts sales and
trading professionals
IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will
give a more meaningful picture of the Company to the investors Reference to the company
or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise
specified
VISION
Our vision is to be the most respected company in the financial services space
MISSION
ldquoTo become a full-fledged financial services company known for its quality of advice
personalized services and cutting edge technologyrdquo
COMPANY PHILISOPHY
The IndiaInfoline Group is committed to placing the Investor First by continuously striving
to increase the efficiency of the operations as well as the systems and processes for use of
corporate resources in such a way so as to maximize the value to the stakeholders The Group
aims at achieving not only the highest possible standards of legal and regulatory compliances
but also of effective management
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23
COMMITTEE
Audit Committee
Terms of reference amp Composition Name of members and Chairman The Audit committee
comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv
Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and
Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as
under - To investigate into any matter that may be prescribed under the provisions of Section
292A of The Companies Act 1956 - Recommendation and removal of External Auditor and
fixation of the Audit Fees - Reviewing with the management the financial statements before
submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and
disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function
Compensation Remuneration Committee
Terms of reference amp Composition Name of members and Chairman The Compensation
Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr
Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of
reference of this committee are as under - To fix suitable remuneration package of all the
Executive Directors and Non Executive Directors Senior Employees and officers ie Salary
perquisites bonuses stock options pensions etc - Determination of the fixed component and
performance linked incentives alongwith the performance criteria to all employees of the
company - Service Contracts Notice Period Severance Fees of Directors and employees -
Stock Option details whether to be issued at discount as well as the period over which to be
accrued and over which exercisable - To conduct discussions with the HR department and
form suitable remuneration policies
Share Transfer and Investor Grievance Committee
Details of the Members Compliance Officer No of Complaints received and pending and
pending transfers as on close of the financial year The committee functions under the
Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24
Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R
Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance
Officer of the Company
COMPANY STRUCTURE
IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock
Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory
Services and Portfolio Management Services It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with
NSDL as well as CDSL as a depository participant providing a one-stop solution for clients
trading in the equities market It has recently launched its Investment banking and
Institutional Broking business
A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients
These services are offered to clients as different schemes which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 21
Acquisition of Agri Marketing Services Limited (Agri)
In March 2000 The IndiaInfoline Group acquired 100 of the equity shares of Agri
Marketing Services Limited from their owners in exchange for the issuance of 508482 of
our equity shares Agri was a direct selling agent of personal financial products including
mutual funds fixed deposits corporate bonds and post-office instruments At the time of our
acquisition Agri operated 32 branches in South and West India serving more than 30000
customers with a staff of approximately 180 employees After the acquisition we changed
the company name to India Infolinecom Distribution Company Limited
The India Infoline group comprising the holding company India Infoline Ltd (NSE
INDIAINFO BSE 532636) and itrsquos subsidiaries is one of the leading players in the Indian
financial services space India Infoline offers the entire gamut of financial services covering
investment products ranging from Equities and derivatives Commodities Portfolio
Management Services Mutual Funds Life Insurance Fixed deposits Loans Investment
Banking GoI bonds and other small savings instruments It owns and manages the website
wwwindiinfolinecom which is one of Indiarsquos leading online destinations for personal
finance stock markets economy and business
A forerunner in the field of equity research IndiaInfolinersquos research is acknowledged by none
other than Forbes as lsquoBest of the Webrsquo and lsquohellipa must read for investors in Asiarsquo
IndiaInfolinersquos research is available not just over the internet but also on international wire
services like Bloomberg (Code IILL) Thomson First Call and Internet Securities where it is
amongst the most read Indian brokers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22
A network of 753 business locations spread over 346 cities across India facilitates the
smooth acquisition and servicing of a large customer base All these offices are connected
with the corporate office in Mumbai with cutting edge networking technology
The group caters to a customer base of over 500000 over a variety of mediums viz online
over the phone and at our branches The Group is strengthening its institutional broking and
investment banking services and has built a team of experienced research analysts sales and
trading professionals
IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will
give a more meaningful picture of the Company to the investors Reference to the company
or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise
specified
VISION
Our vision is to be the most respected company in the financial services space
MISSION
ldquoTo become a full-fledged financial services company known for its quality of advice
personalized services and cutting edge technologyrdquo
COMPANY PHILISOPHY
The IndiaInfoline Group is committed to placing the Investor First by continuously striving
to increase the efficiency of the operations as well as the systems and processes for use of
corporate resources in such a way so as to maximize the value to the stakeholders The Group
aims at achieving not only the highest possible standards of legal and regulatory compliances
but also of effective management
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23
COMMITTEE
Audit Committee
Terms of reference amp Composition Name of members and Chairman The Audit committee
comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv
Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and
Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as
under - To investigate into any matter that may be prescribed under the provisions of Section
292A of The Companies Act 1956 - Recommendation and removal of External Auditor and
fixation of the Audit Fees - Reviewing with the management the financial statements before
submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and
disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function
Compensation Remuneration Committee
Terms of reference amp Composition Name of members and Chairman The Compensation
Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr
Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of
reference of this committee are as under - To fix suitable remuneration package of all the
Executive Directors and Non Executive Directors Senior Employees and officers ie Salary
perquisites bonuses stock options pensions etc - Determination of the fixed component and
performance linked incentives alongwith the performance criteria to all employees of the
company - Service Contracts Notice Period Severance Fees of Directors and employees -
Stock Option details whether to be issued at discount as well as the period over which to be
accrued and over which exercisable - To conduct discussions with the HR department and
form suitable remuneration policies
Share Transfer and Investor Grievance Committee
Details of the Members Compliance Officer No of Complaints received and pending and
pending transfers as on close of the financial year The committee functions under the
Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24
Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R
Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance
Officer of the Company
COMPANY STRUCTURE
IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock
Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory
Services and Portfolio Management Services It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with
NSDL as well as CDSL as a depository participant providing a one-stop solution for clients
trading in the equities market It has recently launched its Investment banking and
Institutional Broking business
A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients
These services are offered to clients as different schemes which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 22
A network of 753 business locations spread over 346 cities across India facilitates the
smooth acquisition and servicing of a large customer base All these offices are connected
with the corporate office in Mumbai with cutting edge networking technology
The group caters to a customer base of over 500000 over a variety of mediums viz online
over the phone and at our branches The Group is strengthening its institutional broking and
investment banking services and has built a team of experienced research analysts sales and
trading professionals
IndiaInfoline refers to IndiaInfoline Ltd and its subsidiaries The consolidated figures will
give a more meaningful picture of the Company to the investors Reference to the company
or IndiaInfoline is to the business done by the company and its subsidiaries unless otherwise
specified
VISION
Our vision is to be the most respected company in the financial services space
MISSION
ldquoTo become a full-fledged financial services company known for its quality of advice
personalized services and cutting edge technologyrdquo
COMPANY PHILISOPHY
The IndiaInfoline Group is committed to placing the Investor First by continuously striving
to increase the efficiency of the operations as well as the systems and processes for use of
corporate resources in such a way so as to maximize the value to the stakeholders The Group
aims at achieving not only the highest possible standards of legal and regulatory compliances
but also of effective management
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23
COMMITTEE
Audit Committee
Terms of reference amp Composition Name of members and Chairman The Audit committee
comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv
Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and
Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as
under - To investigate into any matter that may be prescribed under the provisions of Section
292A of The Companies Act 1956 - Recommendation and removal of External Auditor and
fixation of the Audit Fees - Reviewing with the management the financial statements before
submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and
disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function
Compensation Remuneration Committee
Terms of reference amp Composition Name of members and Chairman The Compensation
Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr
Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of
reference of this committee are as under - To fix suitable remuneration package of all the
Executive Directors and Non Executive Directors Senior Employees and officers ie Salary
perquisites bonuses stock options pensions etc - Determination of the fixed component and
performance linked incentives alongwith the performance criteria to all employees of the
company - Service Contracts Notice Period Severance Fees of Directors and employees -
Stock Option details whether to be issued at discount as well as the period over which to be
accrued and over which exercisable - To conduct discussions with the HR department and
form suitable remuneration policies
Share Transfer and Investor Grievance Committee
Details of the Members Compliance Officer No of Complaints received and pending and
pending transfers as on close of the financial year The committee functions under the
Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24
Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R
Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance
Officer of the Company
COMPANY STRUCTURE
IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock
Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory
Services and Portfolio Management Services It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with
NSDL as well as CDSL as a depository participant providing a one-stop solution for clients
trading in the equities market It has recently launched its Investment banking and
Institutional Broking business
A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients
These services are offered to clients as different schemes which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 23
COMMITTEE
Audit Committee
Terms of reference amp Composition Name of members and Chairman The Audit committee
comprises Mr Nilesh Vikamsey Chairman of the Committee Mr Sat Pal Khattar Mr Sanjiv
Ahuja and Mr Kranti Sinha three of whom are independent Directors The top Executivess and
Internal Auditors are invitees to the Meeting The Terms of reference of this committee are as
under - To investigate into any matter that may be prescribed under the provisions of Section
292A of The Companies Act 1956 - Recommendation and removal of External Auditor and
fixation of the Audit Fees - Reviewing with the management the financial statements before
submission of the same to the Board - Overseeing of Companyrsquos financial reporting process and
disclosure of its financial information - Reviewing the Adequacy of the Internal Audit Function
Compensation Remuneration Committee
Terms of reference amp Composition Name of members and Chairman The Compensation
Remuneration Committee comprises Mr Sanjiv Ahuja Chairman of the Committee Mr
Nilesh Vikamsey and Mr Kranti Sinha all of whom are independent Directors The Terms of
reference of this committee are as under - To fix suitable remuneration package of all the
Executive Directors and Non Executive Directors Senior Employees and officers ie Salary
perquisites bonuses stock options pensions etc - Determination of the fixed component and
performance linked incentives alongwith the performance criteria to all employees of the
company - Service Contracts Notice Period Severance Fees of Directors and employees -
Stock Option details whether to be issued at discount as well as the period over which to be
accrued and over which exercisable - To conduct discussions with the HR department and
form suitable remuneration policies
Share Transfer and Investor Grievance Committee
Details of the Members Compliance Officer No of Complaints received and pending and
pending transfers as on close of the financial year The committee functions under the
Chairmanship of Mr Kranti Sinha a Non-executive independent Director The other
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24
Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R
Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance
Officer of the Company
COMPANY STRUCTURE
IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock
Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory
Services and Portfolio Management Services It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with
NSDL as well as CDSL as a depository participant providing a one-stop solution for clients
trading in the equities market It has recently launched its Investment banking and
Institutional Broking business
A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients
These services are offered to clients as different schemes which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 24
Members of the committee are Mr Sanjiv Ahuja Independent Director and Mr R
Venkataraman Executive Director Ms Komal Parikh Company Secretary is the Compliance
Officer of the Company
COMPANY STRUCTURE
IndiaInfoline Limited is listed on both the leading stock exchanges in India viz the Stock
Exchange Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of
both the exchanges It is engaged in the businesses of Equities broking Wealth Advisory
Services and Portfolio Management Services It offers broking services in the Cash and
Derivatives segments of the NSE as well as the Cash segment of the BSE It is registered with
NSDL as well as CDSL as a depository participant providing a one-stop solution for clients
trading in the equities market It has recently launched its Investment banking and
Institutional Broking business
A SEBI authorized Portfolio Manager it offers Portfolio Management Services to clients
These services are offered to clients as different schemes which are based on differing
investment strategies made to reflect the varied risk-return preferences of clients
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 25
PRODUCT amp SERVICES
Equities
India Infoline provided the prospect of researched investing to its clients which was
