MOTILAL OSWAL SECURITIES LTD. M.P. BIRLA INSTITUTE OF MANAGEMENT Page 1 AN INTERNSHIP REPORT ON ORGANISATION STUDY & STUDY ON “t+1 settlement cycle” AT MOTILAL OSWAL SECURITIES A Report submitted to MPBIM Bangalore in partial fulfillment of the requirement for the award of MASTER OF BUSINESS ADMINISTRATION (MBA) BANGALORE UNIVERSITY By PRIYADARSHINI .R O6XQCM6033 Under the Guidance and Supervision Of B.Srinivasan Mr. Shivanna T. R. Professor Branch Manager MPBIM Motilal Oswal Securities Shantinagar, Bangalore
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MOTILAL OSWAL SECURITIES LTD.
M.P. BIRLA INSTITUTE OF MANAGEMENT Page 1
AN INTERNSHIP REPORT
ON ORGANISATION STUDY
& STUDY ON “t+1 settlement cycle”
AT MOTILAL OSWAL SECURITIES
A Report submitted to MPBIM Bangalore in partial fulfillment of the requirement for the award of
MASTER OF BUSINESS ADMINISTRATION (MBA) BANGALORE UNIVERSITY
By
PRIYADARSHINI .R O6XQCM6033
Under the Guidance and Supervision
Of
B.Srinivasan Mr. Shivanna T. R. Professor Branch Manager MPBIM Motilal Oswal Securities Shantinagar, Bangalore
MOTILAL OSWAL SECURITIES LTD.
M.P. BIRLA INSTITUTE OF MANAGEMENT Page 2
DECLARATION
I hereby declare that this report titled, “AN INTERNSHIP REPORT ON
ORGANIZATIONAL STUDY AT MOTILAL OSWAL SECURITIES”
is a record of independent work carried out by me, towards the partial
fulfillment of Master of Business Administration (MBA) program of
Bangalore University at M. P. Birla Institute of Management. This is my
original work and has not been submitted for the award of any other degree,
diploma, fellowship or other similar title or prizes.
Place: Bangalore PRIYADARSHINI.R
Date: 06XQCM6063
MOTILAL OSWAL SECURITIES LTD.
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PRINCIPAL’S CERTIFICATE This is to certify that the internship report titled, “AN INTERNSHIP
REPORT ON ORGANIZATIONAL STUDY AT MOTILAL OSWAL
SECURITIES” has been prepared by Ms. PRIYADARSHINI.R, bearing
registration number 06XQCM6063, under the guidance of Prof.
SRINIVASAN, M P Birla Institute Of Management, Associate Bhartiya
Vidya Bhavan, Bangalore.
Place: Bangalore Principal
Date: Dr. N.S.Mallavalli
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GUIDE’S CERTIFICATE
This is to certify that the internship Report entitled, “AN INTERNSHIP
REPORT ON ORGANIZATIONAL STUDY AT MOTILAL OSWAL
SECURITIES” done by Ms. PRIYADARSHINI.R bearing Registration
No.06XQCM6063 is a bonafide work done under my guidance in a partial
fulfillment of the requirement for the award of MBA degree by Bangalore
University. To the best of my knowledge this report has not formed the basis
services, commodities trading, IPO and mutual fund investment advisory
services.
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Our Value PMS Scheme gave a 402.74% return since inception (Feb 2003)
(Sensex is 270.69% & Nifty is 245.11%). The performance of Value
Hedging since inception (Oct 2005) is 32.76%.
Such an outstanding performance can be only attributed to our single-indeed
focus on research-based value investing. Motilal Oswal Securities invests
almost 5-10% of its revenue on equity research and hires and trains the best
resources to become advisors to its valued clients.
Our unique Wealth Creation Study, authored by Mr. Raamdeo Agrawal,
Managing Director, is now in its eleventh year. Investors keenly await this
annual study for the wealth of information it has on how companies created
wealth during the preceding five years.
The organization finds its strength in its team of young, talented and
confident individuals. Qualified professionals carry out different functions
under the able leadership of its promoters, Mr. Motilal Oswal and Mr.
Raamdeo Agrawal. Stringent employee selection process, focus on
continuous training and adoption of best management practices drive the
quest to achieving there Vision.
