12-10-2012, 11:21 AM
A PROJECT REPORT ON FINANCIAL ANALYSIS ON RELIANCE CAPITAL LTD
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ABSTRACT
This project has been a great learning experience for me; at the same time it gave me enough scope to implement my analytical ability. The project is a detailed knowledge about how reliance capital operate in its various business like reliance mutual fund reliance money, reliance general insurance, reliance life insurance, reliance consumer finance.The corporate governance , stockholder ,company dividend policy and the investors attached to company what is the company market status and how the company stocks fluctuates in the market, how the company manage its working capital .
CORPORATE GOVERNANCE ANALYSIS
• How does this firm interact with financial markets? How do markets get information on the firm?
Ans. The reliance capital is one of the top three financial service provider in the country .the firm has many business operation in india as insuranceAsset management, Mutualfunds, Life and general insurance Private equity and proprietary investments, Stockbroking, Reliance PMS,Depository services and financial products, Consumer finance and other activities in financial services, the firm has very wide operation in the market and the firm interact with its regular financial updates means what will be the company growth expectation and how far it reached now and have to go in upcoming years the company is operating through S&P CNX Nifty and MSCI India and all the information regarding the company is available on the company official address
Stockholder Analysis
Q.Who is the average investor in this stock? (Individual or pension fund, taxable or tax-exempt, small or large, domestic or foreign)
Ans. The number of investor folios in RMF stood at 74.8 lakh at the end of March 31,2010 as against 75.6 lakh investor folios at the end of March 31, 2009, serviced across246 locations in India, despite changing regulatory environment in the Indian mutual fundindustry.
• The number of Systematic Investment Plan Investors in RMF is 10.9 Lakh.
• As on March 31, 2010, RMF had a total of 36 schemes- 17 equity-oriented schemes, 17 debt-oriented schemes and 2 exchange-traded schemes.
• During the year, RMF launched a new product feature -'Reliance Smart Step'. Itwas the first fund house to launch a unique facility to invest across all debt/ liquid& equity schemes based on a scientific model.
• In the month of May 2009, RMF launched a new fund - Reliance Infrastructure Fundof the fund collected around Rs. 2,300 crore (US $ 509.5 million) from over 4,20,000investors, which is twice the aggregate amount collected by all Equity NFOs in the Indian mutual fund industry in the preceding 12 months.
In terms of amount mobilized ranks 8th amongst the top 10 Equity NFOs in the industry in past 5 years - In fact 5 of the top 10 Equity NFOs are RMF NFOs.
• During the year, RMF won several prestigious awards. The Highly acclaimed international award - 'Asia Risk Award for Asset Manager of theYear 2009', for its robust risk management practices. RCAM is the only Indian assetmanagement company to be awarded this prestigious award.The Lipper award for "Best Equity India Fund" to Reliance Growth Fund inthe "5 years" category and "Best Fund" to Reliance Regular SavingsFund -Balanced Plan, in the "3 years" category. 'CRISIL Fund House Level 1' rating from CRISIL for its robust processes and corporategovernance practices. "mutual Fund House of the Year" by CNBC TV18 - CRISIL Awards 2009. The Reliance Smart Step Scheme was nominated as the "Most Innovative Fund/Feature of the year" at CNBC TV18- CRISIL Awards 2009.The Morning Star Award in the India Moderate Allocation category to Reliance RegularSavings -Balanced Growth.
Market risk
The Company has significant quoted investments which are exposed to fluctuations instock prices. These investments represent a substantial portion of the Company's businessand are vulnerable to fluctuations in the stock markets. Any decline in the price of theCompany's quoted investments may severely affect its financial position and results ofoperations. Even though RCL is exposed to the systematic risk or beta, it has a welldiversified portfolio of stock to mitigate stock specific risk.
Competition risk
The financial sector industry is becoming increasingly competitive and the Company'sgrowth will depend on its ability to compete effectively. The Company's main competitorsare Indian nonbanking financial companies, life and non-life insurance companies, both inthe public and private sector, mutual funds, depository participants and other financialservices providers. Foreign banks also operate in India through non-banking financecompanies. Further liberalization of the Indian financial sector could lead to a greaterpresence or entry of new foreign banks and financial services companies offering a widerrange of products and services. This could significantly toughen our competitiveenvironment. The Company's competitors may have greater resources than it does and, insome cases, may be able to raise debt in a more cost-efficient manner. The Company'sgrowth will depend on its ability to compete effectively in this context. The Company'sstrong brand image, wide distribution network, diversified product offering and depth ofmanagement places it in a strong position to deal with competition effectively.
Credit risk
Credit risk is a risk arising out of default or failure on the part of borrowers inmeeting their financial obligations towards repayment of loans. Thus credit risk is a lossas a result of non-recovery of funds lent both on principal and interest counts. This riskis comprehensively addressed both at the strategic level and at the client level.Extensive and strict norms have been stipulated in identification of the borrower andevaluation of credit proposals. All critical underwriting activities are automatedExtensive product programme guidelines have been developed to suit various productrequirements