hitherto restricted only to the institutions Research for the retail investor did not exist prior
to India Infoline India Infoline leveraged technology to bring the convenience of trading to
the investorrsquos location of preference (residence or office) through computerized access
India Infoline made it possible for clients to view transaction costs and ledger updates in
real time
Over the last five years India Infoline sharpened its competitive edge through the
following initiatives
Multi-channel delivery model
The Company is among the few financial intermediaries in India to offer a complement of
online and offline broking The Companies network of branches also allows customers to
place orders on phone or visit our branches for trading
Integrated middle and back office
The customer can trade on the BSE and NSE in the cash as well as the derivatives segment
all through the available multiple options of Internet phone or branch presence
Multiple-trading options
The Company harnessed technology to offer services at among the lowest rates in the
business
Membership
The Company widened client reach in trading on the domestic and international exchanges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 26
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which
facilitate business growth without a corresponding increase in costs
Content
The Company has leveraged its research capability to provide regular updates and
investment picks across the short and long-term
Service
Clients can access the customer service team through various media like toll-free lines
emails and Internet- messenger chat for instant query resolution The Companies customer
service executives proactively contact customers to inform them of key changes and
initiatives taken by the Company Business World rated the Companies customer service as
Best in their survey of online trading sites carried out in December 2003
Key features
Membership on the Bombay Stock Exchange Limited and the National Stock Exchange
Registered with the NSDL as well as CDSL as a depository participant providing a
one-stop solution for clients trading in the equities market
Broking services in cash and derivative segments online as well as offline
Presence across 350 cities and towns with a network of over 850 business locations
Equity client base of over 500000 clients
Provision of free and world-class research to all clients
Commodities
India Infolines extension into commodities trading reconciles its strategic intent to emerge
as a one stop solutions financial intermediary Its experience in securities broking has
empowered it with requisite skills and technologies Increased offering The Companies
commodities business provides a contra-cyclical alternative to equities broking The
Company was among the first to offer the facility of commodities trading in Indias young
commodities market (the MCX commenced operations only in 2003) Average monthly
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 27
turnover on the commodity exchanges increased from Rs 034 bn to Rs 2002 bn The
commodities market has several products with different and non-correlated cycles On the
whole the business is fairly insulated against cyclical gyrations in the business
IndiaInfoline distinguished its business through the interplay of knowledge and
technology
Complete solution
The Company provides a complete - advice to execution solution facilitated by information
and advice on likely commodity trends in the Indian and international environment
Technology
The Company has extended the trading terminal to the investors homeworkplace
reinforced with real-time commodity information and ledger position
Rates
The Company harnessed technology to offer services at among the lowest rates in the
business Membership The Company widened client reach in trading on the domestic and
international exchanges
Key Features
Enjoys memberships with the MCX and NCDEX two leading Indian commodities
exchanges
Recently acquired membership of the DGCX
Multi-channel delivery model making it among the select few to offer online as well as
offline trading facilities
Extended commodity trading to retail investors among the few Indian financial
intermediaries to do so
Online business at 80 of revenues dominates commodities trading revenues
Provides regular commodity updates pertaining to the Indian and international
environment
INSURANCE
An entry into this segment helped complete the clients product basket concurrently it graduated
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 28
the Company into a one stop retail financial solutions provider To ensure maximum reach to
customers across India we have employed a multi pronged approach and reach out to customers
via our Network Direct and Affiliate channels Following the opening of the sector in 1999-2000
a number of private sector insurance service providers commenced operations aggressively and
helped grow the market
The Companies entry into the insurance sector derisked the Company from a predominant
dependence on broking and equity-linked revenues The annuity based income generated from
insurance intermediation result in solid core revenues across the tenure of the policy
Over the last five years India Infoline sharpened its competitive edge in this business segment
through the following initiatives
Client base
Grew its 40000 strong client base through knowledge-led analysis translating into an attractive
opportunity to cross-sell products and generate referral business
Distribution network
Invested in a distribution network of 177 branches across 19 states which provided it with an
unmatched reach within its segment
Hands-on training
Invested aggressively in training its field force more than 100 hours a year in product attributes
across the insurance sector - highlighting various product details and marketing skills apart from
regular meets where best practices are shared
Technology
The Company provides a prudent mix of proprietary and outsourced technologies which facilitate
business growth without a corresponding increase in costs
Research and advice
Provided clients with advice on diverse investment products based on the customers existing and
prospective financial profile
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 29
Key features
India Infoline was the first corporate in India to get the agency licence in early 2001
The Company is the biggest corporate agency in India for life insurance products
The Company operates multiple channels namely branch network preferred client
group direct marketing corporate tax advisory walk-ins and seminars to reach out to
customers
INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so
effortless All you have to do is register with us and thatrsquos all No paperwork no
queues and No registration charges
If you are 5p customer use your existing login ID and Ledger (fund transfer) password
Indiainfoline offers you a host of mutual fund and IPO choices under one roof backed by
in-depth information and research to help you invest effortlessly
INVEST IN MF
Indiainfoline offers you a host of mutual fund choices under one roof backed by in-depth
research and advice from research house and tools configured as investor friendly
Investing in Mutual Funds has never been easier
APPLY IN IPOs
You could also invest in Initial Public Offers (IPOs) online without going through the
hassles of filling ANY application form paperwork
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 30
Know more about IPO
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are
about to hit the market and analysis on these recent IPO listings
prospectusoffer documents and IPO reports are few of the features which help
you keep on top of the IPO markets
Loans They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home
The different Housing Loan products can be classified as
Home Loans amp Home Extension Loans
NRI Loans
Land Loans
Home Equity Loans
What is a housing loan
Who can apply
General Terms and conditions
of a Housing Loan product
Charges applicable to housing
loan products
Repayment capacity
Credit documentation
Legal documentation
Tax Benefits
Property Insurance
What is a housing loan
They say you mustnt trust a man till you know his house Everyone likes hearing people say
Wow what a beautiful house you have From cave dwelling we have evolved and now a
house provides far more than just shelterit also becomes a source of pride A Housing Loan
is used as finance to help you buy or modify that perfect home The different Housing Loan
products can be classified as
Home Loan
Home Extension Loans
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 31
Home Improvement Loans
Land Loans
NRI Loans
Home Equity Loans
Short term Bridging Loans
Balance Transfer
