A PROJECT REPORT ON “PORTFOLIO MANAGEMNET SERVICES” FOR “SHAREKHAN LIMITED.” BY “MOIZ CHAIWALA” UNDER THE GUIDANCE OF “DR. VAISHAMPAYAN” SUBMITTED TO “UNIVERSITY OF PUNE” IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION (MBA) THROUGH VISHWAKARMA INSTITUTE OF MANAGEMENT PUNE-48. 1
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A
PROJECT REPORT
ON
“PORTFOLIO MANAGEMNET SERVICES”
FOR
“SHAREKHAN LIMITED.”
BY
“MOIZ CHAIWALA”
UNDER THE GUIDANCE OF
“DR. VAISHAMPAYAN”
SUBMITTED TO
“UNIVERSITY OF PUNE”IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD
OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION (MBA)
THROUGHVISHWAKARMA INSTITUTE OF MANAGEMENT
PUNE-48.
1
ACKNOWLEDGMENT
Doing a project study involves a great deal of encouragement, innovative ideas and
support from different people. After all, success is the epitome of hard work,
perseverance, steadfast determination and most of all encouraging guidance. This
summer project at SHAREKHAN LTD. was a knowledge gathering experience and
opened a vast frontier of practical aspect of theoretical knowledge.
A successful project can never be prepared by the singular effort of the person to
whom project is assigned but, it also demands help and guardianship of some
acquainted person who are involved actively or passively in the completion of a
successful project.
I would like to express my sincere thanks to my Director, Prof. Sharad L Joshi for
giving me the opportunity to be a part of an esteemed institution and without whose
support this project would not have been possible.
I take this opportunity to express my heartiest thanks to Mr. AMIT CHAVAN,
Assistant Manager, SHAREKHAN LTD, my project guide, for his invaluable
guidance, active involvement and assistance at all stages, despite his busy schedule
that made it possible to complete this summer project.
The project couldn’t have been complete without timely and vital help of my faculty
guide Dr. VAISHAMPAYAN would like to thank him for the entire support &
guidance which he provided me throughout this project. He has been a source of
inspiration through his constant guidance, personal interest, encouragement and help.
I convey my sincere thanks to him. In spite of his busy schedule he always found time
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to guide me through the project. I am also grateful to him for reposing confidence in
my abilities and giving me the freedom to work on my project.
I express my sincere gratitude to all employees at SHAREKHAN LTD. for providing
me useful assistance and resources required for the successful completion of this
project.
And in the end I would like to thank my parents, my brother and my friends for their
motivational support.
I as a student of VISHWAKARMA INSTITUTE OF MANAGEMENT, Pune-48,
would like to take this opportunity to thank all those who had made this project a
tremendous learning experience for me.
MOIZ CHAIWALA.
3
Sr.
NoTITLE PAGE No.
1 Executive Summary 5
2 Company Profile 7
3 Objective of the Study 19
4 Portfolio Management Services 24
5 Methodology of the Study 62
6 Data Analysis 66
7 Finding’s 70
8 Suggestions 72
9 Limitations 74
10 Conclusions 77
11 Bibliography 80
12 Annexure 82
INDEX
4
CHAPTER 1:
EXECUTIVE SUMMARY
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Executive summary
The project at SHAREKHAN LTD. i.e. “Portfolio Management Services” helps the
individual investors in constructing a portfolio from the funds they want to put in the
various securities or financial instruments that are available in the market.
It emphasizes on what is a “Portfolio Management Service”. Then I
mentioned the need or the objective for the investors to have their portfolio. The
objective of portfolio is to diversify risk, using the investment tools and gain
maximum returns on the constructed portfolio. Along with these features I have
mentioned about the various services & product offered in PMS along with its
objective and advantages.
It emphasizes on the entire methodology of my study the parameters kept in the
mind while designing of the report, various sources of data collection, portfolio
management & under it the types of portfolio and various activities of portfolio
management, concept of risk management.