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Motilal Oswal Securities Ltd (MOSt) History:
The story of MOSt goes back many years, when Mr. Motilal Oswal and Mr.
Raamdeo Agrawal met each other as students in a Mumbai suburban
hostel in the early eighties. Both the young chartered accountants hailing
from a rural & an unpretentious background had a common dream viz'to
build a professional organization with strong value systems, to provide
reliable & honest investment advice to investors'. Thus was born their first
enterprise called "Prudential Portfolio Services" in 1987.
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People behind the organization:
Mr. Motilal Oswal
Chairman and Managing Director
Mr. Motilal Oswal is the promoter of Motilal Oswal Securities Ltd. He is a
member of Institute of Chartered Accountants of India and started the
business along with the co-promoter Mr. Raamdeo Agarwal in 1987.
“Service is required in everything, in research, in execution and in
settlement. It is going to be the key to survival. If you give good service and
value to your clients, it will translate into good business”
He has received the Rashtriya Samman Patra awarded by the Government
of India for being amongst the top 50 income tax payers in the country. He
was elected as a Director of BSE and joined its governing board in 1998. He
is currently a member of various committees of CDSIL and SEBI. He is
currently a member of the NSE committee for F&O and a member of the
Managing Committee of Indian Merchant Chambers.
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Mr. Raamdeo Agrawal
JMD MOSt & portfolio
Profile of Raamdeo Agrawal
Date of Birth: 5th April 1957 Educational Qualification: Chartered Accountant Achievements: - Co-Author of the book "CORPORATE NUMBERS GAME" in 1986 Joint Managing Director of Motilal Oswal Securities Ltd Author of annual "Wealth Creation Study * "
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MOFS Shareholding pattern:
1st Qtr: Promoters & Promoter group [78.67%]
2nd Qtr: Directors and employees [11.85%]
3rd Qtr: New Vernon Private Equity Limited [7.20%]
4th Qtr: Bessemer Venture Partners Trust [2.27%]
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Top ten shareholders as on the date of filing of the Draft Red Herring Prospectus with SEBI:
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MOSt Management
Name Designation Qualification
Mr. Motilal Oswal Chairman and
Managing Director
B. Com, CA
Mr. Raamedeo
Agrawal
Joint Managing
Director
B. Com, CA
Mr. Navin Agarwal Director B.Com CA, CS, ICWA, CFA
Mr. Hitungshu
Debnath
Director - Retail
Business
Post Graduation in Marketing Management
Mr. Ashutosh
Maheshvari
CEO - MOIA B.tech.(IIT-k),MBA
Mr. Vishal Tulsyan CEO - MOVC B. Com, CA
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Milestones:
2007
Mr. Motilal Oswal - Chairman and Managing Director has been
appointed as a member of the Managing Committee of Indian Merchant
Chambers.
Motilal Oswal Financial Services Ltd files for an IPO
Motilal Oswal Financial Services Ltd. features as a case study in Harvard
Business School
Motilal Oswal Financial Services Ltd ties up with Punjab National Bank
to offer online trading to its customers
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2006
Places 9.29% with two leading private equity investors – New Vernon
Private Equity Limited and Bessemer Venture Partners
Issues 14% of companies equity to employees as ESOPs
Acquires a leading south Indian brokerage firm – Peninsula Capital
Markets
Enters Private Equity and plans entry into Investment Banking
businesses
Value PMS gives 390% returns to its investors between Feb 2003 and
March 2006
Re launches its e-Broking service through a nationwide campaign.
First advice-based online trading proposition in the Indian markets
Another milestone in distribution - 1017 outlets, 375 cities, serving
1.61 lakh clients
Has a 1400 member team working to achieve the company's vision.
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2005:
Asia money Brokers Poll 2005 rates Motilal Oswal Securities - Best
Local Brokerage, Most Independent Research House, Best in Sales
and Service
Launches two new Portfolio Management Schemes - Value
Hedging for derivatives and Discover Value for the Rs5 lakh to Rs50
lakh category
Acquires local brokerage Gayatri Capitals from Andhra Pradesh and
Varghese from Bangalore
Deepest distribution in the stock broking segment with 700 outlets in
320 cities and 1.2 lakh clients
2004:
Presence expanded to 270 outlets in 150 cities and 20 states
Value PMS delivers a whopping 160% post tax returns for the period
ended April 2004
Bulls Eye PMS - A momentum based PMS launched
Start of the Solid Research Solid Advice campaign
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2003:
MOSt Portfolio Management Services launched with Mr. Raamdeo
Agrawal as the Portfolio Manager. Uniquely structured performance
related fees.