Who can apply
As long as you want to buy a house in India you can apply for a Home Loan You could be a
Resident Indian or an NRI you could want to buy a property now or in the future but you
may still apply for a Home Loan In case you go with the last option and want to wait before
you consider nests all you have to be sure of is the amount you are willing to spend on this
property and the HfIs will let you know your eligibility based on your income which will help
you plan out your budget To find out your eligibility please use our calculator
General Terms and Conditions of a Housing Loan Product
You are allowed to visit zoos on the condition that you do not feed the animals When youre
18 you are allowed to go for that late night party on the condition that someone drops you
home before 12 Every step we take requires condition to be fulfilled Similarly these are the
general terms amp conditions of a Home Loan For more details please refer to the individual
product
LTV Ratio will not exceed a particular percentage This percentage differs from HFI
to HFI and the components of the value of property are covered in Cost of Property
Elastic can be stretched only to a certain extent The loan tenure also will not go
beyond 20 years However HFIs do provide for different tenures with different terms
and conditions
Your EMI normally does not exceed 50 of your Gross Monthly income
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 32
The total monthly payment towards all the loans you have availed of including the
present one will normally not exceed 50 of your Gross Monthly Income
Your loan eligibility is calculated using LTV IIR and FOIR norms and the lowest
from the three is chosen
Your profile is considered by the HFI before your repayment capacity is judged
If the HFI insists on a personal guarantor you need to provide one before the
disbursement of your loan
Your property should be both technically and legally clear before your loan can get
disbursed by the HFI
In case you have bought an under construction property your loan will be partly
disbursed as per the stages of construction and PEMI needs to be paid on it
The disbursement in most cases will be in the name of the builder or the seller or the
society or the development authority unless you have made some payment to them
Repayment of the loan is either via Deduction Against Salary Post Dated Cheques
standing instructions or by cash DD
You can either choose to repay the loan using the Annual rests or Monthly rests
Charges applicable to Housing Loans
The different kinds of charges applicable to Home Loans are listed below
Upfront Fees
Rate of Interest
Legal and Technical Charges
Stamp Duty and Registration Charges
Personal Guarantee from Charges
Cheque Bounce Charges
Delayed Payment Charges
Additional Charges
Incidental Charges
Prepayment Charges
PDC Swapping Charges
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 33
Legal and technical charges
Some HFIs charge you for the legal and technical checks undertaken on your documents and
property by lawyers and the technical team of the HFI
Stamp duty and registration charges
If you go in for a registered mortgage these charges incurred by the HFI are passed onto
you Sometimes these charges are rather heavy depending on the State laws in the state from
where you purchase your property
Personal Guarantee form charges
A piece of paper signed does not have much value unless stamped and validated by the
concerned authority That power of attorney document that you signed with your spouse
would not be credible unless signed on a Rs100 stamp paper Similarly HFIs currently
charge you a minimum of Rs100 to get the personal guarantee validated and stamped in the
eyes of the law
PDC swapping charges
In case you want to exchange the PDCs you gave the HFIs for EMI repayments because of a
change in bank accounts a change in EMI amount etc the HFis might charge a flat fee for
it
Repayment capacity
Your repayment capacity is judged according to your income and your income is considered
differently if you are salaried and differently if you are self-employed Income is used to
calculate the amount of money that you will be able to shell out every month towards your
loan installment using IIR and FOIR norms FOIR calculation also takes into account the
installments of loans you are currently repaying The lower between the IIR and FOIR is
chosen as your maximum repayment capacity This is then compared to the loan amount that
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 34
you have requested for and the loan eligibility as per LTV norms and the lowest of these
would be your final loan eligibility
Salaried Self-employed
Any extra income on your salary slip
(including overtime etc) is subtracted
Any non-recurring income that affects profit
(like sale of asset) is subtracted
50 of the average variable income over the
last 6 months is added
Any non-recurring expense that adversely
affects profits and was not capitalized (like
repairs and maintenance) is added
Any fixed cash or voucher payment that can
be proved is added
50 of the average depreciation of the last
two years is added
HRA that can be received and is not being
received is added
50 of the average annual income of the last
two years is added
Credit Documentation
Would you trust any Tom Dick or Harry with any matter at all We all require a certain
assurance from people before we trust them some sort of guarantee that they are trustworthy
For HFIs this guarantee rests in the form of tangible documents Credit documents are
required by all HFIs but vary in kind based on your occupation employer qualifications
experience etc Credit documents can be classified as
Income documents
Money money moneyno one can take a chance on the credibility of money matters because
at the end of the day business is business Almost everything about your loan is based on
your income and therefore proof regarding the same is required by the HFI to ensure that no
miscommunications occur
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 35
Personal documents
Previously tribes and clans had passwords without which you could not enter into the
territory as proof of who he was King Solomon had a ring as identification Throughout
history proof of identity has been important as mistaken identity has never been uncommon
To prevent any such shams HFIs also require a set of documents for a general Home Loan
Product identifying who you are
He following list out all the documents needed under this line will be placed the document
sent separately as an excel sheet
Legal Documentation
We might be living in the electronic age but that doesnt take away the importance and
monopoly of paper as everything to do with law will always be on paper To stick by this
unwritten rule there are legal documents that need to be submitted by you to the HFI for
mortgaging and these differ from state to state and also depend on your property type The
following form a broad outline of the documents required and a detailed list can be found
here
Copy of the offer letter sent by the HFI accepted by you
Title documents of the property which include
-Duly registered sale agreement
-Receipts of your own contribution
-Allotment letter
-Registration receipt
-If needed land documents indicating ownership
-Possession letter
-Lease agreement if the property is bought from a development authority
-Mortgage deed if the HFI opts for a registered mortgage
No Objection Certificate from the developer society or development authority
Personal Guarantees if required
Documents for alternate or additional security
Post dated cheques for the EMIs
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 36
These documents do NOT cover the entire list needed and if it is a resale property the
pertaining agreements etc will also need to be attached
Tax Benefits
Tax benefits are currently available only under Home Loans and Home Extension loans The
details are given under the respective sections
Property Insurance
Some events are not in our hands and are completely unavoidable Floods drought and
storms uproot trees and destroy the land Along with this the birds lose their homes and while
building a nest may not be that bad and the loss is not that great the money that you invest in
your cosy home might just be washed away For this reason insuring your property is a good
idea as you safeguard the asset against damage or loss Property insurance is not compulsory
though some HFIs insist on a mortgage redemption life insurance policy and you will
therefore get a reduced interest rate Some of the points that need to be noted regarding
property insurance are
You can choose the tenure of your insurance
The premium is charged up front
The longer your tenure the greater the discounts insurance companies offer you
News Letter
