28-04-2014, 11:00 AM
summer training project report on COMPARISON BETWEEN RELIANCE MONEY’S PRODUCT WITH OTHER FINANCIAL INSTITUTION
COMPARATIVE ANALYSIS.pdf (Size: 356.21 KB / Downloads: 30)
EXECUTIVE SUMMARY
The Indian capital markets have seen a lot of economic swing since last decade but still it has been flourishing with rapid transformations. Reforms are continuing and are bringing a lot of change in structure, process and governance of capital market. This is helping Indian capital market to gain an image of mature marketplace in the capital markets of the world. The working mechanism are now more flexible and transparent. The stock exchanges has been corporatized too. Other than this new instruments like index future, index options, derivatives etc. has been introduced. Out of the major players showing their presence in the financial markets, Reliance Money is the one. Reliance Money is promoted by Reliance Capital; one of India's leading and fastest growing private sector financial services companies ranking among the top 3 private sector financial services and banking companies, in terms of net worth. During past few years, it has picked up a considerable market share in the sector of financial services. It is a one-stop-shop, providing end-to-end financial solutions (including mobile and web-based services). It has the largest non-banking distribution channel with over 10,000 outlets and 20,000 touch points spread across 5,165 cities/towns; catering to the diverse needs of over 3 million existing customers. During the internship, a research has been carried out on the on the topic “A study of investor behaviour at Reliance Money”. The objectives of the research were to create awareness about various products and services of the Reliance Money and to know about the investor behaviour and their preferences towards investment decisions and considerations. Other than this, the research included the study of position of Reliance Money in the market and its comparative position with other players.
INTRODUCTION
An essential first step towards the successful investing is establishing realistic financial goals. Equally important is the understanding the investments best suited to helping one achieve this financial goal. Many Indians invest to meet long term goals like buying houses, education of children, ensuring a secure retirement etc. but many also have immediate goals to accomplish like making a down payment for a home loan.
OBJECTIVE
The present study has been undertaken with the object of examining, analyzing and inferring the effect of capital market on mutual fund, which addresses the following issues:
To understand the effect of recent changes in stock market on the mutual funds.
To understand basic concepts of mutual funds
To analyze the NAVs of various mutual funds during the last few months.
To analyze the average returns of various mutual funds during the last few months.
RESEARCH METHODOLOGY
The study of capital market and its effect on mutual funds and RELIANCE MONEY is an arduous task in itself. The keyword in handling such kind of problems is – research. Gathering information from all the possible sources, whether by different articles, press releases, company circulars or by direct interaction with the clients or face to face interviews with the head of the department.
This project work is mainly based on Primary and Secondary data in which primary data was collected and secondary data was available to us from the confidential office records of the department, various magazines and newspapers published by concerned authorities. The data was also collected from secondary sources; mainly from various internet sites related to capital market and mutual funds and Key Information Memorandum of various fund houses.
INDUSTRY PROFILE
General introduction about financial sector
The financial sector is in a process of rapid transformation. Reforms are continuing as part of the overall structural reforms aimed at improving the productivity and efficiency of the economy. The role of an integrated financial infrastructure is to stimulate and sustain economic growth. The US$ 28 billion Indian financial sector has grown at around 15 per cent and has displayed stability for the last several years, even when other markets in the Asian region were facing a crisis. This stability was ensured through the resilience that has been built into the system over time. The financial sector has kept pace with the growing needs of corporate and other borrowers. Banks, capital market participants and insurers have developed a wide range of products and services to suit varied customer requirements. The Reserve Bank of India(RBI) has successfully introduced a regime where interest rates are more in line with market forces. Financial institutions have combated the reduction in interest rates and pressure on their margins by constantly innovating and targeting attractive consumer segments. Banks and trade financiers have also played an important role in promoting foreign trade of the country.
ORIGIN AND DEVELOPMENT OF THE INDUSTRY
The Bombay Stock Exchange (BSE) is known as the oldest exchange in Asia. It traces its history to the 1850s, when stockbrokers would gather under banyan trees in front of Mumbai’s Town Hall.The location of these meetings changed many times, as the number of brokers constantly increased. The group eventually moved to Dalal Street in 1874 and in 1875 became an official organization known as ‘The Native Share & Stock Brokers Association’. In 1956, the BSE became the first stock exchange to be recognized by the Indian Government under the Securities Contracts Regulation Act.
GROWTH AND PRESENT STATUS OF THE INDUSTRY
The ever-growing and fast-maturing 'India Market' is a lucrative business destination for developed countries. With 7-8% of GDP growth, huge analytical, young and English speaking work force the 'pull' for opportunities are luring. The bandwidth of 'India Market' is enviably wide and very deep. 'Markets in India' are well protected by legal guidelines and efficient administrators. With a liberal and proactive government at the center the road ahead for 'Markets of India' is very rosy. 'Market India' has witnessed exponential growth over past one and half decade. Foreseeing sure and substantial returns on investments (ROI) companies are pro- actively listing on the stock market indexes. Government agencies once much hated for red tape and bribes has shed its image. Professionalism is their new mantra. Public Enterprises like IOC,ONGC, BHEL, NTPC, SAIL, MTNL, BPCL, HPCL and GAIL, SBI, LIC, Hindustan Antibiotics Limited, Air India etc. to name a few, are giving Private Indian companies a good run for their money. Private giants like Reliance Industries Limited, Infosys, Tata, Birla Corporation, Jet Airways, Ranbaxy, Biocon, Bajaj Auto, ICICI are breaking their own records every financial years. Indian Equity Market at present is a lucrative field for the investors and investing in Indian stocks are profitable for not only the long and medium-term investors, but also the position traders, short-term swing traders and also very short termintra-day traders. In terms of market capitalization, there are over 2500companies in the BSE chart list with the Reliance Industries Limited at the top.