It includes the various investment instruments which are included in the portfolio,
along with example of actual designed portfolio.
It consists of my learning’s from the project and few suggestions for the
organization which I feel will be useful for them in improving their services even
further and at last but not the least this phase of the project talks about the final
CRUX of the report under the name of conclusion, it talks all about the findings
and my beautiful experience with “SHAREKHAN LIMITED”.
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CHAPTER 2:
COMPANY PROFILE
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Company Profile
Sharekhan Limited is a retail financial services provider with a focus on Equities,
Derivatives and Commodities, Brokerage execution on the National Stock Exchange
of India Ltd. (NSE), Bombay Stock Exchange Ltd. (BSE), National Commodity and
Derivatives Exchange India (NCDEX) and Multi-Commodity Exchange of India Ltd.
(MCX). Sharekhan provides trade execution services through multiple channels - an
Internet platform, Telephone and Retail Outlets and is present in 225 cities through a
network of 615 locations. The company was awarded the 2005 Most Preferred
Stock Broking Brand by Awwaz Consumer Vote.
SHAREKHAN covers the entire spectrum of financial services such as Stock broking,
Depository Participants, Distribution of financial products like Mutual Funds, Bonds,
Fixed Deposit, Merchant Banking and Corporate Finance, Insurance Broking,
Commodities Broking, Personal Finance Advisory Services, Placement of Equity,
IPO’s, among others.
Sharekhan is one kind of mediator between clients that are investors and Exchange
board. Without mediator nobody can directly purchased shares from the exchange.
Sharekhan is one of the leading stock broking companies in India. Sharekhan is the
retail broking arm of SSKI, an organization with more than 84 years of trust and
credibility in the stock market. But before 7 years the business was changed from
being a discount brokerage house to complete investment solutions provider.
Sharekhan was officially launched in February 2000 as a brand Sharekhan. With
branches and outlets across the country, their ground network is one of the biggest in
India!
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History of Sharekhan
A member of the Bombay Stock Exchange for the last 3 generations and serving
investors since 1922, SSKI is a member of the National Stock Exchange, the Inter-
connected stock exchange and a depository participant registered with both NSDL &
CDSL. SSKI made its foray into institutional broking and corporate finance 19 years
ago. Mr. Shripal Morakhia, chairman of the SSKI group turned into a professional
outfit and established the group as the pioneer of the investment research in the Indian
market. The SSKI group of companies is distributed in to four such divisions and they
are as follows:-
SSKI Investors Services Ltd.(Sharekhan)
S.S. Kantilal Ishwarlal Securities Pvt. Ltd.
SSKI Corporate Finance.
I dream Productions.
Sharekhan falls under the umbrella of S.S. Kantilal Ishwarlal Securities Pvt. Ltd
(SSKI). Thus becoming the leading domestic player in Indian institutional business.
Sharekhan has more than $1 billion of private equity deals.
SSKI has been voted as Top Domestic Brokerage House in the research category as
well as derivatives, depository services, commodities trading on the MCX & NCDEX
and most importantly, investment advice tempered by eighty years of broking
experience. Sharekhan is known for its research and it big share of its profit on
research.
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NAME DESIGNATION
1) Mr. Shripal Morakhia CHAIRMAN
2) Mr. Tarun Shah Chief Executive Officer
3) Mr. Abhay Havaldar Managing Director
4) Mr. Pathik Gandotra Head Of Research
5) Mr. Rishi Kohli Vice President Of Equity Derivatives
6) Mr. Nikhil Vora Vice President Of Research
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VARIOUS ACTIVITIES UNDERTAKEN BY
SHAREKHAN STOCK BROKING LTD
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DEMAT SERVICE
Dematerialization and trading in the demat mode is the safer and faster alternative to
the physical existence of securities. Demat as a parallel solution offers freedom from
delays, thefts, forgeries, settlement risks and paper work. This system works through
depository participants (DPs) who offer demat services and the securities are held in
the electronic form for the investor directly by the Depository.