The Daily Market Strategy is your morning dose on the health of the markets Five intra-
day ideas unless the markets are really choppy coupled with a brief on the global markets
and any other cues which could impact the market Occasionally an investment idea from
the research team and a crisp round up of the previous days top stories Thats not all As a
subscriber to the Daily Market Strategy you even get research reports of India Infoline
research team on a priority basis
The IndiaInfoline Weekly Newsletter is your flashback for the week gone by A weekly
outlook coupled with the best of the web stories from India Infoline and links to important
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 37
investment ideas Leader Speak and features is delivered in your inbox every Friday
evening
Portfolio Management
You get recessions You have stock market declines If you dont understand thats going to
happen then youre not ready you wont do well in the markets No need to worry We at
India Infoline would take care of all issues related to managing your hard earned money
Our Portfolio Management Service is a product wherein an equity investment portfolio is
created to suit the investment objectives of a client We at India Infoline invest your resources
into stocks from different sectors depending on your risk-return profile This service is
particularly advisable for investors who cannot afford to give time or dont have that expertise
for day-to-day management of their equity portfolio
It is all about your money being managed by the experts while you continue with your
routine life Isnt it simple and totally hassle free
Whats more you can keep track of your dividends bonus rights issues with paperless
tracking So you always know how fast your investment is growing It basically means
assigning the right job to the right person
Research
IIFL special research cell where some of Indias finest financial analysts bring you
intensive research reports on how the stock market is faring when is the right time to
invest when to execute your order and more
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 38
IIFL make sure that investors are always prepared to make own investment decision when
the opportunity arises
IIFL bring you intensive research reports - whether sectoral or company-wise or more - that
tell you exactly when and where to invest So whenever there is an exciting investment
opportunity you are in the know and always ready to invest Research reports IIFL will help
you choose your investments wisely without wasting time Presented in a lucid and easy-to-
understand format these reports help you make informed decisions
ASSET MANAGEMENT
India Infoline is a leading pan-India mutual fund distribution house associated with leading
asset management companies It operates primarily in the retail segment leveraging its
existing distribution network to reach prospective clients It has received the in-principle
approval to set up a mutual fund
The group recently commenced its offshore asset management business under the lsquoIIFL
Capitalrsquo brand Also IIFL Securities Pte Ltd received approval from the Monetary
Authority of Singapore to carry out global asset management operations The Singapore arm
can now offer broking asset management and investment banking services
IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
With offices in New York Singapore and Dubai IIFL Capital aims to offer India-focused
equity products fund management and advisory services for offshore and domestic wealth
management customers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 39
MILESTONES ACHIEVED
1995
Incorporated as an equity research and consulting firm with a client base that included
leading FIIs banks consulting firms and corporates
1999
Restructured the business model to embrace the internet launched archivesindiainfolinecom
mobilised capital from reputed private equity investors
2000
Commenced the distribution of personal financial products launched online equity trading
entered life insurance distribution as a corporate agent Acknowledged by Forbes as lsquoBest of
the Webrsquo and lsquomust read for investorsrsquo
2004
Acquired commodities broking license launched Portfolio Management Service
2005
Listed on the Indian stock markets
2006
Acquired membership of DGCX launched investment banking services
2007
Launched a proprietary trading platform inducted an institutional equities team formed a
Singapore subsidiary raised over USD 300 mn in the group launched consumer finance
business under the lsquoMoneylinersquo brand
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 40
2008
Launched wealth management services under the lsquoIIFL Wealthrsquo brand set up India Infoline
Private Equity fund received the Insurance broking license from IRDA received the venture
capital license received inprinciple approval to sponsor a mutual fund received lsquoBest broker-
Indiarsquo award from FinanceAsia lsquoMost Improved Brokerage- Indiarsquo award from Asiamoney
2009
Received registration for a housing finance company from the National Housing Bank
received lsquoFastest growing Equity Broking House - Large firmsrsquo in India by Dun amp
Bradstreet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 41
MARKET SHARES OF COMPANY
Retail broking
IndiaInfoline has around 3 lakh customers It has a tie-up with Bank of Baroda
for e-broking
Institutional broking
IndiaInfoline has roped in Bharat Parajia director of sales at CLSA in
Singapore H Nemkumar CLSAs country head for India Aniruddha Dange CLSAs
head of research in India and Vasudev Jagannath CLSAs head of sales in India
While Parajia will join as head of institutional sales at India Infoline Dange will be
head of research and Nemkumar head of investment banking
Each one of them is bringing in more than 10 years of experience with a
top institutional brokerage in Asia The CLSA foursome will also pick up stakes in
India Infoline through the preferential allotment route Their collective stake would
add up to around 15 Parajia already holds a 288 stake in India Infoline He will
subscribe to 25 lakh equity warrants at Rs 440 eachNemkumar will pick up another
25 lakh while Jagannath and Aniruddha Dange will subscribe to 20 lakh warrants
each The preferential allotment includes the four men buying 90 lakh equity warrants
at a price of Rs 440 each of which 10 will be paid up front as their sign-on bonus
The remaining will be payable at the end of eighteen months when the warrants will
be convertible into sharesThat is all these guys will have to cough up about Rs 360
crore to convert their warrants into shares Currently the companys institutional
equities team has 35 people including research analysts and dealers
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 42
Consumer Finance
During the quarter it managed a book size of Rs 25 crore and has suffered a loss of
Rs 55 crore It expects to break even in 2-3 quarters NIM of 6-8 on personal loans
and 3-4 on home refinancing It is looking at a Rs 200 crore private-equity funding
for its consumer finance subsidiary It intends to leverage its extensive branch
network to expand its consumer finance division to tier-II and tier-III cities in the
coming quarters IndiaInfoline is going slow as it has just started this business with a
robust risk management system The company has roped in experts from Citi
Financial and other banks
Ticker 532636
Exchanges BOM
2009 Sales 9630900000
Major
Industry
Financial
Sub
Industry
Securities
Brokerage
Country INDIA
Employees 14105
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 43
CHALLENGES FACES BY INDIAINFOLINE
Category related - the market is skewed primarily to the metros with Mumbai Ahmedabad
and New Delhi accounting for major bulk of the trading
Competition related - due to high brand proliferation the market from a consumer standpoint
has become ldquocommoditizedrdquo given product parity in terms of offerings
Brand related - challenge being to maintain high decibel and impactful communication on a
sustained basis
Key executives
SNo Name Designation
1 Mr Nirmal Jain Chairman and Managing director
2 Mr A K Purwar Director
3 Mr R Venkataraman Executive Director
4 Mr Nilesh Vikamsey Independent Director
5 Mr Kranti Sinha Independent Director
6 Mr Sat Pal Khattar Non Executive Director
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 44
MARKETING STRATEGY OF INDIA
INFOLINE
Market Positioning
Market positioning statements of India Infoline are ldquoAt India Infoline we give you
single window servicerdquo and ldquoWe also ensure your comfortrdquo So India Infoline focus on the
consumers who prefer almost all investment activities at same place by providing number of
various financial services At India Infoline a person can purchase or sell shares debentures