Inquire team is successful in capturing the uptrend in Banking, Auto
and Infrastructure sectors.
15,000 Depository clients acquired.
9 own branches setup at 7 cities to provide Equity Advisory Services.
More in the pipeline.
150 outlets in 110 cities across 18 states & one Union Territory in
India manned by 1000 people servicing over 15,000 Retail and
Institutional Investors.
2002:
Mr. Navin Agarwal, Head of Equity Research & Institutional sales, is
inducted in the Board of Directors
MOSt consolidates its retail operations & upgrades its IT / Back
Office infrastructure to cater to its growing network of branches,
Franchisees and Channel Partners.
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Retail network completes coverage of 100 cities in India. Direct
servicing of HNI clients is initiated.10,000 Depository clients
acquired.
2001:
Legendary marketing guru Shunu Sin’s services taken to revitalise
retail marketing strategy and branding efforts.
Starts offering Derivatives products and advisory services on both
BSE as well as NSE
2000:
Both Mr. Motilal Oswal and Mr. Raamdeo Agrawal receive Rashtriya
Samman Patra from Central Board of Direct Taxes for being amongst
the top 50 tax payers in India from FY94-FY98
Acquires its 100th Franchisee / Channel Partner and emerges as a
leading player in the Indian Broking Sector
Becomes a Depository Participant of Central Depository Services
Limited (CDSIL)
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1999:
Mr. Raamdeo Agrawal starts attending legendary billionaire investor
Warren Buffett’s Annual General Meetings of Berkshire Hathway Inc.
He still continues to attend it every year.
The Wealth Creation Study started in 1996 culminates into Wealth
Creation Seminar and Awards function in 1998.
First Stock Broking house to brand its services as a research and advice
based broker.
“Wealth Creation” Campaign started.
www.MotilalOswal.com launched. First broking house in India to go on
the web.
Becomes a Depository Participant of National Securities Depository
Limited (NSDL).
Inducts Mr. Ivan Mathias, former country head of Watson Wyatt
Worldwide, on its Board to Directors to shape HR initiatives.
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1998:
Mr. Motilal Oswal joins the Governing Board of The Stock
Exchange, Mumbai.
1996:
Wealth Creation Study started. First of its kind study initiated to
identify biggest and fastest wealth creating companies in Indian Stock
markets.
1995:
Motilal Oswal gets incorporated as Motilal Oswal Securities Ltd.
1994:
MOSt acquires NSE Membership and plans for major expansion of its
retail network.
Inquire (Indian Equity Research) is formally created at a 2500 sq. ft
office in South Mumbai with bigger and better quality infrastructure
than the corporate office. Since then nearly 20% of revenue is
allocated to research. First Domestic Stock broking house to have
such a strong Research focus
.Motilal Oswal. enters Institutional Broking business
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1990:
After just three years in the business, “Motilal Oswal” is formed
through acquisition of membership on The Bombay Stock Exchange
(BSE). Three more memberships taken in later years.
1987:
Mr. Motilal Oswal and Mr. Raamdeo Agrawal lay the foundation of a
great partnership by starting a sub-broking firm. The venture stands
out from the rest due to their approach of Research-based broking
even when sub-brokers.
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LOCATION MATRIX
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MOST VISION
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Our Core Purpose:
To be a well respected and preferred global financial services organization
enabling wealth creation for all our customers.
Values: Integrity: A company honoring commitment with highest ethical and
business practices.
Team Work: Attaining goals collectively and collaboratively.
Meritocracy: Performance gets differentiated, recognized and rewarded in
an apolitical environment.
Passion & Attitude: High energy and self motivated with a “Do It” attitude
and entrepreneurial spirit.