Sharekhan Depository Services offers dematerialization services to individual and
corporate investors. They have a team of professionals and the latest technological
expertise dedicated exclusively to our demat department, apart from a national
network of franchisee, making their services quick, convenient and efficient.
At Sharekhan, their commitment is to provide a complete demat solution which is
simple, safe and secure
DAIL AND TRADE
Trade in Equity by using your phone!
Free with Sharekhan Classic Account, the Dial-n-Trade service enables customers to
place orders for buying and selling shares through your telephone.
FEATURES:
Simple and Secure Interactive Voice Response based system for
authentication.
No waiting time. Enter your T-PIN to be transferred to our telebrokers.
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You also get the trusted, professional advice of our telebrokers
STOCK BROKING
SHAREKHAN offers trading on a vast platform; National Stock Exchange, Bombay
Stock Exchange. More importantly, they make safe to the maximum possible extent,
by accounting for several risk factors and planning accordingly. They assisted in this
task by their in-depth research, constant feedback and sound advisory facilities. Their
highly skilled research team, comprising of technical analysts as well as fundamental
specialists, secure result oriented information on market trends, market analysis and
market predictions. This crucial information is given as a constant feed back to the
customers, through daily reports delivered along with their updated portfolio. Besides
this they are also offered special portfolio analysis packages that provide daily
technical advice on scrip’s for successful portfolio management and provide
customize advisory services to help customer make the right financial moves that are
specifically suited to their portfolio.
Factors such as their success in the electronics custody business has helped build on
our trading of trust even more. Consequentially their retail client base expanded very
fast. To empower the investor further they have made serious efforts to ensure that
their research calls are disseminated systematically to all their stock broking clients
through various delivery channels like e-mail, chat, SMS, phone calls etc.
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Advisory Services
Under their reail brand SHAREKHAN LIMITED’ they deliver advisory services to a
cross-section of customers. The service is backed by a team of dedicated and expert
professionals with varied experience and background in handling investment
portfolios. They are continually engaged in designing the right investment portfolio
for each customer according to individual needs and budget considerations with a
comprehensive support system that focuses on trading customers portfolios providing
valuable inputs, monitoring and managing the potfolio through varied technological
intiatives. Those is made possible by the expertise they have gained in the business
over the years.
COMMODITIES
At SHAREKHAN Commodities, they are focused on taking commodities trading to
new dimensions of reliability and profitability. They have made commodities trading,
an essentially age-old practice, into a sophisticated and scientific investment option.
Company enables trade in all goods and products of agriculture and mineral origin
that include lucrative commodities like gold and silver and popular items like oil,
pulses and cotton through a well-systematized trading platform. The technological
and infrastructural strengths and especially the street smart skills make them an ideal
broker. Their service matrix is holistic with a gamut of advantages, the first and
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foremost being their legacy of human resources, technology and infrastructure that
comes from being part of the SHAREKHAN Group.
Their wide national network, spanning the length and breadth of India, further
supports these advantages. Regular trading workshops and seminars are conducted to
hone trading strategies to perfection. Every move made is a calculated one, based on
reliable research that is converted into valuable information through daily, weekly and
monthly newsletters.
KEY BENEFITS OF COMMODITIES AT SHAREKHAN
Complete online support.
Cutting edge analysis of the most relevant news in commodities.
An excellent information facility through SMS messages provides you with
appropriate market information as well as buy/sell calls.
A team of dedicated Relationship Managers/Dealers provide you non-stop
support through messenger. You will be assisted on market information,
buy/sell recommendation and other information to guide you through.
SHARESHOPS
SHAREKHAN HAVE 900 SHARE SHOPS IN 280 CITIES IN INDIA.
A Sharekhan outlet offers the following services:
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Online BSE and NSE executions (through BOLT & NEAT terminals).