etc and at the same place also demat it India Infoline also provides other investment option
to the same person at same place like Mutual Fund Insurance Fixed Deposit and Bonds etc
and help the person in designing his portfolio By this way India Infoline provides comfort to
its customers
Target Market
India Infoline uses demographic segmentation strategy and segment people based on
their occupation India Infoline uses selective specialization strategy for market targeting
Target person for the India Infoline Stock Broking and India Infoline Investment Service are
persons who can work as sub-broker for the companies Companies focus on Advisors of
Insurance and post office Tax consultants and CAs for making sub-broker
Marketing channel System
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 45
India Infoline uses one level marketing channel for investment product distribution
Sub-brokers work as intermediary between consumer and company Company has both
forward and backward flow of activity through channel Company distributes stationery
brokerage and information forward to its sub-broker The sub-brokers send filled forms
queries amount of investment etc back to the company
Training Channel Members
India Infoline provides training to the sub-brokers because they will be viewed as the
company by the investors The executives of India Infoline explain various new schemes of
investment to the sub-brokers with its objective risk factors and expected return Company
also periodically arrange seminar to guide sub-brokers
Advertising and Promotion
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers
India Infoline also publishes its weekly Stock Market Newsletter lsquoMarket Mantrarsquo
HUMAN RESOURCES
The India Infoline Grouprsquos Human Resources policy is based on the philosophy of ldquoOwner
Mindsetrdquo We believe that the key to our continued growth lies in unleashing the
entrepreneurial energy of our employees We encourage all employees to behave more as
51owners of their departments rather than employees Our people are highly driven and work
towards increasing India Infolinersquos brand and market share across product lines
We have developed extensive in-house training modules In addition our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company
Limited We lay emphasis on ldquoon the job trainingrdquo where an experienced and senior person
mentors a junior executive
In addition to salary our employees get performance-based incentives on a quarterly basis
We have also implemented an Employee Stock Option Plan
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 46
As on December 31 2009 the total employee strength of our company and our subsidiaries
was 1200
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 47
RESEARCH METHODOLOGY
i) Objective of the Study
To know percentage of people invest in mutual fund insurance equity and other
financial products and services
To know future prospects of their investment in the financial products and
services
ii) Data Collection
Primary data-
Primary data are data freshly gathered for a specific purpose The various sources of
primary data for my project are as follows
Banks
Local residents
People from industries
Mall
Small Retailers
Secondary Data-
Secondary data provide a starting point for research and offer the valuable source of
information
The secondary data was the most important source for my project because it gave us
information about company profile competitors market scenario market share etc
It also give us information of the financial industry its emergenceamp its importance in
country progress
We used secondary data for following sources
Internet
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 48
Indiainfoline brochure
FUNDAMENTAL RESEARCH SERVICES
The Sunday Weekly Report
This weekly report is the ace of all reports It offers a comprehensive market
overview and likely trends in the week ahead It also presents few top picks based on
an in-depth analysis of technical and fundamental factors It gives short term and
long term outlook on these scriprsquos their price targets and trading strategies Another
unique feature of this report is that it provides an updated view of about 70 prominent
stocks on an ongoing basis
The Industry Watch
This report provides an in-depth analysis of specific industries which are
likely to outperform others in the economy It analyzes their strengths and
weaknesses and ascertains their future outlook The final view is arrived at after
thorough interaction with industry experts Also comparative performances of
various companies in the sector are evaluated and top picks are recommended
Stock Analysis
Indiainfoline stock research has performed very well over the past few years
and the Indiainfoline Model Portfolio has consistently outperformed the benchmark
indices The fundamentals of select scrips are thoroughly analyzed and an actionable
advice is provided along with investment rationale for each scrip
Flash News
Key developments and significant news announcements that are likely to have
an impact on markets scrips are flashed live on trading terminals Flash news keeps
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 49
the market participants updated on an online basis and helps them to reshuffle on their
holdings
TECHNICAL RESEARCH SERVICE
Nifty Tracker
Nifty Futures is the most traded instrument with highest volumes in F amp O and
excellent liquidity The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years The objective is to generate positive returns for traders who are looking for a
high risk high reward product
Online Chart
An online forum to help clients specifically day traders in judging the
directions of the market and stocks which are in the limelight
Intraday Calls
For day traders indiainfoline provides intra-day calls with entry exit and stop
loss levels during market hours These calls are flashed on their terminals Their
analysts continuously track the calls and provide recommendations according to the
market movements
Position Calls
Indiainfoline ldquoPosition Trading Callsrdquo are based on thorough analysis of the
price movement in select scriprsquos These calls are for a 10-15 day time span with stop
loss and target levels These calls are flashed on their terminals during market hours
Derivative Strategies
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools Suitable ldquoDerivative Strategiesrdquo are devised
which are flashed on their terminals and published in their reports
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 50
Futures Calls
A customized product for HNIs to help them trade with leveraged position
wherein clients are advised on the stocks with entry exit and stop loss level for short
term benefits Over and above this financial status of the calls is monitored at all
times
OTHER ADVATAGES
Advancements in Internet and Internet-based trading have transformed the way firms
operate in the broking industry We recognize that technology is an important tool for
broking operations
We believe that online trading will gain market share due to significant advantages that it
offers
It enables the customer to trade directly without any agent intervention
It offers customers the convenience of trading from almost anywhere
It enables rapid dissemination of information and at reduced costs
It offers a responsive mechanism for reporting grievances problems and bugs
The IndiaInfoline Group have invested in technology and ensured that we have an
optimum infrastructure to handle the load Our current technology infrastructure comprises
several high ends Dell HP IBM servers running on Microsoft Operating System Most of
these servers support online customers for trading activities and users for the
wwwindiainfolinecom and www5paisacom websites
The IndiaInfoline Grouprsquos main trading servers (application and database servers) are
located at our Goregaon office and our broadcast servers are hosted at VSNL and Reliance
Internet Service Providers (ISP) Our website is hosted with Net Magic Solutions another
ISP All the three ISPs and our Goregaon office are equipped with latest servers and
uninterruptible power supply systems The Goregaon office is connected to the internet by
optic fiber to Net Magic Solutions which gives us bandwidth of more than 10Mbps
expandable to 20Mbps Our connectivity between the internal and external servers is through
this fiber connection
Net Magic Solutions sources bandwidth from VSNL and Bharti thereby providing us
with redundancy in the event of a failure of one of the providerrsquos gateway By co-locating
some servers with Reliance Infocom we have further increased our redundancy
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 51
The IndiaInfoline Group has implemented CISCO Pix firewall managed by Net Magic