Excellence in Execution: Time bound results within the framework of the
company’s value system
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Quintessential Investment Philosophy of MOSt
Emphasis on return on net worth
A focused approach to investing
Patience is an invaluable virtue
Pick high quality companies
Invest for the long term
Investing is the art of controlling emotions
Find good companies that are currently out of favour
Companies that generate sustainable cash flow are safer
If you make a mistake, admit it and get out
Look for sufficient 'margin of safety
Consistent portfolio returns over time lead to substantial wealth
creation
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Management Team
MOSt management team is regularly engaged in finding ways to improve
operational efficiencies and customer satisfaction. You will find CAs, CFAs,
ICWAs, CSs, MBAs and IT professionals managing crucial functions, to
bring you best products and services - from research & advice to trade
execution & settlement. At MOSt we practice meritocracy and each of the
team members is provided extensive training.
Training & Manpower Development
MOSt conducts various training and development programs regularly to
enhance the capabilities of its team. As much as 5% of the salary bill is spent
on such programs, which is amongst the highest for a broking organization
in India. MOSt is truly a learning organization with lead being taken by the
Directors, who regularly participate in top management learning programs
like Strategic Management Program at Indian School of Business,
Hyderabad, Strategy Summits with Management Gurus like Tom Peters and
Dr. Lester Thurow, Dean, Sloan School of Management, (MIT) and Brand
Management Seminar by Al Ries etc
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MOSt Wealth Creation Study and Awards function
MOSt Wealth Creation Study and Awards function has become a key event
in the Indian Capital Market. The Wealth Creation Study, initiated, in 1996
is widely appreciated in the investment community and the Indian Corporate
Sector. This annual study identifies the fastest and the biggest wealth
creators in the Indian markets over the last 5 years and felicitates them at a
public event, attended by several leading investors and equity specialists.
The 10th Wealth Creation Awards function was held at the Grand Hyatt,
Mumbai on Dec, 2005.
Foundation Day
Arising from its deep respect for Knowledge & Value Addition, MOSt
celebrates its Foundation Day in a truly unique manner. Not only are the top
performing team members and Business Partners rewarded for their
contributions, but they are also provided training on important subjects like
Customer Profiling, Selling, Investment Advising etc. Lot of learning takes
place through sharing of successful practices by MOSt Business Partners.
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Wealth Creation Seminars
MOSt conducts Wealth Creation Seminars across the country regularly to
educate individual investors about there research products, derivatives
market, investment strategies and latest opportunities in the stock markets.
There senior executives, research analysts and investment strategists address
the audience and personally interact with the investors.
End to End Equity Solutions
MOSt provides end-to-end equity solutions to all categories of its valued
clients by using a combination of its numerous products and services. It
offers world-class research-based investment and trading ideas coupled with
efficient and reliable trade execution & settlement. Its "default free" record
since inception is a unique and exceptional feature in the Indian Stock
Markets.
MOSt values client trust and is committed to upholding it at all costs. They
believe that no automated system can be a substitute for the human touch.
MOSt combines its Research, IT strengths, ethical business practices and
"Customer First Attitude " to provide end-to-end equity solutions.
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MOSt Business segments
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MOFSL Customer & reach Retail Business
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MOSt Research Based Advisory
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PRODUCTS:
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Services:
Depository Services
In the times of T+2 having a demat account linked to your trading account
becomes really convenient. The non-trading members also can avail of our
Depository services. You receive regular account reports and an efficient
service at all times. MOSt is a member of both NSDL and CDSL and the
service is available at all our outlets in India.
Depository Service Provided By MODES
Account Opening
Dematerialization
Rematerialization
Account Transfer
Transmission
Nomination
Pledging and Hypothecation
Account Closures
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Derivatives
Derivatives (Futures & Options) are ideal instruments to protect your
portfolio against risk. You can trade with index movements, hedge and
leverage your portfolio by limiting risk but keeping your upside unlimited.
Equity Research
Equity Research is an inherent strength of MOSt. MOSt believes in picking
investment opportunities where the underlying value is higher than the
market price. A feather in the cap, Asiamoney Brokers Poll 2005 has ranked
us the best Indian brokerage firm.
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MOSt EAG:
In keeping with its tradition of personalized service, Motilal Oswal
Securities Limited set up MOSt EAG to provide customized and integrated
equity solutions to High Networth Investors.
Equity Research is an inherent strength of MOSt. We believe in picking
investment opportunities where the underlying value is higher than the
market price.
Most EAG team has highly trained equity professionals, who act as your
Relationship Managers (RMs). Most RMs proactively helps you take
informed equity investment decisions and build a healthy portfolio.