Free access to investment advice from Sharekhan's Research team.
Sharekhan Value Line (a monthly publication with reviews of
recommendations, stocks to watch out for etc).
Daily research reports and market review (High Noon & Eagle Eye).
Pre-market Report (Morning Cuppa).
Daily trading calls based on Technical Analysis.
Cool trading products (Daring Derivatives and Market Strategy).
Personalized Advice.
Live Market Information.
Depository Services: Demat & Remat Transactions.
Derivatives Trading (Futures and Options).
Commodities Trading.
IPO’s & Mutual Funds Distribution.
Internet-based Online Trading: SpeedTrade.
MUTUAL FUNDS
Sharekhan is glad to announce that customers will now be able to invest in Mutual
Funds through sharekhan. They have started this service for online mutual funds, and
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in the near future will be expanding our scope to include a whole lot more. Applying
for a mutual fund through them is open to everybody, regardless of whether you are a
Sharekhan customer or not. For investing in mutual funds through share khan you
have to just download the form from internet, fill it and submit it in any sharekhan
office.
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AN OVERVIEW OF SHAREKHAN BUSINESS
Stock Broking Distribution Depository
(1) Mutual Funds
(2) IPO’s – Equity, Bonds
(3)Debt products
(1)Participant with both NSDL and CDSL(2) 640,000+ accounts(3) Amongst the top DPs in the country
SHAREKHAN LIMITEDSHAREKHAN LIMITED
India’s No.1 integrated financial services group
COMMODITIES
Member of both the commodities exchange
(1) NSE and BSE membership
(2) Equity, Derivatives and Debt market operations
(3) 900 SHOPS
(4) 220,000+ accounts
(5) Around 4.5% market share (NSE Cash)
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CORNERSTONES OF STRAREGY
1) Focus on retail segment.
2) Build a strong Pan-India network managed by experienced professionals, build
presence across both metros and Class A/B town.
3) Build full-service capabilities leveraging the network-offer the entire gamut of
financial services, backed by strong transaction processing and high volume
handling capability.
4) Established a high degree of customer ownership and top-of-mind recall in the
local markets- ensures steady customer traffic and repeat business.
5) Build a trusted brand; ensure high visibility
Competetors of sharekhan
Indiabulls
Karvy consultant
ICICI Direct
Religare
HDFC
Relience money
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IL&FS Investsmart.
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CHAPTER 3:
OBJECTIVE OF THE STUDY
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OBJECTIVE OF THE STUDY
My project on “Portfolio Management Services” is meant to study the nature of
different investment instruments available in the market and then finally suggest the
same to the clients in the form of a structured product. I do this by suggesting the
investor as to go for which all investments that can fetch out real good returns to them
in future, as per their risk appetite regarding the investments and their needs. I suggest
them the investments that they can opt for and the one’s which can bring a huge value
addition to their portfolio. Few objectives are given below:
Guide a client to determine the level of investment risk they are willing to take
and then suggest them an appropriate asset allocation.
To study and compare various investment instruments available in the market.
To advise High Net-worth Individuals (HNI’s) on different investment avenues
like mutual funds, insurance, real estate, stock broking etc.
To know the investment pattern of the individuals & hence creating a better
portfolio of investment for these individual clients.
To advise them on tax planning, so as to minimize their tax liability.
To provide the client with an appropriate asset allocation mix based on certain
factors time horizon and risk tolerance.
Understanding consumer behavior towards various investment options
available.
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INVESTORS DESK
Today an investor is interested in tracking the value of his investments, whether to
invest directly in the market or through some funds which play in the market. This
dynamic change has taken place because of a number of reasons. With globalization
and the growing competition in the investments opportunity available, investor would
have to make guided and have to make rational decisions on whether they get an
acceptable return on the current investments, or if there is needs to switch to another
investments plan.
It is of paramount importance to keep in mind the risk involved in any investment.