All our servers routers and desktops are behind this firewall All connections to our trading
servers happen in a secure manner using 128 bit encryption We have a security certification
from Thawte
The key components of our technology infrastructure include
- Online trading software
- Surveillance and risk management
- Client administration
- Back office software
- Communication links and VSAT network
- Networking and hardware
- Security
SWOT Analysis
Strengths
bull Integrated technology platform
bull ldquoOne Stoprdquo shop
bull Pan - India distribution network
bull ldquoIndia Infolinecomrdquo and ldquo5paisacomrdquo have developed into brands
Weaknesses
bull Lack of a banking arm to complete the bank-broker-depository chain
bull Insignificant presence in institutional Segment
Opportunities
bull Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
bull Rapid penetration of Internet and computers means that technology enabled financial
services will gain market share
Threats
bull Economic slowdown
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 52
bull Volatile movement in indices events like May 17 2004
bull Stock markets falls will have a cascading effect on our mutual fund mobilization
bull Increasedecrease in interest rate can affect our debt income fund mobilizations
bull Future changes in personal taxation rules can impact insurance sales
bull Increasing competition from large and particularly foreign players
PORTERrsquoS FIVE FORCE MODEL
Competitive Force - Michael Porter has identified five forces that determine the intrinsic
long-run profit attractiveness of a market or market segment
Industry competitors
Potential entrants
Substitutes
Buyers
Suppliers
Intensity of Competition
Move towards consolidation
Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations
Increased Focus of Banks in Retail Broking Various foreign banks like ABN Amro and others are planning to enter the Indian retail
brokerage industry
Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumerrsquos growing preference for
internet as compared to approaching the brokers
Threat of New Entrants Entry of Foreign Players
New forms of trading including T+2 settlement system dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industryThreat of Substitutes
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 53
Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and post offices
etc act as substitutes to retail broking products and services
Buyer Power Lack of Expertise Curtails Bargaining Power
Retail investors often lacks the knowledge and expertise in the financial sector that calls them
to approach the broking houses
Low Product Differentiation Proves Beneficial
The retail broking services provided by the various companies are homogeneous with very
low product differentiation This allows customers to enjoy a greater bargaining power
Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising number of
IPOrsquos coming to the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 54
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 55
Financial Performance
Year 2007-08 List Revenue Profit before
interest
depreciation and
tax
Profit after tax
Indiainfoline Ltd 67244 27725 12869
India Infoline
Investment
Services Ltd
15221 12089 3155
Moneyline Credit
Ltd
1132 194 207
India Infoline
Distribution
Company Ltd
184 713 560
India Infoline
Marketing
Services Ltd
4050 1297 753
India Infoline
Insurance
Services Ltd
6881 42 417
India Infoline
Commodities Ltd
1701 147 83
India Infoline
Media and
Research Services
Ltd
8238 981 630
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 56
Other subsidiaries
969 624 512
Inter-company
adjustments
3261 1692 425
Aggregate
102359 40222 16393
This is the tabel represents the Revenue profit before interest depreciation and
tax in each and every segement of IndiaInfoline and profit after tax in each and
every segment If we see this table we will find that the total revenu for 2008-09
was 102359 and 40222 is his profit before interest depreciation and tax which
is
40222 100 =393
102359
And if we calculate the profit on total revenue it will be
16393 100 =1601
102359
And if we calculate the total Interest depreciation and tax they will be
40222-16393=23829
Rs Mn
Lists 2007-08 2007-06
Gross Income 67244 28672
Profit before interest depreciation and
taxation
27725 9834
Interest and financial charges
2116 639
Depreciation
1944 1233
Profit before tax
23665 7962
Taxation - Current
7934 2607
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 57
- Deferred
203 24
- Fringe benefit tax
109 119
- Short or excess provision of income-tax
53 00
Net profit for the year
15772 5212
Less Extraordinary items (Net of tax)
2904 00
Less Appropriations
Dividend
Interim dividend
00 1496
Proposed final dividend
3426 00
Dividend distribution tax
582 210
Transfer to general reserves
1310 530
Add Balance brought forward from
previous year
4741 835
Add Other adjustments (profits of India
Infoline Securities Private Limited added
pursuant to merger)
00
930
Balance to be carried forward
12291 4741
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 58
Profit amp Loss account of India Infoline
------------------- in Rs Cr -------------------
2009 2008
INCOME
Sales Turnover 54227 61611
Excise Duty 000 000
Net Sales 54227 61611
Other Income 2934 2729
Stock Adjustments 000 000
Total Income 57161 64361
EXPENDITURE
Raw Materials 000 000
Power amp fuel Cost 000 000
Employee Cost 13691 12879
Other Manufacturing Expenses 9332 10593
Selling amp Admin Expense 11216 11913
Miscellaneous Expense 4103 3967
Preoperative Exp Capitalists 000 000
Total Expenses 38342 39342
OPERATING PROFIT 15885 22259
PBDIT 18819 24988
Interest 1115 2282
PBDT 17704 22704
Depreciation 2556 1944
Other Written Off 000 000
Profit Before Tax 15148 20762
Extra Ordinary Items 223 -053
PBT(post extra-ord items) 15371 20709
Tax 4788 7839
Reported Net Profit 10583 15773
Total value Addition 38342 39353
Preferred Dividend 000 000
Equity Dividend 7945 3436
Corporate Dividend Tax 1350 582
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 59
Per Share Data
Share in Issue(in Lakhs) 283400 57103
Earning Par Share(Rs) 373 2762
Equity Dividend () 14000 6000
Book Value(Rs) 3658 17335
This is the Profit and loss account for the years 2007-08 and 2008-09 In which we can see
that the turnover sale and other profits have decreased from the 2007-08 to 2008-09 which is
an impact of recession
The total income is also decreased from 64361 to 57161 in 09 which is around 1119 of
the previous year or 72 cr
In the expenditure part of 2008-09 as compare to previous yes it has also decrease from 393
to 383 which is around 3 In this the total is decreased instead of increase in employee cost
and Miscellaneous Expense to gain the better profit
Operating profit was decrease from 222 to 158 approximate 2882 from the year 2007-08
to 2008-09
Report net profit is decreased from 15773 to 10583
Share in issued has increase from 57103 to 283400
Earning per share has come down from 2762 to 373 which is 90
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 60
Balance Sheet in Cr
2009 2008
Sources of funds
Share capital 5668 5710
Reserve amp surplus 98013 93275
Equity share warrants 1137 5977
Net worth 104818 104062
Loan funds
Secured loan 170 -
Unsecured loan 0010 13056
Total Liability 104998 118019
Application funds
Fixed asset(including intangibles)
Gross block 14367 9831
Less accumulated depreciation and
amortization
4494 3507
Net block 9873 6372
Capital work in
progress
451 0049
10324 6373
Investment 87371 91568
Currents asset loan
and advance
Sundry debtors 10352 34281
Cash amp bank balance 26410 06162
Stock on hand 16672 15406
Loan amp advance 24441 31389
77875 87238
Less current liabilities amp
provision
Current liabilities 55268 51485
Provisions 14864 15674
Total 70131 67159
Net current assets 7743 20079
Total of Assets 104998 118019
This is the Balance sheet of IndiaInfoline showing the comparison for the period of 2007-08
and 2008-09
In this we can see that the total has come down from 1180 to 1049 in 2008-09 period Which
is all the impact of recession not only on this broking firm on all others too the same impact
was their in this period their is a cost cutting and reduction on other expenses
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 61
The biggest of this can be seen on the liability side on unsecured loans which has come down
from 13057 to 0010 which is more then 99 organization has increased his cash from
6162 to 26410 for the period of 2008-09 as compare to 2007-08
COMPETITORS (ACCORDING TO VOLUME)
LAST
PRICE
MARKET
CAP(Rscr)
SALES
TURNOVER
NET
PROFIT
TOTAL
ASSET
INDIABULLS 13520 418809 200309 99451 1472236
INDIA INFOLINE 14130 400444 57157 10359 104999
EDELWEISS CAP 47000 352520 19139 2639 186528
MOTILAL OSWAL F 17080 244358 5726 4531 43349