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Client Profiling
MOSt RMs determines each EAG client's profile before deciding the ideal
asset allocation. Profiling takes into consideration issues like your attitude
towards risk, investment horizon, life stage, return expectation and
investment objectives
Investments & Trading:
MOSt RMs are experts in providing value based investment solutions as
well as advising you in positional trading, as per your profile.
Portfolio Tracking Software:
Client’s portfolio is continuously monitored using Portfolio Tracking
Software.
Integrated Approach:
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They use integrated approach in there investment strategy using a
combination of cash, derivatives and other leverage products to help client
reach there investment goal.
Benefits
MOSt EAG team has highly trained equity professionals, who act as client’s
Relationship Managers (RMs). MOSt RMs proactively help there client take
informed equity investment decisions and build a healthy portfolio. The
RMs keep a close watch on the performance of each stock in client’s
portfolio and suggest changes as and when there is a significant trend
reversal or deterioration in a company's performance. This is to help client
reach there investment goal. The RM doesn't stop at just that, he goes a step
further to ensure that client’s trades are settled and stocks credited in there
Demat account in a timely manner. This allows MOSt to give client’s a
convenient single window service and client’s RM becomes the single point
contact for all equities related matters.
Clients will receive regular portfolio valuation reports to enable them to
monitor performance and view the progress towards the investment
objective.
Clients can avail of there services from all there branches in Mumbai,
and Industrial. You can add NSE-Cash, Derivative & BSE script on
the same market watch
Get access to various online reports like margin report, Demat A/c
details, trades executed, turnover report, net position report with mark
to market profit/loss and realized profit
Online transfer of funds through HDFC Bank
Access to latest research reports, daily market dairy, pivot points,
derivative dairy
View top 20 shares by value or volume traded, along with top gainers
/ losers
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PORTFOLIO MANAGEMENT SERVICE
MOSt PMS Motilal Oswal Securities runs two types of PMS schemes meant for
investors with different investment preferences. While our Value PMS
scheme is meant for investors with long-term interest in the market, there
Bull's Eye PMS scheme is meant for investors who want to take moderate
risk and generate healthy returns from the equity market from time to time.
Its clients, investor community and some of the most prestigious
publications like Asia money and Institutional Investors amongst others
acknowledge Motilal Oswal Securities as one of the leading research based
equity broking house in India. With about 15% of our revenue invested in
our research capability, we have some of the sharpest resources that produce
excellent research insights on companies. The same is then passed to our
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highly rated portfolio management and investment advisory team that works
on its personalized investment strategy.
FOR WHOM
Portfolio Management Service (PMS) is meant for investor with long-term
time horizon. Low portfolio churn and capital preservation will be key to
success. Our investment decision will cushion in high .margin of safety. So
that it leaves sufficient room for investor to be invested and nurture his
portfolio.
PMS is a product wherein a customised investment portfolio is created to
suit the investment objectives of a client. In PMS, the responsibility of
creating and tracking the portfolio is handled by the portfolio manager. Idea
generation, order execution, settlement and performance reporting is all
assumed by the PMS provider. This service is particularly advisable for
investors who cannot afford to give time or don’t have those expertises for
day-to-day management of their equity portfolio. They would prefer Mr.
Raamdeo Agarwal, Portfolio Manager, to manage the same. The client
derives the benefit of the professional expertise and experience of Mr.
Raamdeo Agarwal.
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Bull’s Eye PMS
Bull's Eye strategy to better returns . . .
Here is the investment strategy MOSt employ to generate desired returns
through there Bull's Eye PMS scheme. They believe Investing = Hunting.
It’s about identifying the right stocks, picking and exiting at the right times
and then continuing the cycle.
Identifying the right stocks: There strong, proven Fundamental
Analysis skill allows them to understand the profile and the
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performance of various companies. This allows them to pick the
wheat from the chaff.*
Determining Entry and Exit Points: After identifying the companies
for investment, they resort to technical analysis, read the market
condition and pick up the stocks in opportune sectors. They believe
that apart from the right entry levels, selling at the right time is
equally important. Therefore, they employ similar strategy while
exiting the stock. And this completes there hunt for good returns.