Before making any investment plans for any client, firstly we need to know his/her
risk taking ability. “Investments that have the greatest return potential tend to
give the greatest risk potential.”
On the other side of the coin, investments with conservative return are the least risky.
So for successful and stress free investment, a balance between the financial objective
and the ability to tolerate risk is the best. This overall balance can be obtained by
diversifying money across low, medium and high-risk investments so that both short
term and long term goals are met.
Q: What is Investment?
The money earn is partly spent and the rest saved for meeting future expenses.
Instead of keeping the savings idle person may like to use savings in order to get
return on it in the future. This is called Investment.
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Q: Why should one invest?
One needs to invest:
To earn return on idle resources.
To generate a specified sum of money for a specific goal in life
To make a provision for an uncertain future.
One of the important reasons why one needs to invest wisely is to meet the cost of
Inflation. Inflation is the rate at which the cost of living increases. The cost of
living is simply what it costs to buy the goods and services you need to live.
Inflation causes money to lose value because it will not buy the same amount of a
good or a service in the future as it does now or did in the past. For example, if
there was a 6% inflation rate for the next 20 years, the aim of investments should
be to provide a return above the inflation rate to ensure that the investment does
not decrease in value.
Q: When to start Investing?
The sooner one starts investing the better. By investing early investor allow his
investments more time to grow, whereby the concept of compounding increases
income, by accumulating the principal and the interest or dividend earned on it,
year after year. The three golden rules for all investors are:
To Invest early,
To Invest regularly,
To Invest for long term and not short term.
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Q: What are various options available for investment?
One may invest in:
Physical assets like Real Estate, Gold/ Jewellery, Commodities etc.
and/or
Financial assets such as Fixed Deposits with Banks, Small Saving
Instruments with Post Offices, Insurance/Provident/Pension Fund, Mutual
Fund etc. or Securities market related instruments like Shares, Bonds, and
Debentures etc.
VALUE ADDITION TO THE ORGANIZATION
Through this project I can bring in long term clients for my organization by
offering “Portfolio Management Services” to them.
Through this project I am not only bringing long term clients for my
organization but also creating a word of mouth publicity of my organization
by offering the best services to the clients so that a chain of more consumers is
created through these services.
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CHAPTER 4:
PORTFOLIO MANAGEMENT SERVICES:
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PORTFOLIO MANAGEMENT SERVICES
Portfolio management services involve activities that help the investors to arrive at
desired investment goals. A portfolio management service is the process of organizing
and managing businesses or the establishment for the purpose of obtaining maximum
profit. Portfolio management services ensure optimum use of people, money and
other resources. In short, it is the art of optimizing assets and raising the worth of a
portfolio. The major component of the decision process is portfolio management.
After securities have been evaluated an appropriate portfolio should be selected. It
involves managing group of assets (i.e. portfolio) as a unit. The basis of financial
planning process is an asset allocation strategy. Asset allocation is the distribution of
assets among different asset classes, such as stocks, bonds, and cash equivalent
instruments.
The relationship between risk and return is one of the essential concepts to
understand when investing and it is unique for every investor, the personal risk
tolerance could be influenced by current world events, investments experiences- even
your inherited views on saving and investing.
ADVANTAGES OF PORTFOLIO MANGEMENT SERVICES
(1) Individually managed accounts: Provides a flexible format for optimizing
returns through effective fund management.
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(2) Customized portfolios: Tailor-made investment strategies to suit individual
requirements.
(3) Individually managed accounts: Provides a flexible format for optimizing
returns through better information support/client servicing regular investments
disclosures make the investor feel comfortable and in control of his money.
(4) Supportive tax structure: Tax changes support rise in equity, there is a cut in
capital gains tax on listed equities:
i. NIL for holdings greater than 12 months
ii. 10%(from 30%) for holdings less than 12 months
(5) SEBI regulated: A regulated industry makes the investor feel comfortable with
the investments techniques adapted to optimize returns.