What is Depository?
Depository functions like a securities bank, where the dematerialized physical securities are traded and held in custody. This facilitates faster, risk free and low cost settlement. Depository is much like a bank and performs many activities that are similar to a bank. Following table compares the two.
What is a DP?
A depository is like a bank where securities are held in electronic(dematerialized)form. In India, there are two Depositories – National securities Depositories Limited (NSDL) and Central Depository Services Limited (CSDL).Under the Depositories Act, investors can avail of the services of the Depositories through Depository Participants (DP) such as ICICI bank. DP’s are like bank branches wherein shares in physical form need to be deposited for converting the same to electronic (Demat) form. NSDL carries out its activities through various functionaries called business partners who include Depository Participants (DPs), issuing corporate and their Registrars and Transfer Agents, Clearing corporations/Clearing Houses etc. NSDL is electronically linked to each of these business partners via a satellite link through Very Small Aperture Terminals (VSATs). The entire integrated system(including the VSAT linkups and the software at NSDL and each business partner’s end) has been named as the “NEST” [National Electronic Settlement &Transfer] system. The investor interacts with the depository through a depository participant of NSDL. A DP can be a bank, financial institution, a custodian or a broker.
Just as one opens a bank account in order to avail of the services of a bank, an investor opens a depository account with a depository participant in order to avail of depository facilities.
Insurance
Life-Insurance
Reliance Money assists its clients in choosing a customized plan which will secure the family’s future and their expenses post-retirement. Clients can choose from different plans of almost all Insurance Companies where they can invest their money. Clients can choose from products and services that channelize their savings and protect their needs while guaranteeing security and returns for life. A team of experts will suggest the best Insurance scheme which suits the client’s requirement.
General Insurance
General Insurance is all about protecting against all kind of insurable risks. Reliance Money assists you in areas of Health insurance, Travel insurance, Home insurance and Motor insurance.
Wealth Management Services from Reliance Money
Every Individual’s goal is to realize his financial dreams. Reliance Money helps do that by providing the right direction. The Reliance Money team works with the client to develop and maintain a dynamic plan for achieving their goals. Reliance Money has the professional expertise and in-depth experience needed to select the investments and manage a portfolio. Also, the company extends a universe of services that take care of the client’s Financial Requirements and focus on their immediate objectives.
OTHER ACHIEVEMENTS
• Reliance Money generated revenues of Rs. 35 billion (US$ 767 million) for the year March 31, 2009 as against Rs. 24 billion of the corresponding previous period, an increase of 48%. It also achieved a net profit of Rs. 368 million (US$ 8million) for the same period, as against a net profit of Rs. 1 million for the corresponding previous period• Reliance Money is the one of the leading brokerage and distributor of financial products in India with more than 3 million customers
Reliance Money has tied up with global partners like Reuters, Vasco, Valcambi,Webaroo, options Xpress Holdings, Goldride Securities, World Gold Council, Wincor Nixdorf and DBS Vickers to facilitate better access to wider world class choices to its customers• It is amongst the leading Mutual fund distributors of the country distributing products of 20 AMCs. It is the largest private sector partner for Western Union Money Transfer in India• To further improve its position in the money changing and money transfer business, Reliance Money has acquired a significant share holding in Wall Street Finance Ltd, a leading provider of money changing and money transfer services in the Country• Reliance Money has tied up with Kuoni India and plans to retail its for exproducts /services through the national network of over 70 Kuoni outlets• Reliance Money has tied up with India Post and World Gold Council to sell gold coins through the post office network across the country• Reliance Money has obtained Category I Merchant Banking License from the Securities and Exchange Board of India. This new license allows Reliance Money to provide a wide range of investment banking services such as Issue Management, Underwriting, Private Equity Advisory/ Syndication and Corporate Finance services in India
Equity/Growth Schemes
The aim of growth funds is to provide capital appreciation over the medium to long- term. Such schemes normally invest a major part of their corpus in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option, capital appreciation, etc. and the investors may choose an option depending on their preferences. The investors must indicate the option in the application form. The mutual funds also allow the investors to change the options at a later date. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time.
Debt/Income Schemes
The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures, Government securities and money market instruments. Such funds are less risky compared to equity schemes. These funds are not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds. The NAVs of such funds are affected because of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to increase in the short run and vice versa. However, long term investors may not bother about these fluctuations.
As students, many of us are completely ignorant of the work cultures of variouscorporate organizations. SIP is an attempt to provide us a practical corporateexposure where we work in certain corporate organizations as interns. Workingwith Reliance Money is a nice opportunity by which I can explore my knowledge
A good brand is always welcomed. Everywhere, in general, people are moreconscious with the brand. So they go for the brand and are ready to spend someextra bucks for the quality.The Brand image of Reliance Money is good in market but according to customer satisfaction reviews the company have to provide better services and proper follow upReliance Demat Account is better than other Demat account . Reliance Moneyhave good return of investment too.It also provides a sense of security with theuse of special type of keyAt last it can be on be concluded by that Reliance Money is still growing in thefinancial sector and has a huge potential for the coming times..But this project also includes prospective investors, who can invest in stockmarket but presently does not invest in these markets.