Moderate risk is the key philosophy: they take moderate risk while
making any investment. Duration of the investment is one to six
months. So even while a stock may look fundamentally strong, the
age of there investment in it may depend on the reality based on
technical research along with the prevailing market conditions.
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Value Hedging PMS
Value Hedging PMS is a promising scheme that may be a unique and
pioneering effort in its segment. Not only will there clients benefit from
there exceptional stock-picking ability, but also capitalise on short-term
price volatility.
Through this scheme they offer that delicate balance between long-term
returns and short-term gains.
The Value Hedging PMS is primarily a hedging based discretionary PMS
product. They will do the following to bring best results:
They will pick stocks based on there value investing philosophy
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Various derivatives strategies will be used to hedge portfolio based on
prevailing market conditions. For example, in a bearish market they
can hedge position by writing the calls and collecting premiums and at
the same time they can buy the puts to avoid the fall in asset value vis-
a-vis market fall.
Needless to say, most of the stocks they pick will have to be on the
derivatives list. With an increasing list, almost every important stock will be
a part of the derivatives segment. The Value Hedging PMS might also invest
in some non-F&O stocks in case the investment rationale is very compelling.
Value Hedging PMS is managed by Mr. Jigar Shah. Mr. Shah has a proven
track record of more than 5 years advising top High Networth Clients on
their equity investments.
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MUTUAL FUNDS
Emergence of Mutual Funds
Markets are increasingly becoming more sophisticated and
complex
investors need a financial intermediary who provides the
required knowledge and professional expertise on successful
investing
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Incremental flow of funds into mutual funds rather than
traditional avenues
Started in India since 1964.
MOSt Mutual
To enable clients diversify their investments Motilal Oswal Securities
Limited has added another product in its bouquet and will now offer mutual
funds.
MOSt mutual team is in close contact with various fund houses and
interactive sessions are held with fund managers. They provide client with
regular updates on products and new schemes. Being one of the stock
brokers they keep a close watch on the markets. Based on client risk
appetite, investment horizon and there existing investments team will
suggest investment in mutual fund schemes, which are best, suited to client.
The fund and scheme selection is done after an in-depth research on
parameters like risk adjusted returns, rolling returns, volatility and portfolio
churn. Team advises a mature and long-term view on mutual fund
investments. MOSt Mutual doesn't stop at just that, they go a step further to
ensure that client get the right NAV, there dividends are credited on time
and there account statements are regularly received.
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COMMODITIES
Commodities are a integral part of our life.
They form a part of the:
Food we eat (Pulses, Food grains, Oil & Oil seeds)
Clothes we wear (Cotton, Silk)
Precious Metals (Gold & Silver)
Investors looking for a fast-paced dynamic market with excellent liquidity
can trade in Commodity Futures Market. The Commodity Exchange is a
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Public Market forum and anyone can play in these vital Commodity
Markets. Motilal Oswal Commodities Broker (P) Ltd can provide an entry to
the Commodity Markets. MOCB is a registered trading-cum-clearing
member of NCDEX. MOCB offers advice on investments, strategy &
provide research with trading advice.
Chapter: 2 Organizational Structure
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The basic organizational structure is as follows:
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The branch has divisions in-
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- Marketing,
- Advisory &
-Support & Function.
Each of these fields has separate hierarchy followed. The split takes place
right after Regional Manager.
The internship was undertaken at Shanthinagar Branch of MOSt. The
following was the organizational structure at this branch:
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Chapter: 3 Operational Aspects of
Different Functional
Department
Functional Departments
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MARKETING
In this department where the demat account as well as Mutual Funds is
marketed, marketing executives are seeks for prospective customers, they
helps in opening of an account and also these executives collects AMCs and
provide other services.
ACCOUNTS
Maintaining the purchases of stores department
Internal auditing
Payments and receipts
HR & ADMINISTRATION
PAY ROLL MAINTAINANCE: maintenance of employee details like
salary incentives, bonus, and performance records etc
RECRUITMENT DEPARTMENT: this department helps in assessing the
needs of Labor force and recruiting the needs of Labor and giving the
orientation programme to new employees.
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HRD:
Maintain good relation ship with the employees
Identifying the demotivated employees and providing the necessary
motivation
Accepting problems of the workers and helps in solving them,,
SUPPORT & FUNCTION
FRONT OFFICE
In front office the following services are done.