HSBC INVEST 26400 184368 2431 -1521 66745
FUTURECAPITAL 23050 146432 13244 931 121675
NETWORK 18 9020 86507 9450 -1941 86211
GEOIIT BNP 3780 84703 14056 1439 27606
DELTA CORP 4330 72381 4273 831 35687
NALWASONS INV 121000 62148 1478 1126 27090
This table represent the comparision between the indiainfoline and other share broking firms
or inverstment organisation which includes last price of share market capital sales turnover
net profit and total assets
This graph shows thr last share price of the organisation in this we can see that Nalwasons
investment has the highest share price as compare to others it is very high The indiainfoline
stand very short in this
0
200
400
600
800
1000
1200
1400
Last Price
Series 1
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 62
When it comes to market capital the Indiabulls has the highest market capital and second is
Indiainfoline just behind of Indiabulls and rest other are no ware in this graph
When we talk about sales turnover of the broking firm or investment organisation again the
indiabulls has the hight sales turnover as compare to other its very high other stand no ware
infront of him but still indiainfoline manages second position
0500
10001500200025003000350040004500
Market capital
Market capital
0
500
1000
1500
2000
2500
SALES TURNOVER
SALES TURNOVER
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 63
The profit is the main aim of each and every organsation In other factore indiabulls is ahead
of all and indiainfoline but here indiainfoline beats all others including indiabulls
Indiainfolinersquos profit is just ahead of indiabulls
There are two vacent place which indicates no profit but it is not like that here it means loss
both HSBC and NETWORK 18 has suffered a loss of 1521 and 1941 respectively
From this table the coloum of indiabulls has been removes just me make this take appropriate
and attractive because the total assets of Indiabulls is more then 14700 (NOT SHOWN IN
GRAPH) where as the total of all others is 6996 only
But finally we can conclude that the Indiainfoline has manage to get the highest net profit
among all his competitors
0
20
40
60
80
100
120
NET PROFIT
NET PROFIT
0200400600800
100012001400160018002000
TOTAL ASSETS
TOTAL ASSETS
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 64
PERFORMANCE HIGHLIGHT IN 2008-09
Business Division Business Highlights
Broking
Market share of equities increase from
34 in 2007-08 to 376 in 2008-09
Customer base for retail equities
increased 358 from 44 ml in 2007-
08 to 06 ml in 2008-09
Published in-depth and thematic
reports on INCH politics rural India
infrastructure self commodities
utilities and India worming
Insurance
Receive Insurance Broking License
Forged alliances with major insurance
companies for the distribution of life
and nonlife products
Alter the product mix in favor of
traditional products like Endowment
Products
Credit and Finance
Proactively suspended personal loans
and mortgages business from
September 2008 while the personal
loan business is still suspended the
mortgages business has been Re-
Started
Revenue at Rs26541 ml in 2008-09
against Rs19375 ml in 2007-08
Registered the Housing Finance
Subsidiary with NHB
Wealth and asset Management Introduce the family office platform
Raised around Rs18 bl in the largest
single day debenture listing of its
kind
Received in principle approval for
sitting up of Mutual Funds
Establish the infrastructure and
knowledge capital for Office Store
Asset Management Services
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 65
Highlights 2008-09 Industry optimism Wealth management
bull Mobilised Rs 18 bn in the largest single-day debenture listing of its kind
bull Built relationships with many reputed families across India and the globe
Asset management
bull Received the in-principle approval from SEBI to sponsor a Mutual fund
bull IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to
carry out corporate advisory and dealing in securities The Singapore arm can now offer
broking asset management and investment banking services
bull IIFL Inc received an FII license thereby facilitating the investment of dedicated funds in
India
bull Setup a team of experienced professionals for the offshoreasset management business
Key Takeaways from India Infoline concall
India Infoline was the Global coordinator and BRLM for the QIP of Emami Limited
and the Co-BRLM to the QIP of Cipla Ltd Also they were the Syndicate members to
Adani Power IPO in July 2009
The first premium mobilization from insurance broking business stood at Rs 410
million
The net NPA on the books continue to remain less than 1
Its core business improved significantly
Its market share remains same at 36
Average daily equities volumes stood at Rs 3336 billion as compared to Rs 3225
billion in the previous quarter
The companys customer base improved to 33
Its financial income grew by 487
Its employee cost was of Rs 736 million
Administrator cost grew by 28 at Rs 507 million QoQ
Depreciation coat stood at Rs 1315 million
Interest coat was of Rs 155 million
Its advertisement cost was of Rs 24 million
Its cash and cash equivalent stood at Rs 93 billion and debt was at Rs 300 millions
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 66
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 67
FINDINGS
Brokerage of India infoline is higher than Others broking firms like ReligareMotilal
OswalIndiabullsthey are charging 0 03 for Intraday and 0 30 for Delivery
where India Infoline is taking 0 05 for Intraday and 0 50 for Delivery
Margin money of India infoline is higher than other firm like IndiabullsGeojitMotilal
Oswalthere is no restriction of margin moneyeBut in India Infolinethe minimum
margin money should be 50002555 rs
Exposure is less than other firms India Infoline offers eight times exposure on margin
where as Religare and Indiabulls offer twenty times exposure on margin money
HDFC ICICI direct provide their customerrsquos three types of account (de-mat ac
trading ac bank ac) but India infoline provide only De-mat ac and Trading ac
Religare takes Rs299 for lifetime services where as India infoline takes Rs555
Relationship manager changes many times it creates problem for the offline customers
Securities are not so much reliable
India Infoline has hidden charges Customer are not much aware about that
Customer satisfaction of India infoline not so good
Most of the customers are trading offline
Most of the customers approach towards the broking firm is through the relationship
manager
Most of the people are not much aware of share market and its benefit
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 68
Recommendation To increase awareness about Share Market and the name India Infoline itself the
company should organize campaign The campaign can be weakly monthly yearly it
will give a good result to the company to capture market in the competitive position
The company should reduce the margin money It can help to acquire more
customers if the firms bring plans for no boundation of margin money
The Company should increase their focus on the less margin money customers also It
can help to make more customers of low margin money which can increase the
revenue of the firm The Relationship managers focus only to the high margin money
customer because from them they will get high brokerage that should not be happened
from the less margin money customer
Transaction error should be avoided Transaction should be done properly taking in
consideration that it is one of the most required quality of a firm Wrong transaction
or default transaction may lead the prestige of the company to be down
Brokerage rate should be reduced ReligareMotilal OswalIndiabulls are charging as
0 03 for Intraday and 0 30 for Delivery where as India Infoline is charging 0
05 for Intraday and 0 50 for DeliveryThough it is negotiable but for high margin
money customer not for less margin money customer
The Company should increase Exposure It is the good tool to capture the market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 69
CONCLUSION
I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market I
was also able to know about the business environment and business ethics of the business
world I also came to know about what does a firm or an organization require or wants from a
employee or a trainee From the survey I found that India infoline is in the top three position
in the share market
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline
ACHARYA INSTITUTE OF MANAGEMENT AND SCIENCES 70
BIBLIOGRAPHY
Websites-
wwwindiainfolinecom
www5paisacom
wwwnsecom
wwwmoneycontrolcom
Book source-
Financial management
- Khan amp Jain
Principal of financial management
-Prassana Chandra
Business Environment
- Francis Cherunilam
Annual report of indiainfoline