· Account opening
· Holding enquiries
· Transfer of physical shares to demat form
· Transfer of demat shares to physical form
· Transformations of shares from demat to trading account etc...
BACK OFFICE
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· Maintenance of all demat account
· Giving intimation related to the due of AMC’s to their account holders
· Sends quarterly information to the holders related to the holdings
ADVISORY SERVICES
This is the main function done by the department, MOSt gives every
financial advisory service to investors e.g.: portfolio management, equity
tips, tax planning etc.
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Chapter: 4 Performance Evaluation
SWOT ANALYSIS:
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Strength
Large and diverse distribution network
MOSt financial products and services are distributed through a pan-India
network. The business has grown from a single location to a nationwide
network spread across 1,160 Business Locations operated by them and their
Business Associates in 363 cities and towns.
Strong research and sales teams
28 equity research analysts covering 208 companies in 25 sectors and 5
analysts covering 18 commodities.
In 2006, Asia money rated a member of their sales team as the best sales
person for Indian equities.
Experienced top management
Both of Promoters, Mr. Motilal Oswal and Mr. Raamdeo Agrawal, are
qualified chartered accountants with over two decades of experience each in
the financial services industry. In addition, our top management team
comprises qualified and experienced professionals with a successful track
record
Well-established brand
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Motilal Oswal is a well-established brand among retail and institutional
investors in India. They believe that their brand is associated with high
quality research and advice as well as our corporate values, like integrity
and excellence in execution.
Wide range of financial products and services
Healthy Financial Market
Excellent Infrastructure
1 of the top 5 broker in the country
MOFSL’ presence in the field of finance for a long time.
Weakness The main concern with the brokerage business is cyclicality. Trading volumes drop sharply during a downturn. When the Indian stockmarket enters the bear phase, Motilal Oswal will be affected.
Leading firms are better placed to weather a downturn and may even be able to accelerate industry consolidation by rolling up smaller firms that have been affected to a much larger extent.
Dependency on third parties exposes us to losses caused by financial or other problems experienced by them.
MOFSL operate on leased premises.
MOFSL have entered into a number of related party transactions.
Opportunities
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Good Customer Base
Rising consumer incomes will translate into disproportionately higher
allocation of these funds into equities.
Right now, under 3% of India's retail assets are invested in stock
markets. Cash, bank deposits, real estate and gold dominate the pie-
chart on how Indians invest their wealth. As economies develop, there
is all possibility that this % rises.
Further, the stock broking industry is highly fragmented and seeing a
gradual consolidation. Motilal Oswal's growth has outpaced that of the
industry and the company should continue to gain from this
consolidation in stock markets.
Growing IPO issues
Can make use of sustained growth in retail segment of financial
Product.
Economic growth in India
Rising of FDI
Growing consumer awareness about equity related product.
Threats
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Existing Competitors
Market Uncertainty
Political instability or changes in the government could delay the
liberalisation of the Indian economy and adversely affect economic
conditions in India generally, which could impact our financial results
and prospects.
Broad economic factors like inflation etc.
We have reputational risks in respect of our distribution of third party
products Downturns or disruptions in the securities markets could reduce
transaction volumes, and could cause a decline in the business and
impact profitability.
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Chapter: 5 Problem Areas
FINDINGS:
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Motilal Oswal Financial Services (MOFSL), a financial services company
focused on wealth creation for all its customers such as institutional and
corporate clients, HNI and retail customers, proposes to enter capital
markets with an initial public offering (IPO) of 29, 82,710 equity shares of
Rs 5 each for cash at a price band between Rs 725 and Rs 825 per share with
100% book building process.
The company is going to raise Rs 216.25 crore in lower end of the price
band and Rs 246 crore at higher band, as per its DRHP filed with Sebi.
The issue comprises a net issue to the public of 2,840,400 equity shares of
Rs 5 each and a reservation of 142,310 equity shares of Rs 5 each for
subscription by eligible employees at the issue price. The issue will
constitute 10.50% and the net issue will constitute 10.00% of the post issue
paid-up equity capital of the company.
The equity shares are proposed to be listed on the BSE and NSE. Citigroup
Global Markets India Pvt Ltd is the book running lead manager and In time
Spectrum Registry is the registrar to the issue.
MOFSL is the holding company of Motilal Oswal Securities Limited